Submitted: September 24, 2019
from United States District Court for the Eastern District of
Arkansas - Little Rock
GRUENDER, ARNOLD, and GRASZ, Circuit Judges.
ARNOLD, Circuit Judge.
case is about the enforceability of an agreement to arbitrate
disputes between a law firm and its client. Though we share
some of the client's and the district court's
concerns about the events giving rise to this lawsuit, we
hold that the district court erred in refusing to enforce the
agreement. We therefore reverse and remand.
resident Jerri Plummer received a wholly unexpected phone
call one day in October 2014 from someone named Yolanda.
Yolanda knew that Plummer had had a transvaginal mesh
implanted about six years earlier, and Yolanda asserted that
the mesh was defective and that Plummer could die if she did
not have it removed. Yolanda informed Plummer that she could
arrange for Plummer to undergo surgery in Florida to have the
mesh removed and could connect her with an attorney who could
help her obtain compensation for the surgery and for her
travel to Florida. Since Yolanda knew some of her medical
history and since Plummer had recently experienced minor pain
she attributed to the mesh, she agreed to Yolanda's
arrangement. Plummer explains that, after the call, she felt
as if she "had a ticking time bomb inside of" her.
Plummer traveled to Florida and had the mesh removed about
two months later.
maintains that the surgery has caused her substantial and
ongoing medical problems. She sued a horde of defendants in
the medical and legal fields for fraud, constructive fraud,
breach of fiduciary duty, civil conspiracy, unjust
enrichment, violations of the Arkansas Deceptive Trade
Practice Act, and malpractice. Among those sued were
Minnesota attorneys Rhett McSweeney and David Langevin and
their law firm, McSweeney Langevin, LLC, whom we refer to
collectively as "McSweeney Langevin." McSweeney
Langevin moved the district court to compel arbitration in
light of a retainer agreement that Plummer had signed. That
agreement contained a provision beginning with the phrase
"Alternate Dispute Resolution" in bold type that
went on to say that, if mediation failed to resolve any
disputes the parties might have, they "agree to submit
their dispute to binding arbitration in Washington D.C.
before JAMS," which is an organization specializing in
alternative dispute resolution. The agreement then provides:
"CLIENT HEREBY ACKNOWLEDGES THAT ARBITRATION IS
CLIENT'S ONLY RECOURSE AND THAT CLIENT WAIVES
CLIENT'S RIGHT TO TRIAL BY JURY AND TO JUDICIAL APPEAL BY
SIGNING THIS AGREEMENT."
district court held that the parties had entered into a
contract, but it declined to enforce it on the ground that
the contract was unconscionable under Washington D.C. law,
which the parties agree is appropriate under a choice-of-law
provision in the agreement. As the district court saw it,
"the defendant attorneys and their firm, through agents
acting on their behalf, somehow got their hands on
Plummer's cell phone number and, after instilling fear of
death in her, solicited her to not only undergo a surgical
procedure in another state, but also to allow them to
represent her" in a lawsuit against the mesh's
manufacturer. The district court found significant
Plummer's statement that she felt she "was in a life
or death situation and there was no time to dicker over
details with people who informed [her] of [her] possible
impending death and offered a procedure to save [her] life
and to seek justice on [her] behalf." Further, the court
pointed out that McSweeney and Langevin were attorneys, but
Plummer had a tenth-grade education, was inexperienced in
reading contracts, and did not know what arbitration was. The
district court also noted that the retainer agreement was
sent to Plummer electronically along with several other
documents she was asked to sign. Finally, the court found
that Plummer could not afford the costs of arbitration: Her
income was minimal, and her share of the arbitration costs
and her travel costs made arbitration inaccessible.
Langevin appeals the district court's denial of the
motion to compel arbitration-a decision we review de novo.
See Shockley v. PrimeLending, 929 F.3d 1012, 1017
(8th Cir. 2019). We are a little uncertain about the
procedural posture in which this case comes to us. Under the
Federal Arbitration Act, Plummer arguably could have demanded
a jury trial on the question of the enforceability of the
arbitration clause. See 9 U.S.C. § 4. But
see Am. Heritage Life Ins. Co. v. Orr, 294 F.3d 702, 710
(5th Cir. 2002). She did not do so, however, and so the
motion here could have eventually been resolved by a trial to
the district court. See Neb. Mach. Co. v. Cargotec Sols.,
LLC, 762 F.3d 737, 743-44 (8th Cir. 2014). Though
neither party, so far as we can tell from the record, moved
for summary judgment, the district court ruled in
Plummer's favor as a matter of law based on what it
concluded were the undisputed facts set forth in
Plummer's amended complaint, declarations attached to
Plummer's responses to the motion to compel arbitration,
and some supplemental sworn submissions. In its briefs,
McSweeney Langevin raised no objections to this procedure or
to the district court's determination that there did not
exist genuine issues of material fact necessitating a trial,
and at oral argument it eschewed any interest in doing so. We
therefore accept the district court's findings as true
and deal only with their legal consequences.
