*1 them to allowed guilty pleas and their demonstrating evidence is insufficient (knowing anew pleading between choose of the defendants advise failure to restitution the dis- the amounts of harmless be- full-well restitution was possibility going to impose), intends aware of this to trict nevertheless they were cause trial. possibility. judg- the district court’s Accordingly, contends Ship also
Pac in: ment harmless, degrees to different is variance defendant, defendants because for each AFFIRMED; No. 99-50730 is potential them advised properly
were ap- as to is No. 99-50731 AFFIRMED pre have monetary We liability for fines. Inc., and VA- Testing, Tidelands pellant that, was the defendant when held viously appellant as to and REMANDED CATED pay restitution ordered to ultimately Gallegos; J. Michael fine the maximum exceeding amount not and RE- 00-50009 is VACATED No. by the dis advised was properly he which MANDED.15 defendant court, notify to failure trict harmless. of restitution possibility Crawford, 169 F.3d v. States United Cir.1999). (9th on
Here, imposed orders the restitution for less were and Tidelands Tech
Gamma they of which
than the maximum fines variance, con- The Rule
were advised. Ticknor; to these defen- TICKNOR; harmless as Janet sequently, L. James district Holding, affirm the therefore Larry Ticknor; Tickco dants. We to Corporation, Gamma Lodging restitution orders L.L.C.; Ticknor court’s Tidelands. Plaintiffs-Appellees, Tech and orders of Galle- the restitution Because v. maximum their Stanley exceeded gos and INTERNATIONAL, HOTELS CHOICE fines, not harm- the variance
potential Defendant-Appellant. INC., vacate their to them. We therefore less as No. 00-35048. so that orders and remand restitution how to cor- determine district court Appeals, United States Court See harmless. render it rect the error or Ninth Circuit. Rogers, States United Cir.1993) (“it (9th keeping July and Submitted Argued 318-19 per- to error provision harmless with the 12, 2001 Sept. Filed sentencing opportunity court the mit the harmless”). The error its error render if the district be rendered harmless
would Stanley Gallegos
court resentenced ex- that doesn’t of restitution
an amount they of which maximum fines
ceed the or, advised, Crawford; pursuant
were court vacated if the district be cured
would is, obviously, summary denied. re- versal for defendants' motion 15. The *4 Choice, Butte, Montana; an arbitration Sullivan; drafted contained M. Patrick providing: clause Attorney appellant. for the Montana; Bozeman, Baldwin; Robert K. you for Except against for our claims appellee Attorney for indemnification, actions for collection of Agreement, us under this
moneys owed enjoin you from seeking or actions Marks in violation of this using the any controversy or claim re- Agreement, Agreement, or the breach lating this including any claim Agreement, of this PREGERSON, TASHIMA Before: any part or of this Agreement that this THOMAS, Judges. Circuit invalid, illegal, or other- Agreement void, will be sent THOMAS, wise voidable Judge: Circuit binding final and arbitration accor- whether the we consider appeal, Arbitration dance with Commercial state preempts Act Federal Arbitration Arbitration Asso- Rules of the American unconscionability governing apply will ciation. The arbitrator *5 the circum- contracts. Under adhesion Maryland, without substantive laws of case, we con- presented by stances provi- its conflict of laws reference to not, and we affirm the clude that it does on the arbitration Judgment sion. denying the the district order of any court hav- may award be entered compel motion to arbitration. If to ing jurisdiction. any party fails arbitra- any properly at noticed appear I be en- proceeding, tion award 1998, Ticknor and the Ticknor In James notwithstanding against party, tered the (collectively, “Tick- Corporation Lodging Any arbitration appear. its failure to nor”) Lodge an Econo Franchise executed headquarters at will conducted our (“Franchise Agreement”) Agreement Maryland. office in Hotels, International, Inc. Choice (“Choice”) a hotel lo- operation the for con- Agreement also The Franchise Bozeman, In return for cated in Montana. that stat- provision a choice of law tained fees, Ticknor was payment of franchise the only valid Agreement “This becomes ed: the a license to use granted non-exclusive it, it will be signed we have and when in connection with the Econo-Lodge mark laws interpreted under substantive addition, was to inte- motel. In of laws including its conflict Maryland, not into its national advertis- grate the motel provision.” provide and system and reservations ing con- Agreement did not Guaranty The par- James Ticknor’s other assistance. or a choice an arbitration clause tain either ents, Larry Ticknor and Tickco Janet and However, provide it did provision. lawof (their guaranteed Holding company) LLC that: part in relevant Tick- Agreement. performance Lodging Ticknor also executed nor and severally, jointly do and undersigned (“Guaranty agreement guaranty separate irrevocably, unconditionally guaran- and Agreement”). Lodging Cor- that Ticknor ty to Choice Ticknor, In- ... and James L. poration a Agreement, which was The Franchise Severally, ... will Jointly and dividually, form instrument pre-printed standard 936
perform throughout
term of the
We review de novo a district
covenant,
Agreement
every
each
denying
petition
court’s order
compel
to
arbitration,
payment
obligation
part
on the
including
interpretation
its
validity
Franchisee contained
set forth
scope
of the arbitration
Agreement.
