Eakins v. Corinthian Colleges CA4/2

Filed 2/23/15 Eakins v. Corinthian Colleges CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

ANNA EAKINS,

Plaintiff and Respondent, E058330

v. (Super.Ct.No. CIVRS1207685)

CORINTHIAN COLLEGES, INC. et al., OPINION

Defendants and Appellants.

APPEAL from the Superior Court of San Bernardino County. Keith D. Davis,

Judge. Reversed and remanded with directions.

Payne & Fears, Jeffrey K. Brown, and Matthew J. Cute; Homer Bonner Jacobs

and Christopher King for Defendants and Appellants.

Law Offices of Carlin & Buchsbaum, Gary R. Carlin, Brent S. Buchsbaum, and

Roger E. Haag for Plaintiff and Respondent.

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 When plaintiff Anna Eakins enrolled at a college owned and operated by

defendant Corinthian Colleges, Inc. (Corinthian), she signed an enrollment agreement

requiring the submission of disputes to arbitration pursuant to the “Consumer Rules” of

the American Arbitration Association (AAA). Thus, when she sued Corinthian and

others, alleging discrimination based on sexual orientation, the defendants moved to

compel arbitration.

The trial court refused to compel arbitration; it ruled that the arbitration provisions

were unconscionable because (1) it was not clear what the “Consumer Rules” referred to

and Eakins was not given a copy of them, (2) the Consumer Rules limited discovery, and

(3) the enrollment agreement made Eakins liable for defendants’ attorney fees.

Defendants appeal, contending:

1. The trial court erred by reaching the issue of unconscionability, because this

was consigned to the arbitrator.

2. The trial court erred by ruling that the arbitration provisions were

unconscionable.

We will hold that the trial court could properly decide whether the arbitration

provisions were unconscionable, because they did not clearly and unmistakably provide

that issues of enforceability were reserved for the arbitrator. However, we will also hold

that the trial court erred by ruling that the arbitration provisions were unconscionable.

Accordingly, we will reverse and remand with directions to compel arbitration.

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 I

FACTUAL BACKGROUND

The following facts were shown by the declarations in support of and in

opposition to the petition to compel arbitration.

Corinthian owns and operates Everest College (Everest), which has multiple

locations in California. Eakins enrolled in Everest, at its Ontario Metro campus, twice —

once in 2010, when she started an associate’s degree program, and again in 2011, when

she started a bachelor’s degree program. Each time, she signed one document entitled

“Application” (capitalization altered) (Application) and a second document entitled

“Addendum & Disclosures” (Addendum). We will refer to the Application and the

Addendum collectively as the “Enrollment Agreement.” The relevant provisions of the

2010 Enrollment Agreement and the 2011 Enrollment Agreement were identical, except

as noted below.

The Application was six pages long. It provided:

“Acknowledgement of Waiver of Jury Trial and Availability of AAA Rules

“ . . . I acknowledge that . . . both I and The School are irrevocably waiving rights

to a trial by jury, and are selecting instead to submit any and all claims to the decision of

an arbitrator instead of a court.[1] I also acknowledge that I may at any time, before or

1 At this point, the 2011 version of the Application added the words, “per the
terms detailed in the Addendum.”

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after my admission, obtain a copy of the Consumer Rules of the American Arbitration

Association, at no cost, from The School President.”

The Application incorporated the Addendum by reference. The Addendum was

five pages long. Eakins had to initial separately every provision of the Addendum that

applied to her. These included the following:

“GENERAL RELEASE OF CLAIMS

“I hereby release and hold this School harmless from and against any and all

claims of any kind whatsoever, including allegations related to needle sticks, allied

health and automotive practice and techniques, slips and falls and quality of equipment

and instruction[] (collectively, ‘Claims’), against the School (including its present and

former parent companies, insurers, representatives and all persons acting by or through

them), which I may have for any reason arising out of or relating to my education. I am

aware of the risks involved with my education and knowingly assume those risks

following my investigation into possible injuries and the nature and quality of my

education. I further agree that if I bring any Claim against the School, I shall reimburse

the School for its attorney’s fees and costs incurred as a result thereof. I may opt out of

this general release of Claims provision by delivering a written statement to that effect

received by the School within 30 days of my first execution of an Enrollment

Agreement with the School.”