Langevin maintains first that an arbitrator should decide the
matter of unconscionability, not a court, because
Plummer's arguments about unconscionability, and the
district court's acceptance of them, are directed at the
retainer agreement as a whole and not just the arbitration
provision within it. See Buckeye Check Cashing, Inc. v.
Cardegna, 546 U.S. 440, 445-46 (2006). McSweeney
Langevin, however, failed to raise this matter to the
district court, and this is not merely a new argument; it is
an entirely new issue, see Hintz v. JPMorgan Chase Bank,
N.A., 686 F.3d 505, 508 (8th Cir. 2012), so we review it
for plain error at most. But we have held before that
"the requirement to proceed in federal court can hardly
be considered a miscarriage of justice" necessitating
plain-error relief. See Wiser v. Wayne Farms, 411
F.3d 923, 927-28 (8th Cir. 2005).
therefore take up the matter of unconscionability ourselves.
Under the FAA, agreements to arbitrate "shall be valid,
irrevocable, and enforceable, save upon such grounds as exist
at law or in equity for the revocation of any contract."
9 U.S.C. § 2. One of these grounds is unconscionability.
See Kindred Nursing Ctrs. Ltd. P'ship v. Clark,
137 S.Ct. 1421, 1426 (2017). Under the governing D.C. law,
"a contract may be unconscionable either because of the
manner in which it was made or because of the substantive
terms of the contract or, more frequently, because of a
combination of both." See Urban Invs., Inc. v.
Branham, 464 A.2d 93, 99 (D.C. 1983) (per curiam). These
two concepts are frequently referred to as procedural
unconscionability and substantive unconscionability.
begin with substantive unconscionability, which in this case
involves Plummer's ability to pay for arbitration. Though
the arbitration provision does not mention who will pay the
costs of arbitration, it does say that arbitration will
proceed before JAMS, and JAMS rules provide that parties will
pay a pro rata share of costs unless they agree otherwise.
According to the district court, Plummer provided evidence
that her share of costs was extremely high compared to her
income, rendering arbitration prohibitively expensive.
not decide whether the district court correctly found that
Plummer had carried her burden to show that arbitration was
prohibitively expensive. On appeal, McSweeney Langevin has
offered to pay Plummer's share of the arbitration costs,
which, it asserts, cures any substantive unconscionability in
the contract. Plummer maintains that we should not consider
post-hoc offers like this one since others bound by the same
contract terms might be dissuaded from pursuing claims
because of the high costs of arbitration. We recognize that
other courts agree with her. See, e.g., Spinetti
v. Serv. Corp. Int'l, 324 F.3d 212, 217-18 n.2 (3d
Cir. 2003); Morrison v. Circuit City Stores, Inc.,
317 F.3d 646, 676-77 (6th Cir. 2003) (en banc). Plummer also
points out that D.C. courts have noted that unconscionability
is determined at the time the contract is made. See
Urban, 464 A.2d at 99-100 n.7.
nevertheless hold that McSweeney Langevin's offer has
cured any substantive unconscionability that the agreement
may have contained. We rely heavily on the fact that at least
two (and probably three) separate Washington D.C. federal
district courts applying D.C. law have allowed post-hoc
offers to cover arbitration expenses to cure
substantive-unconscionability difficulties. See Fox v.
Comput. World Servs. Corp., 920 F.Supp.2d 90, 102
(D.D.C. 2013); Nelson v. Insignia/Esg, Inc., 215
F.Supp.2d 143, 157 (D.D.C. 2002); see also Nur v. K.F.C.,
USA, Inc., 142 F.Supp.2d 48, 52 (D.D.C. 2001). These
courts are presumptively familiar with D.C. law, and so we
think their approval of this strategy best reflects that law.
And though D.C. courts have observed that unconscionability
is determined at the time the contract is made, that does not
mean that a defendant cannot cure any substantively
unconscionable provisions it contains by offering to pay for
arbitration. Courts invoke this time-of-the-making rule when
one party argues that a ...