Originally from:

Journal of American Arbitration (JAA) - Vol. 4, No. 1

To view full journal at the Subscription rate:

Journal of American Arbitration (JAA)

Preview Page

ARTICLES

The Fifth Circuit Holds that an Arbitration
Clause is Procedurally Unconscionable in
Banc One Acceptance Corp. v. Hill Pursuant
to Previous Mississippi Supreme Court
Holding
By Ryan Boland

I. OVERVIEW
In August 2000, Edith Hill signed an automobile lease with East
Ford for the lease of a 2000 Ford Explorer. The lease contained an
arbitration agreement that read “any controversy, claim, action or
inaction arising out of, or relating to, the transaction . . . shall be settled
by arbitration.” It also prescribed that “only members of her ‘immediate
family’ [were able] to use the automobile.” Approximately one year
later, Banc One Acceptance Corporation, the finance company for the
vehicle, discovered that Hill’s niece was using the Explorer and
repossessed it pursuant to the “immediate family” member requirement
in the lease agreement.
Hill filed suit in state court against East Ford and Banc One,
claiming that the vehicle should not have been repossessed because her
payments were all up-to-date. In response, Banc One filed “in federal
court seeking to enforce the arbitration clause in the lease documents.”
Hill argued that the arbitration clause was unconscionable and thus
unenforceable under the Mississippi Supreme Court’s ruling in East
Ford, Inc. v. Taylor, 826 So. 2d 709, 717 (Miss. 2002), which involved
an identical arbitration agreement. The district court agreed with Hill
and refused to compel arbitration of her claim. On appeal, the United