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 “AGREEMENT TO BINDING ARBITRATION AND WAIVER OF JURY

TRIAL

“I agree that any dispute arising from my enrollment, no matter how described,

pleaded or styled, shall be resolved by binding arbitration under the Federal Arbitration

Act conducted by the American Arbitration Association (AAA) under its Consumer

Rules.

“Terms of Arbitration

“1. Both the School and I irrevocably agree that any dispute between us shall be

submitted to Arbitration.

“2. Neither the School nor I shall file or maintain any lawsuit in any court against

the other, and agree that any suit filed in violation of this Agreement shall be dismissed

by the court in favor of an arbitration conducted pursuant to this Agreement. Both the

School and I agree that filing a court action will cause damage to the other party. We

agree that an appropriate measure of this damage includes the costs and attorney’s fees

actually incurred in compelling arbitration. Such damages shall be paid by the party who

has filed an action in court within 30 days of the court’s order compelling arbitration.

“3. The costs of the arbitration filing fee, the arbitrator’s compensation and

facilities fees will be paid by the School, to the extent that these fees are greater than the

applicable Court filing fee. . . .”

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 “Procedure for Filing Arbitration [¶] . . .

“2. If I desire to file Arbitration, I should first contact the School’s President, who

will provide me with a copy of the AAA Consumer Rules. If I desire to file Arbitration, I

should then contact the AAA, which will provide the appropriate forms and detailed

instructions. I should bring this document to the AAA.”

The Enrollment Agreement gave Eakins the right to cancel and to receive a refund

within seven days after enrollment or until attendance at the first class session, whichever

was later.

Eakins was not told that she could negotiate any of the terms in any of the

documents. She was not given a copy of any arbitration rules.

This action was filed in 2012. In 2013, Eakins’s attorney phoned the AAA’s

customer service hotline and spoke to an AAA representative. When he asked for a copy

of the AAA’s “Consumer Rules,” the representative told him there was no such

document.

He then explained that he had an arbitration agreement stating that any arbitration

would be conducted under the AAA’s “Consumer Rules.” The representative suggested

that he might be looking for the AAA’s “Commercial Rules” and helped him find those

rules on the AAA’s website.

Above the Commercial Rules, the attorney noticed a link to “Supplementary

Procedures for Consumer-Related Disputes” (Supplementary Procedures). When he

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asked the representative about this, she said they “might apply.” He was able to access

and print the Supplementary Procedures.

The Commercial Rules provided:

“R-7. Jurisdiction

“The arbitrator shall have the power to rule on his or her own jurisdiction,

including any objections with respect to the existence, scope or validity of the arbitration

agreement.”

The Commercial Rules also provided:

“R-10. Fixing of Locale

“The parties may mutually agree on the locale where the arbitration is to be held.

If any party requests that the hearing be held in a specific locale and the other party files

no objection thereto within 15 days after notice of the request . . . , the locale shall be the

one requested. If a party objects to the locale requested by the other party, the AAA shall

have the power to determine the locale, and its decision shall be final and binding.”

Finally, the Commercial Rules provided:

“R-21. Exchange of Information.

“(a) At the request of any party or at the discretion of the arbitrator, consistent

with the expedited nature of arbitration, the arbitrator may direct

“(i) the production of documents and other information and

“(ii) the identification of any witnesses to be called.

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 “(b) At least five business days prior to the hearing, the parties shall exchange

copies of all exhibits they intend to submit at the hearing.

“(c) The arbitrator is authorized to resolve any disputes concerning the exchange

of information.”

The Supplementary Procedures referred to themselves internally as “[t]he AAA’s

Consumer Rules.” They supplemented the Commercial Rules in certain disputes between

businesses and consumers.2

II

PROCEDURAL BACKGROUND

The defendants in this action are Corinthian; Richard Mallow, who was allegedly

the president of Everest; and Denise Greco, who was allegedly one of Eakins’s professors

at Everest. Eakins alleges that defendants discriminated against her based on her sexual

orientation. She asserts causes of action for: (1) violation of Education Code section 220

et seq. [prohibiting discrimination by educational institutions that receive state financial

assistance], (2) violation of the Unruh Act (Civ. Code, § 51 [prohibiting discrimination

by businesses]), (3) intentional infliction of emotional distress, (4) negligent infliction of

emotional distress, and (5) violation of Education Code section 66250 et seq. [prohibiting

discrimination by postsecondary educational institutions].

