Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-01835/USCOURTS-azd-2_12-cv-01835-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Roxann Underwood, a married woman,

Plaintiff, 

v. 

Chapman Bell Road Imports, LLC, an 

Arizona limited liability company, 

Defendant. 

No. CV-12-1835-PHX-DGC

ORDER 

On August 29, 2012, Plaintiff Roxann Underwood filed a complaint against 

Defendant Chapman Bell Road Imports, LLC, alleging violations of Title VII of the Civil 

Rights Act. Doc. 1. On February 5, 2013, Defendant filed a motion to compel arbitration 

(Doc. 12), as allowed by the Federal Arbitration Act. 9 U.S.C. § 4 (“A party aggrieved 

by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement 

for arbitration may petition any United States district court . . . for an order directing that 

such arbitration proceed.”). The motion has been fully briefed and no party has requested 

oral argument. For the following reasons, the motion will be granted. 

I. Federal Arbitration Act. 

The Federal Arbitration Act (“FAA”) applies to contracts “evidencing a 

transaction involving commerce.” 9 U.S.C. § 2. This includes contracts for employment. 

Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 113–15 (2001). The FAA states that 

written agreements to arbitrate disputes “shall be valid, irrevocable, and enforceable, save 

upon such grounds as exist at law or in equity for the revocation of any contract.” 9 

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U.S.C. § 2. Absent a valid contractual defense, the FAA “leaves no place for the exercise 

of discretion by a district court, but instead mandates that district courts shall direct the 

parties to proceed to arbitration on issues as to which an arbitration agreement has been 

signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). The district 

court's role under the FAA is “limited to determining (1) whether a valid agreement to 

arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at 

issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) 

(citing 9 U.S.C. § 4). 

On February 15, 2011, Plaintiff, while working for Defendant, signed a form 

entitled “Member Acknowledgment and Agreement” (“Agreement”). Doc. 12-1 at 2. 

The Agreement provided that any legal claim relating to Plaintiff’s work for Defendant 

would be “submitted to and determined exclusively by binding arbitration under the 

Federal Arbitration Act.” Id. The Agreement to arbitrate explicitly included any claim 

arising under Title VII of the Civil Rights Act. Id. Plaintiff argues that the Agreement is 

unenforceable because it is both procedurally and substantively unconscionable. Doc. 13. 

II. Enforceability of the Agreement.

A. Procedural Unconscionability. 

Plaintiff argues that the Agreement is procedurally unconscionable under Arizona 

law. Doc. 13 at 3. Procedural unconscionability is “concerned with ‘unfair surprise,’ 

fine print clauses, mistakes or ignorance of important facts . . . that mean bargaining did 

not proceed as it should.” Maxwell v. Fid. Fin. Servs., Inc., 907 P.2d 51, 57–58 (Ariz. 

1995). The Court considers various factors affecting “the real and voluntary meeting of 

the minds of the contracting party: age, education, intelligence, business acumen and 

experience, relative bargaining power, who drafted the contract, [and] whether the terms 

were explained to the weaker party.” Id. at 57 (quoting Johnson v. Mobil Oil Corp., 415 

F. Supp. 264, 268 (E.D. Mich. 1976)). Plaintiff highlights various facts showing 

procedural unconscionability: she has a limited education and lacks business experience; 

Defendant gave her the Agreement to sign in the middle of a busy work day; Defendant 

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did not explain the Agreement; and Plaintiff did not understand the concept of arbitration 

at the time. Doc. 13 at 4. Strongly militating against Plaintiff’s arguments is the fact that 

she signed similar agreements with Defendant on two previous occasions. Doc. 14-1 at 

5, 8. In all of these agreements, the sentence by which Plaintiff gave up her right to a 

jury trial and agreed to arbitration was in bold. Id. at 2, 5, 8. Moreover, the terms of the 

Agreement are not unusual for employment contracts, and this Court has not found 

procedural unconscionability in similar situations. See, e.g., Smith v. Autonation, Inc., 

No. CV-10-987-PHX-DGC, 2011 WL 380517, at *2 (D. Ariz. Feb. 2, 2011). Therefore, 

the Court finds that there was no procedural unconscionability. 

B. Reasonable Expectations. 

Although not explicitly raised by Plaintiff, the reasonable expectations doctrine is 

more appropriate for determining the enforceability of standardized agreements. See 

Darner Motor Sales, Inc. v. Universal Underwriters Ins. Co., 682 P.2d 388, 396–97 

(Ariz. 1984). This doctrine is similar to, although distinct from, procedural 

unconscionability. See Maxwell, 907 P.2d at 57. Under this doctrine, the Agreement is 

“presumptively valid and enforceable, whether or not [Plaintiff] read it or appreciated its 

full effect, unless the reasonable-expectations limitation . . . applies.” Harrington v. 