said
clause.
Corp.
Diagnostic
Chiron
v. Ortho
Inc.,
(9th
Sys.
207 F.3d
Cir.
Subsequently,
parties
executed two
2000). “[Questions of arbitrability must
contract addendums drafted
Choice.
be addressed with a healthy regard for the
the amount of liquidated
first reduced
policy
federal
favoring arbitration.” Mo
damages
payable.
potentially
The second
H.
ses
Hosp.
Cone Mem’l
v. Mercury
required Tieknor to make certain facility
1, 24, 103
Constr. Corp.,
460 U.S.
S.Ct.
improvements,
him operate
but allowed
(1983).
937
viable,
sessing whether that defense is
we
analysis. Under
arbitration
from federal
law,
applies.
or must determine which state’s law
2,
legislative
whether of
§
“state
sitting
diversity
look
law Federal courts
to
origin,
applicable
judicial
if
va
forum
a
concerning
making
the law of the
state
govern
issues
arose
enforceability
Sparling
choice of law determination.
v.
lidity, revocability,
Thomas,
Co., Inc.,
635,
Perry v.
864 F.2d
generally.”
Constr.
contracts
Hoffman
2520,
(9th
9,
Cir.1988);
483,
96
see
v. Ac
492 n.
107 S.Ct.
641
also Zinser
482 U.S.
(1987)
Institute,
Inc.,
(emphasis
original).
426
Research
L.Ed.2d
cufix
(9th Cir.2001). Thus,
“Thus,
contract de
because the
generally applicable
fraud, duress,
Montana,
fenses,
complaint
or unconscio-
was filed in
Montana’s
such as
choice
law rules
may
applied
apply.
be
to invalidate arbi
nability,
contravening
agreements without
tration
applies
the Restatement
Casarotto,
Assocs.,
v.
§ 2.” Doctor’s
Inc.
(Second)
187(2)
§
of Conflict of Laws
116 S.Ct.
517 U.S.
question
“when
faced with the
[it is]
(1996).
not,
may
“Courts
L.Ed.2d
give
whether
effect to a contractual
however,
agreements
invalidate arbitration
by
parties.” Keystone,
choice of law
only to arbitra
applicable
under state laws
Sys.
292 Mont.
Corp.,
Inc.
Triad
Thus, “Congress pre
provisions.” Id.
tion
(1998).
1240, 1242
That section
arbitration
singling
cluded States from
out
provides,
part,
in relevant
that:
status,
in
suspect
requiring
for
provisions
par-
The law of the state chosen
provisions
placed ‘upon
that such
stead
”
govern
rights
ties to
their contractual
Id.
footing as other contracts.’
the same
...
applied
will be
... unless
and duties
Co., 417
v. Alberto-Culver
(quoting Scherk
(b)
of the
of the chosen
application
506, 511,
41 L.Ed.2d
94 S.Ct.
U.S.
contrary
state would be
fundamen-
(1974)).
short,
long
as state law
has a materi-
policy
tal
of a state which
validity,
revocabil
concerning
defenses
than the
ally greater
interest
chosen
enforceability
gen
of contracts are
ity, and
particu-
state
the determination
contracts,
erally applied to all
which,
under the role of
lar issue
clauses,
federal
limited to arbitration
188, would be the state of the
section
under the FAA.
courts
enforce them
law the absence of
effec-
applicable
*7
course,
role of the federal
Of
the
by
law the parties.
tive choice of
in
circumstances is limited:
courts
these
(2d) of
of Laws
Restatement
Conflict
question
the sole
is whether the arbitration
187(2) (1988).
