Fisher v. MoneyGram International, Inc.
A158168
Cal. Ct. App.Jul 27, 2021Background
- Plaintiff Jonathan Fisher (63, veteran with poor eyesight) completed two MoneyGram transfers at Walmart in Feb 2016 and later sued alleging MoneyGram’s system facilitated fraud and failed to protect customers; he sought class relief under the UCL.
- The Send Form contained Terms and Conditions on the back; the arbitration clause (the "Arbitration Provision") was printed in 6‑point Myriad Pro Light Condensed, tightly spaced, in a two‑column block and was effectively unreadable without magnification.
- The Arbitration Provision required AAA commercial arbitration at the AAA office nearest the agent, barred class participation, imposed a one‑year filing limitation, and stated each party must bear its own experts’ and attorneys’ costs.
- MoneyGram petitioned to compel arbitration; Fisher opposed, arguing lack of informed assent and that the clause was procedurally and substantively unconscionable.
- The superior court denied the petition, finding extreme procedural unconscionability (tiny, hidden print; adhesion contract) and substantive unconscionability (one‑year limitation, AAA Commercial Rules’ fees, fee‑shifting language); the court refused to sever and the Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Formation / assent | No meaningful assent because Terms were hidden and unreadable to Fisher (poor eyesight) | Same point size as rest of contract; references on front alerted signers to attached terms | Court did not decide formation separately; proceeded on unconscionability and found procedural unconscionability supported by surprise/oppression |
| Procedural unconscionability (legibility & placement) | Clause was buried on back in 6‑point faint type, narrow spacing — surprise and adhesion => high procedural unconscionability | Point size uniform with other terms; no categorical minimum font size; FAA preempts any rule on font | Court: extreme procedural unconscionability as a matter of law given 6‑point font, cramped layout, and placement on reverse side |
| Substantive unconscionability (one‑year limitation & AAA Commercial Rules) | One‑year limitations and AAA Commercial Rules’ commercial fees deter consumer claims and are one‑sided | AAA rules/administration and possible fee waivers would mitigate cost concerns | Court: clauses (one‑year SOL; use of AAA Commercial Rules) are substantively unconscionable in the aggregate because they create a substantial deterrent effect |
| Fee‑shifting (each party bears own experts/attorneys) & severance | Clause effectively waives potential Section 1021.5 private‑attorney‑general fee incentives; cannot rely on AAA rules to cure this uncertainty; severance would require major re‑writing | Provision reflects American Rule; AAA rules allow fee awards; court could sever offending provisions | Court: fee clause contributes to substantive unconscionability; severance denied because arbitration provision is permeated by unconscionability and severance would materially change the bargain |
Key Cases Cited
- Sanchez v. Valencia Holding Co., LLC, 61 Cal.4th 899 (2015) (explains procedural and substantive unconscionability and sliding scale test)
- Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal.4th 83 (2000) (framework for unconscionability in arbitration agreements and limits on severance)
- OTO, L.L.C. v. Kho, 8 Cal.5th 111 (2019) (small font and visually impenetrable arbitration clause can establish high procedural unconscionability)
- Engalla v. Permanente Medical Group, Inc., 15 Cal.4th 951 (1997) (trial court as factfinder on arbitration petitions; reviewing standards)
- Gutierrez v. Autowest, Inc., 114 Cal.App.4th 77 (2003) (arbitration clause inconspicuous on reverse of signature page supports unconscionability)
- Conservatorship of Link, 158 Cal.App.3d 138 (1984) (very small print releases may be unenforceable; <8‑point is unsatisfactory reading medium)
- Domestic Linen Supply Co., Inc. v. LJT Flowers, Inc., 58 Cal.App.5th 180 (2020) (closely spaced small type across a back page can defeat formation and enforceability)