2 The Supplementary Procedures provided, among other things, that any
hearing would be governed by the “Expedited Procedures” of the Commercial Rules.
Eakins does not cite or discuss the Expedited Procedures and does not claim that the
Expedited Procedures are relevant.

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 Defendants filed a petition to compel arbitration. In her opposition, Eakins argued

that the arbitration agreement was unconscionable because:

1. It did not attach and did not correctly identify the applicable arbitration rules;

2. Eakins could be required to pay defendants’ attorney fees and costs; and

3. Depending on the location of the arbitration, Eakins’s expenses could be

greater than those she would incur in court.

In their reply, defendants argued that:

1. It was up to the arbitrator to decide whether the arbitration agreement was

unconscionable; and

2. The arbitration agreement was not unconscionable.

After hearing argument, the trial court denied the petition. It found that the

arbitration agreement was unconscionable. It explained:

“[T]here really wasn’t any genuine opportunity for there to be some discussion

with regard to what the arbitration rules were, . . . and perhaps most troubling to me, . . . a

copy of the AAA . . . Consumer Rules . . . was available only at the dean’s office and

there had to be either a request made or a trip to the dean’s office in order to actually

obtain those rules. And . . . there really isn’t a set of AAA Consumer Rules, as such, that

exist. . . . [¶] This is a bit troubling because there is uncertainty with regard to what

those rules actually are . . . . [C]ounsel understand those AAA rules to . . . contain some

provisions with regard to fee shifting, and perhaps very limited discovery . . . .”

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 III

THE TRIAL COURT’S AUTHORITY TO DETERMINE UNCONSCIONABILITY

Defendants contend that the arbitration provisions delegated the issue of

unconscionability to the arbitrator.

“‘[A]rbitration is a matter of contract and a party cannot be required to submit to

arbitration any dispute which he has not agreed so to submit.’ [Citations.]” (Howsam v.

Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83.)

“Because the parties are the masters of their collective fate, they can agree to

arbitrate almost any dispute — even a dispute over whether the underlying dispute is

subject to arbitration. However, there is a presumption that they have not agreed to this.

‘The question whether the parties have submitted a particular dispute to arbitration, i.e.,

the “question of arbitrability,” is “an issue for judicial determination [u]nless the parties

clearly and unmistakably provide otherwise.” [Citations.]’ [Citation.]” (Bruni v. Didion

(2008) 160 Cal.App.4th 1272, 1286 [Fourth Dist., Div. Two].) “[Q]uestions of

arbitrability . . . include whether . . . a given arbitration clause . . . is unenforceable as

unconscionable. [Citation.]” (Independent Assn. of Mailbox Center Owners, Inc. v.

Superior Court (2005) 133 Cal.App.4th 396, 406.)

“[T]he ‘who (primarily) should decide arbitrability’ question . . . is rather arcane.

A party often might not focus upon that question or upon the significance of having

arbitrators decide the scope of their own powers. [Citation.] And, given the principle

that a party can be forced to arbitrate only those issues it specifically has agreed to submit

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to arbitration, one can understand why courts might hesitate to interpret silence or

ambiguity on the ‘who should decide arbitrability’ point as giving the arbitrators that

power, for doing so might too often force unwilling parties to arbitrate a matter they

reasonably would have thought a judge, not an arbitrator, would decide. [Citations.]”

(First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 945.)

Following the lead of Rent-a-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 68-

69, courts commonly call an agreement to have the arbitrator determine questions of

arbitrability a “delegation provision” or a “delegation clause.” (E.g., Malone v. Superior

Court (2014) 226 Cal.App.4th 1551, 1555.)

“Where, as here, the evidence is not in conflict, we review the trial court’s denial

of arbitration de novo. [Citation.]” (Pinnacle Museum Tower Assn. v. Pinnacle Market

Development (US), LLC (2012) 55 Cal.4th 223, 236.)

The Enrollment Agreement provided for arbitration of “any and all claims” and

“any dispute.” However, such broad but general language is not a sufficiently clear and

unmistakable manifestation of the intent to delegate the question of arbitrability to the

arbitrator. (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 783-788

[agreement to arbitrate “all matters” and “[a]ny disputes, differences or controversies”].)