§
at
valid and enforceable
clause
issue is
§ 2
Act.
of the Federal Arbitration
the latter
Montana courts conflate
In mak
Corp.,
939
a
would resolve
state
court
pro-
highest
state’s
choice of law
non-Montana
tracts
au
controlling state
question.
law
“the
policy are
public
that violate
visions
—absent
existing
look to
thority
courts
will refuse
Montana
contracts
types of
—federal
predicting potential
without
state law
origin”).
of their
regardless
recognize
v. R.G. Indus
in that law. Moore
changes
adhesion
context of
In the
(9th
Inc.,
tries,
1327
Cir.
789 F.2d
Court
contracts,
Supreme
the Montana
1986).
not
that it will
expressly
determined
has
that “lacks
clause
an arbitration
that,
enforce
court concluded
The district
one-sided, and
is
obligation,
mutuality
law,
provi
the arbitration
under Montana
fa
unreasonably
are
terms that
contains
unen
Agreement is
in
Franchise
sion
the
v. U.S.
Iwen
to the drafter.”
vorable
making
In
as unconscionable.
forceable
Direct,
293 Mont.
West
determination,
court relied
the district
that
(1999).
short, an
In
unconscionable
996
recent
Supreme Court’s
on the Montana
contract
in an adhesion
clause
994-95,
arbitration
Iwen,
at
P.2d
decision
a
Montana as matter
unenforceable
invali
Supreme Court
Montana
which the
Thus,
court
the district
public policy.
almost
agreement
dated an arbitration
the Mon
concluding
that
not err
did
at
provision
the
issue.
identical to
likely hold
would
Supreme Court
tana
enforceability of
the
determine
To
contrary interpreta
another state’s
that
under
provision
specific
a
contractual
unconscionability would
of contract
tion
Iwen,
decide
court must first
a Montana
policy
public
a fundamental
contradict
is one of adhesion.
the contract
whether
reasons, the district
For these
Montana.
so,
provi
If
then the
994-95.
977 P.2d at
the
that
concluded
properly
also
court
weak
against
enforced
will
sion
clause
the arbitration
of whether
question
(1)
if it
not within
contracting party
er
be determined
should
unconscionable
was
(2)
expectations, or
reasonable
that party’s
law.
application of Montana
by
unduly
it is
expectations,
if within those
unconscionable,
pub
against
oppressive,
IV
(citing Pas
P.2d at 994-95
policy.
lic
of a federal court
“The task
Sec., Inc., 223
sage v. Prudential-Bache
state
approximate
is to
diversity action
a
(1986)).
1298, 1302
60, 727 P.2d
Mont.
to make
in order
closely
possible
as
court concluded
The district
right
of the state
that the vindication
sure
a contract
Agreement was
the Franchise
because of
without discrimination
law,
find
and we
Inc.,
Tenneco,
615 adhesion
forum.” Gee
federal
Like the
Cir.1980).
so,
that determination.
(9th
no error in
doing
F.2d
Iwen,
Franchise
at issue
contract
by
pro
bound
courts are
federal
standardized,
form
was a
Agreement
court
highest
of the state’s
nouncements
ac-
forced to
Ticknor
agreement
Metro
Davis v.
state law.
applicable
on
(9th
negotiation. Choice
reject without
Inc.,
cept or
Productions,
addenda
of two
presence
Cir.1989).
argues that
highest
the state’s
“Where
negotiable.
contract was
issue,
indicate that
the task
has not decided
ad-
However,
this. The
record
belies
predict how
is to
federal courts
after
site
drafted
it.” Dimi
denda were
resolve
court would
high
state
*9
same
in the
to Ticknor
Howell,
presented
visit
Bell &
dowich
original
it” manner
leave
(9th Cir.1986),
F.2d
“take
or
at 810
modified
is no evi-
Agreement. There
Cir.1987).
Franchise
(9th
assessing how a
In
dentiary support
the record for Choice’s
the arbitration clause was unconscionable
negotiated
that Ticknor
argument
required
under Montana law because it
in the addenda.
In
changes embodied
binding
bargain-
arbitration of the weaker
fact,
testified that he had not re-
claims,
Ticknor
ing
but
party’s
strong-
allowed the
1,No. which reduced
quested Addendum
bargaining party
opportunity
er
that it
liquidated damages,
Ticknor’s
judicial
seek
remedies to enforce contrac-
unilaterally “because
was added
tual obligations.
requirement
There is no
they’d had with fran-
disagreements
under Montana law that
“arbitration
in the
He also testified that
past.”
chisees
agreements must contain mutual promises
addendum,
specific
which listed
second
that give parties
rights
identical
and obli-
Ticknor
re-
changes and additions
gations
parties
or that the
must be bound
hotel,
quired to make to the
was created
in the exact same manner.” Id. at 996.
