Opinion ID: 1532391
Heading Depth: 4
Heading Rank: 2

Heading: Prohibition on Class-Action Proceedings

Text: Petitioners argue that the arbitration clause, which explicitly makes unavailable to them a class-action procedure, makes the arbitration agreement unconscionable. The arbitration clause expressly provides that any dispute subject to arbitration shall not be adjudicated as a class action or consolidated class proceeding (emphasis omitted). Numerous courts, both federal and state, have rigorously enforced no-class-action provisions in arbitration agreements and found them to be valid provisions of such agreements and not unconscionable. See, e.g., Snowden v. CheckPoint Check Cashing, 290 F.3d 631, 638 (4th Cir.2002), cert. denied, 537 U.S. 1087, 123 S.Ct. 695, 154 L.Ed.2d 631 (2002) (stating [w]e [] reject Snowden's argument that the Arbitration Agreement is unenforceable as unconscionable because without the class action vehicle, she will be unable to maintain her legal representation given the small amount of her individual damages); Med Center Cars, Inc. v. Smith, 727 So.2d 9, 20 (Ala.1998) (stating that to require class-wide arbitration would alter the agreements of the parties, whose arbitration agreements do not provide for class-wide arbitration); Rains v. Foundation Health Systems Life & Health, 23 P.3d 1249, 1253 (Colo.App.2001) (stating that arbitration clauses are not unenforceable simply because they might render a class action unavailable); Edelist v. MBNA America Bank, 790 A.2d 1249, 1261 (Del.Super.Ct.2001) (finding that, because [t]he surrender of [the] class action right was clearly articulated in the arbitration amendment[,] [t]he Court finds nothing unconscionable about it and finds the bar on class actions enforceable) (alterations added); Rosen v. SCIL, LLC, 343 Ill.App.3d 1075, 278 Ill.Dec. 770, 799 N.E.2d 488, 494 (2003) (finding arbitration clause enforceable despite its prohibition on class actions); Ranieri v. Bell Atlantic Mobile, 304 A.D.2d 353, 759 N.Y.S.2d 448 (2003) (stating that given the strong public policy favoring arbitration ... and the absence of a commensurate policy favoring class actions, we are in accord with authorities holding that a contractual proscription against class actions ... is neither unconscionable nor violative of public policy) (citations omitted); AutoNation USA Corp. v. Leroy, 105 S.W.3d 190, 200 (Tex.App.2003) (enforcing arbitration clause which prohibited class-action claims, stating that there is no entitlement to proceed as a class action). Moreover, in our decision in Gilman v. Wheat, First Securities, Inc., 345 Md. 361, 692 A.2d 454 (1997), we held that a forum-selection clause, which was part of an arbitration agreement, requiring the parties to litigate their disputes in Virginia, which did not provide a class-action procedure, was not unreasonable and should be enforced. Id. at 382, 692 A.2d at 465. In reaching this conclusion, we stated that: We are unaware of any case  and none has been cited to us  in which the unavailability of a class action procedure, either generically or in a particular case, has been regarded as sufficient to render an otherwise valid forum-selection clause unenforceable. ...  It is important to recall once again that the clause in question was part of an arbitration agreement, under which Gilman agreed to arbitrate any disputes he had with Wheat arising from the account, that, under that clause, he expressly waived his right `to seek remedies in court, including the right of jury trial,' and that he had a choice of fora in which to conduct the arbitration. Id. at 381-82, 692 A.2d at 464 (emphasis added). Following our holding in Gilman, we would be averse to a holding in the present case which would allow petitioners to avail themselves of a class action contrary to the provisions of a freely-signed agreement to arbitrate that includes a no-class-action provision which was conspicuously presented as part of the arbitration clause. Petitioners do point out cases in which courts have adhered to an unquestionably minority view that finds that a no-class-action provision in an arbitration agreement can make the agreement unconscionable and unenforceable. See Ting v. AT&T, 319 F.3d 1126, 1150 (9th Cir. 2003) (affirming federal district court's conclusion that the class action ban [in an arbitration agreement] violates California's unconscionability law) (alteration added); Acorn v. Household International, Inc., 211 F.Supp.2d 1160 (N.D.Cal.2002) (finding provision of arbitration agreement that prohibited class actions substantively unconscionable); Szetela v. Discover Bank, 97 Cal.App.4th 1094, 118 Cal.Rptr.2d 862 (2002) (same). Insofar as these cases are for the proposition that a no-class-action provision in an arbitration agreement is so one-sided as to make that agreement unconscionable, we are unpersuaded. We cannot ignore the strong policy, made clear in both federal and Maryland law, that favors the enforcement of arbitration provisions. We believe that the opinions to which petitioners cite that hold otherwise give short shrift to this principle. See Metro East Center for Conditioning and Health v. Qwest Communications International, Inc., 294 F.3d 924, 927 (7th Cir. 2002) (arguments based on the costs of arbitration and the preclusion of class actions are the sort of litany the Federal Arbitration Act is supposed to silence). Therefore, we do not find the no-class-action provision to be so one-sided or oppressive to petitioners as to render the arbitration agreement at issue unconscionable.