Pulte Home Corp., 119 P.3d 1044, 1050 (Ariz. Ct. App. 2005); see Darner, 682 P.2d at 

396. Terms of an agreement “are beyond the range of reasonable expectation if one party 

to the contract ‘has reason to believe that the other party would not have accepted the 

agreement if [she] had known that the agreement contained the particular term.’” 

Harrington, 119 P.3d at 1050 (quoting Darner, 682 P.2d at 396–97). Here, the 

Agreement does not contain bizarre or oppressive terms that show Plaintiff would not 

have signed had she understood the Agreement. Doc. 12-1. Moreover, the fact that 

Plaintiff signed similar agreements with Defendant on two other occasions and those 

contracts, like the Agreement, emphasized that she was waiving her right to a jury trial 

(Doc. 14-1 at 5, 8), strongly suggest that the Agreement did not defy her reasonable 

expectations. 

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C. Substantive Unconscionability. 

Plaintiff argues that the Agreement is substantively unconscionable because it “is 

unconscionable for a large car dealership with substantial financial resources to have 

Plaintiff sign an arbitration agreement without any agreement as to how these costs are to 

be paid.” Doc. 13 at 4. Plaintiff emphasizes that she is unemployed and might be unable 

to pay for arbitration. Id. “[W]here, as here, a party seeks to invalidate an arbitration 

agreement on the ground that arbitration would be prohibitively expensive, that party 

bears the burden of showing the likelihood of incurring such costs.” Green Tree Fin. 

Corp.-Ala. v. Randolph, 531 U.S. 79, 92 (2000). Plaintiff has not shown a likelihood of 

incurring such costs, and the mere risk of such costs is insufficient to invalidate the 

Agreement. Id. at 91; see also Harrington, 119 P.3d at 1055–56. Therefore, the Court 

finds that the Agreement is not substantively unconscionable. 

D. Superseded Terms. 

Plaintiff also argues that the Agreement erroneously stated that the procedures of 

the Arizona Arbitration Act (“AAA”) would govern the arbitration. Doc. 13 at 2. In fact, 

as Plaintiff indicates, Arizona’s Revised Uniform Arbitration Act (“RUAA”) had 

superseded the AAA by the time Plaintiff signed the Agreement. See Ariz. Rev. Stat. 

§ 12-3003(A)(3) (stating that on or after January 1, 2011, the RUAA “governs an 

agreement to arbitrate whenever made”). Plaintiff does not explain how this fact makes 

the Agreement unenforceable, beyond saying that these “are important issues which may 

substantially impact Plaintiff’s claim.” Doc. 13 at 3. Of the various procedural 

differences between the RUAA and the AAA that Plaintiff cites, however, none is so 

significant or unfavorable as to unfairly surprise or prejudice Plaintiff.1

 Therefore, the 

Court finds that this provision does not render the Agreement unenforceable. 

 

1

 For example, the RUAA prescribes the procedure for initiating an arbitration, while the AAA does not; the RUAA requires an arbitrator to disclose any facts that might affect impartiality, while the AAA does not; the RUAA allows arbitrators to award 

punitive damages, while the AAA does not; and the RUAA allows an arbitrator to be 

appointed by a court of competent jurisdiction in this state, while the AAA requires that the appointment be made by an Arizona Superior Court. Doc. 13 at 2–3. 

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III. Conclusion 

Given the “liberal federal policy favoring arbitration,” Lozano v. AT & T Wireless 

Services, Inc., 504 F.3d 718, 725 (9th Cir. 2007), the Court will compel arbitration and 

dismiss the complaint. See Kam–Ko Bio-Pharm Trading Co., Ltd.-Austl. v. Mayne 

Pharma (USA), Inc., 560 F.3d 935, 940 (9th Cir. 2009) (finding that the court has 

discretion to dismiss or stay the action to allow arbitration to proceed); Simula, Inc. v. 

Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999) (affirming dismissal to allow arbitration); 

Sparling v. Hoffman Constr. Co., 864 F.2d 635, 638 (9th Cir. 1988) (same).

IT IS ORDERED: 

1. Defendant’s motion to compel arbitration (Doc. 12) is granted. 

2. Plaintiff’s complaint (Doc. 1) is dismissed. 

3. The Clerk is directed to terminate this action. 

Dated this 15th day of March, 2013. 

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