McKee,
manage-
one of
after Rod
Choice’s
However, “the disparities
rights
in the
personnel,
inspected
ment
the Bozeman
contracting parties
must not be so
or
presence
hotel site without Ticknor’s
one-sided and unreasonably favorable to
this,
input.
dispute
To
Choice submitted
...
agreement
drafter
that
be-
the affidavit of its Senior Vice President
comes
oppressive.”
unconscionable and
Counsel,
Desantis,
Michael
General
J.
Id.
that,
stating
“[a]ccording to
busi-
[Choice’s
The
arbitration clause
this case al-
records, plaintiffs ... negotiated
ness]
sev-
lowed
bring
against
Choice to
its claims
changes
Agreement].”
eral
How-
[the
court,
Ticknor into state or federal
yet
ever,
participate
any
Desantis did not
forced Ticknor to submit all claims to bind-
(Ticknor
negotiations
had never even
ing arbitration at
headquarters
Choice’s
him),
present any
met
and Choice did not
Maryland.
Iwen involved an almost iden-
of the business records that purportedly
situation,
tical
leading the Montana Su-
negotiations.
reflected the
Given these
preme Court to reach the conclusion that
facts, we conclude that the district court
the clause was unenforceable.
Id. at 993.
did not err in concluding that the Fran-
Thus,
Iwen,
applying
provi-
arbitration
Agreement
chise
anwas
adhesion contract
sion in
mutuality
this case “lacks
of obli-
law.
one-sided,
gation, is
and contains terms
The fact that a contract
is one
unreasonably
are
favorable to the
dispositive
adhesion is not
under Montana
drafter.” Id. at 996.
Sec.,
law. Passage v. Prudential-Bache
that,
Choice suggests
initially
because it
Inc.,
223 Mont.
sought
(1986) (“We
arbitration as to whether franchise
conclude that even if the cus
fees were due—which it was
obligated
not
agreement
tomer
form is an adhesion
to do
contract,
Agreement—
under the Franchise
there
nothing
the record
mutuality
remedy
of arbitration
and no
exists un-
compelling
prevent
law to
enforce
clause.”).
However,
der the contract.
ment
it is the con-
of the arbitration
terms,
tractual
subsequent
second
not the
behav-
step
analysis
the Iwen
(1)
ior of
parties,
ascertain
whether the contract
determines whether
within that
a clause
party’s
expecta
reasonable
be deemed unenforceable as
tions,
(2)
addition,
if
expectations,
within those
unconscionable. See id.
unconscionable,
unduly oppressive,
it is
request
or Choice has withdrawn its
for arbi-
against public policy.
claims,
941
also deter-
inquiry;
our
must
as es- not end
we
law
that Montana
arguable
is
It
construction of
whether Montana’s
is mine
predecessors
and its
by Iwen
tablished
unconscionability
arbitration claus-
of
the
the
contracts' —where
to consumer
limited
Federal Arbitra-
preempted
the
es
readily
power is
bargaining
inequality
by the
analysis
guided
Act.
That
tion
a com-
apply to
does not
apparent —and
in Doctor’s As-
Court’s
Supreme
decision
supposedly
between
transaction
mercial
sociates,
from
originating
another case
In the
owners.
business
sophisticated
Associates,
Doctor’s
Under
Montana.
occasionally
has
Montana
past,
defenses,
contract
applicable
“generally
Compare
in
contexts.
evolved
similar
fraud, duress, or unconscionabili-
as
Baskin-Robbins,
221
Inc. Mont.
v.
Dunfee
arbitra-
applied
invalidate
ty, may be
(1986),
1148,
Story
447,
1153
contravening
agreements without
tion
436,
Bozeman,
Mont.
791
242
City
v.
