Opinion ID: 2174415
Heading Depth: 2
Heading Rank: 3

Heading: inherent conflict

Text: We next consider whether an inherent conflict exists between the Magnuson-Moss Act and binding arbitration under the FAA. McMahon, 482 U.S. at 227, 107 S.Ct. 2332. The Van Blarcums do not identify an inherent conflict. Instead, they only cite to the Magnuson Moss Act's three stated purposes: to improve the adequacy of information available to consumers, prevent deception, and improve competition in the marketing of consumer products. 15 U.S.C. § 2302(a). However, we are not convinced that enforcing binding arbitration agreements would circumvent any of these purposes. A warrantor could honestly market a consumer product with full disclosure to the consumer about the product and still present a predispute binding arbitration agreement to the consumer. These are not inherently inconsistent positions for the warrantor. To so conclude would be tantamount to adopting the now-rejected Wilko mentality that binding arbitration is inherently unfair to consumers. And it would ignore that Congress, when enacting [the FAA], had the needs of consumers ... in mind. Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 280, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995). The Magnuson-Moss Act's legislative history does indicate a concern about unequal bargaining power: For many years warranties have confused and misled the American consumer. A warranty is a complicated legal document whose full essence lies buried in myriads of reported legal decisions and in complicated State codes of commercial law. The consumer's understanding of what a warranty on a particular product means to him frequently does not coincide with the legal meaning..... Typically, a consumer today cannot bargain with consumer product manufacturers or suppliers to obtain a warranty or to adjust the terms of a warranty voluntarily offered. Since almost all consumer products sold today are typically done so with a contract of adhesion, there is no bargaining over contractual terms. See Boyd, 981 F.Supp. at 1439 (quoting S.REP. No. 93-151, at 22-23 (1973)). But the Supreme Court has recognized that perceived uneven bargaining power is not a justifiable reason to hold that arbitration agreements are never enforceable. Gilmer, 500 U.S. at 33, 111 S.Ct. 1647. [C]ourts should remain attuned to wellsupported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds for the revocation of any contract. Gilmer, 500 U.S. at 33, 111 S.Ct. 1647 (quoting Mitsubishi Motors Corp., 473 U.S. at 627, 105 S.Ct. 3346). But because the FAA's purpose was to place arbitration clauses on the same footing as other contractual agreements, courts can resolve unequal bargaining power claims on a case-by-case basis. See Gilmer, 500 U.S. at 33, 111 S.Ct. 1647. However, the Van Blarcums do not allege that their arbitration agreement resulted from fraud or uneven economic power. And the arbitration provision does not restrict the arbitrator's ability to grant relief. Accordingly, we conclude that there is no inherent conflict between the FAA and the Magnuson-Moss Act's purposes. Finding nothing in the Magnuson-Moss Act's text, legislative history, or purposes that preclude enforcement of predispute binding arbitration agreements under the FAA, we hold that the arbitration clause in this case is valid and enforceable.