## Facts

- Five Higgins siblings, ages 14 to 21, agreed to appear on a television program featuring renovation of the home where they lived after their parents’ deaths.
- Participation required signing a 24-page, single-spaced “Agreement and Release” with numerous paragraphs and exhibits, plus a separate one-page release.
- The arbitration provision appeared late in the agreement without a heading; a similar provision appeared in the one-page release.
- After broadcast, the siblings alleged they were forced out of the renovated home and sued multiple entities involved in producing and broadcasting the program, asserting contract and tort-based claims.

## Issues

1. Whether the arbitration clause in the participation agreement was unconscionable under California law.
2. Whether the trial court erred by compelling arbitration of most claims against the television-related defendants.
3. If the arbitration clause was unconscionable, whether the proper remedy was nonenforcement of the clause (rather than invalidation of the entire agreement).

## Decision

- The Court of Appeal granted the petition for writ of mandate.
- It held the arbitration provision unconscionable and unenforceable.
- It directed the trial court to vacate the order compelling arbitration and to enter a new order denying the petitions to compel arbitration as to the siblings’ claims against the television defendants.
- It treated the arbitration provision as severable, declining to invalidate the entire agreement solely because the arbitration clause was unenforceable.

## Legal Principles

- Unconscionability requires analysis of both procedural and substantive unconscionability under a sliding-scale approach.
- Heightened procedural unconscionability may be shown where a clause is presented in an adhesive, take-it-or-leave-it form to parties with markedly inferior bargaining power and is buried in a lengthy document, creating surprise.
- Substantive unconscionability may be shown by materially one-sided terms, including:
  - lack of mutuality (requiring one side to arbitrate while reserving the other’s right to seek injunctive or equitable relief in court);
  - restrictions making the arbitral award final and not subject to appeal or challenge; and
  - cost-splitting provisions that may impede access to statutory remedies.
- When an arbitration clause is unconscionable, a court may refuse to enforce the clause without necessarily invalidating the remainder of the contract.

## Conclusion

The court set aside an order compelling arbitration because the participation agreement’s arbitration clause was formed under adhesive, surprise-producing conditions and imposed one-sided obligations favoring the producer, rendering the clause unconscionable and unenforceable.


Higgins v. Superior Court, 140 Cal. App. 4th 1238 (Ct. App. 2d Dist. 2006)