687,
§
at
In view of these correctly de- that the district clude decision Supreme Court’s Court Supreme that Montana termined does, however, cause Doctor’s Associates pro- the arbitration likely hold that would decisions prior our us to reconsider Agreement of the Franchise vision Cooke, Inc., Wedbush, Noble, v. Cohen under as unconscionable unenforceable (9th Cir.1988), Bayma F.2d law. Montana Co., Upham Barney, Harris Smith (9th Cir.1986). Because F.2d 1023 V Bayma can aspects certain Cohen Associates, with Doctor’s not be reconciled provision The fact that arbitration they insofar must overrule them law does we is unenforceable *11 942 prin-
hold that state law adhesion contract The concept of adhesion first arose in ciples may context, not be invoked to bar arbitra- the insurance Fitzgerald see bility Co., disputes 186, under the Arbitration Aetna Ins. 176 Mont. 577 P.2d Techs., (1978) 370, Flight Act. See Interactive Inc. v. 373 (finding policy “insurance Co., Ltd., Transport Air contract”), Swissair Swiss [to be] an adhesion has but (9th Cir.2001) 1177, 249 1179 (apply- F.3d applied See, since been to other areas. ing three-judge rule that panels may Baker, de- e.g., 494, Anderson v. 196 Mont. 641 part precedent from circuit (1982) (consumer that is incon- 1035, P.2d 1039 intervening sistent with an Supreme bank); Court Sec., Passage v. Prudential-Bache decision). Inc., 60, 1298, 223 Mont. 727 P.2d
(1986) (finding a contract of adhesion where consumer was “faced with an indus VI try wide practice including Arbitration sum, the district court did not err Clauses in standardized brokerage con or, denying the motion to in the dismiss tracts” and thus the possibility “face[d] alternative, to compel arbitration. The ar- being excluded from the securities market bitration clause Agree- Franchise accepted] unless he a contract ment was unenforceable as unconscionable arbitrate”); an agreement to Iwen v. U.S. law, under Montana which was not Direct, West 293 Mont. preempted by the Federal Arbitration Act. (1999) (finding a contract of adhesion between a telephone consumer and compa AFFIRMED.
ny consumer opportunity because had no negotiate agreement for advertising TASHIMA, Judge, Circuit dissenting: Pages). Yellow As theáe cases demon I Because do not believe that the con- strate, however, Montana has used tract at issue was an adhesion contract or adhesion protect unsophisticat doctrine to that its arbitration clause was so one-sided ed consumers in consumer transactions unconscionable, as to make it I respectfully with meaningful no choice. The rule of dissent. The arbitration clause does not adhesion has never applied been to com therefore, violate Montana’s public policy; mercial contracts between sophisticated Maryland law apply. should I Because organizations.2 business also Maryland conclude that would not law prevent the enforcement of the arbitration Plaintiffs are not unsophisticated “con- clause, I would reverse the court’s district sumers” any definition of the term denial of Choice’s motion to dismiss or to and this is not a consumer transaction. compel arbitration.1 Ticknor Lodging Corp., the contracting doubt, Although 1. entirely not free from I parties which none is a resident of, in, accept purposes domiciliary for majori- headquartered of this or is Mon- dissent also, however, accept tana. I ty’s conclusion conclusion that judicially-created purposes for the analysis rule, that follows. making one-sided arbitration unenforceable, clauses in adhesion contracts Recognizing 2. application that its of the adhe- Assoc., does not run afoul of Doctor’s Inc. v. sion doctrine to this commercial contract Casarotto, 517 U.S. 116 S.Ct. anomalous, majority purports to “take the (1996). maj. L.Ed.2d 902 op. See at 941. Maj. op. as we find it.” at 941. In its clear, Similarly, it contrary is not at all to the sentence, however, very majority next assertion, majority’s that "Montana has a ma- concedes that pre- what in fact doing terially greater interest in the transaction than dicting Supreme what "the Montana Court Maiyland,” does id. at likely this action in would hold.” Id. theoretical, but only had op- plaintiffs owns plaintiff, primary party actual, one No adhesion con- choice. properties-the hotel least two also erates at Plain- *12 another Colorado. down their throat. and was crammed at issue tract properties these operating have been tiffs the case contrast to This is direct sepa- two with agreements franchise under majority. upon by the solely relied and Prime Rate franchisors-one rate Iwen, seeking to consumer plaintiff-a the Ticknor Lodge. Redwood other with the faced Pages-was inad the Yellow place an motel sophisticated and experienced an is the accept either choice: with a Hobson’s Additionally, unlike operator. franchise forego advertis- presented, or as contract above, the cited in the cases plaintiffs the Yellow of only publisher the ing with they that have not demonstrated Ticknors ie., marketing area. On alternatives, relevant the Pages that viable no other had alone, being ex- case is distinguishable.5 of the possibility the that fact they “face[d] market franchise] the [hotel from cluded Furthermore, if the is one contract even a contract with [they] accepted] unless adhesion, Iwen agree I do not that of Passage, to arbitrate.” agreement such unconscionability. It of finding a dictates Rather, the record at 1301.3 contends, that the true, Majority as the is a conscious plaintiffs made that suggests differ to arbitrate obligations parties’ because change their affiliation to decision party should either respect.6 But some Lodge mark the Econo that they believed for al- the other proceed' against to wish profitabil- their increase system would contract, under the any obligation most negotiat- the accepted They willingly ity. through arbitration. must do so party that agree- new franchise ed burdens complete Thus, respect, there is in that of benefits expected for the in return ment comparison, By words, mutuality obligations.7 of In other mark.4 Lodge the Econo against right indemnification Indeed, a of not have presumably could have plaintiffs 3. Choice, rights any trademark nor does it have Prime relationship with Rate. continued their sense that protect. It indemnifica- to makes assertion, this majority's Contrary the 4. required to arbitrated are not tion claims of In its choice negotiated transaction. awas third- invariably arise of they out because expressly analysis, the court found law district litiga- already in which are often party claims place between James "\n]egotiations took that tion, remedy, tender if where convenient representative in Mon- and a Choice Ticknor bring a third- is to rejected, of the defense added). (emphasis Maj. op. at 13086 tana.” trade- forAs party claim for indemnification. finding challenge this not majority does claims, infringe- remedy for the classic mark erroneous; fact, it in relies on clearly as remedy a injunction, a federal ment is concluding court's choice district Fur- power to enforce. has no an arbitrator analysis was correct. thermore, action for not file an Ticknor could Agree- moneys this ... under "collection rule, every con- form majority's 5. Under monetary obli- has no because Choice ment” unequal slightly parties of even tract between Thus, the contract. gations to Ticknor under is a adhesion- bargaining power contract differ- analysis, no mutuality it makes in the Clearly, the to invalidation. prone thus is required to arbitrate Choice ence that Supreme did not envision Court Ticknors, Like claims. these a rule. claims other all of its required to arbitrate however, differences, are immaterial agreement. 6. These under the its analysis. Choice reserved mutuality instance, unre- any breach Ticknor 7.For indemnity, things: for three right to sue would be monies owed payment enforcement, lated moneys owed trademark breaches, example, for Such arbitrable. glance, it At first under the contract. aesthetic Ticknor, to follow the Choice, include failure could but not to allow unfair seem insurance. to maintain But, a failure does rules Ticknor breaches. for to sue these Iwen, remedy trate, “the sole for party either ... ceases, inquiry [the court’s] the cost of the [was] advertisement.” 977 agreement to arbitrate has been estab- enforcing P.2d at 996. In remedy, lished as a valid and enforceable contract.” “stronger” party go could to court while Here, above, Id. as stated there is a mutu- party the “weaker” was limited to arbitra- al exchange promises to arbitrate mutu- tion. Id. at 995-96. The court found ally-assertable Therefore, claims. arrangement again, Once unconscionable. law, Maryland the arbitration clause is en- parties’ here are remedies not so limit- forceable. such, ed. As is not clause so one-sided *13 The district court’s order should be re- as to be unconscionable under Montana versed and the remanded with case di- law. grant rections to Choice’s motion to com- recently We noted the unconsciona- pel arbitration. bility analysis has prongs-proeedural two (the
unconscionability manner and circum- formation, ie.,
stances of contract itwas adhesion),
truly a contract of and substan- (which unconscionability
tive analyzes the ie., agreement,
terms of the is so one- conscience).
sided toas shock the Soltani Co., v. West. & So. Ins. Life (9th Cir.2001). COMMISSION, FEDERAL TRADE Although Soltani was law, a case under California Plaintiff-Appellee, our analysis here should proceed way, same objective. same Under an analy- GILL; Keith Murkey, H. Richard sis, clearly this is not an unenforceable Defendants-Appellants. adhesion contract-there was neither proce- dural unconscionability nor substantive un- 00-55122, Nos. 00-55123. eonscionability-and agreement should United States Appeals, Court of be enforced. See id. Ninth Circuit. Because the arbitration clause does not law, violate Montana parties’ Argued choice of July Submitted law should be enforced and Maryland law Filed Sept. applied to dispute. this Maryland courts “treat promises the mutual to arbitrate as
an independently enforceable contract. parties exchanged have prom- mutual
ises to arbitrate disputes under the con-
tract and each promise provides consider-
ation for the other.” Holmes v. Coverall Am., Inc.,
N. 336 Md. 649 A.2d (1994). Thus, long as “there are no
infirmities the formation of the arbitra- itself; agreement is,
tion that there is
a mutual exchange promises to arbi- fact, case, Ironically, in agreement plaintiffs was Choice attempting who are sought
who to arbitrate its claims under the to avoid arbitration Choice's claims.