Defendants therefore argue that the Enrollment Agreement incorporated the AAA

Consumer Rules by reference,3 including the rule giving the arbitrator “the power to rule

3 In part IV.A, post, we will agree with defendants that the Enrollment
Agreement’s incorporation of the Consumer Rules was neither vague nor
unconscionable.

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on . . . objections with respect to the existence, scope or validity of the arbitration

agreement.” They claim that this supplied the necessary clear and unmistakable evidence

of intent.

We disagree, for the following reasons, as stated in Ajamian v. CantorCO2e, L.P.,

supra, 203 Cal.App.4th at p. 788:

“Some courts have, in fact, held that a reference to the rules of arbitration services,

which rules permit the arbitrator to determine issues of his or her jurisdiction, constitutes

clear and unmistakable evidence that the parties intended to delegate the issue to the

arbitrators. [Citing federal cases.]

“Even California cases have reached a similar conclusion, albeit not with respect

to a claim that an arbitration clause was unconscionable . . . . [Citing Rodriguez v.

American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1123 [Fourth Dist., Div.

Three]; Dream Theater, Inc. v. Dream Theater (2004) 124 Cal.App.4th 547, 550 [Second

Dist., Div. Four].]

“Other reported decisions, however, hold to the contrary, in keeping with the

concern of the United States Supreme Court . . . that there be a sufficient showing that the

parties focused and agreed upon the issue. For example, several federal circuit courts

hold that the incorporation of NASD rules is insufficient to show a clear and

unmistakable agreement to have arbitrators decide their own jurisdiction. [Citations.]

“In our view, while the incorporation of AAA rules into an agreement might be

sufficient indication of the parties’ intent in other contexts, we seriously question how it

12
provides clear and unmistakable evidence that [they] intended to submit the issue of the

unconscionability of the arbitration provision to the arbitrator, as opposed to the court.

There are many reasons for stating that the arbitration will proceed by particular rules,

and doing so does not indicate that the parties’ motivation was to announce who would

decide threshold issues of enforceability.

“Moreover, the reference to AAA rules does not give an employee, confronted

with an agreement she is asked to sign in order to obtain or keep employment,[4] much of

a clue that she is giving up her usual right to have the court decide whether the arbitration

provision is enforceable. Assuming that [a party] reads the arbitration provision in the

proposed agreement, notes that disputes will be resolved by arbitration according to AAA

rules, and even has the wherewithal and diligence to track down those rules, examine

them, and focus on the particular rule . . . , the rule merely states that the arbitrator shall

have ‘the power’ to determine issues of its own jurisdiction, including the existence,

scope and validity of the arbitration agreement. This tells the reader almost nothing,

since a court also has power to decide such issues, and nothing in the AAA rules states

that the AAA arbitrator, as opposed to the court, shall determine those threshold issues,

or has exclusive authority to do so, particularly if litigation has already been commenced.

“Again, we must be mindful of what the United States Supreme Court has

emphasized unflinchingly for decades: notwithstanding the public policy favoring

4 While Ajamian happened to involve an employer-employee contract, in our
view identical considerations apply to the school-student contract here.

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arbitration, arbitration can be imposed only as to issues the parties agreed to arbitrate;

given the slim likelihood that the parties actually contemplated who would determine

threshold enforceability issues, as well as the default presumption that such issues would

be determined by the court, those threshold issues must be decided by the court absent

clear and unmistakable proof to the contrary. . . . ‘[I]t is not enough that ordinary rules

of contract interpretation simply yield the result that arbitrators have power to decide

their own jurisdiction. Rather, the result must be clear and unmistakable, because the law

is solicitous of the parties actually focusing on the issue. Hence silence or ambiguity is

not enough.’” (Ajamian v. CantorCO2e, L.P., supra, 203 Cal.App.4th at pp. 789-791.)

As defendants note, Ajamian ultimately declined to decide whether incorporation

of the AAA rules would be a sufficiently clear and unmistakable manifestation of intent.

(Ajamian v. CantorCO2e, L.P., supra, 203 Cal.App.4th at p. 791.) Rather, it held that

“the reference to AAA rules . . . was insufficient for another reason: the [underlying

agreement] did not mandate that AAA rules would necessarily apply. Instead, the

arbitration clause stated that the arbitration would be held according to NASD rules,

AAA rules, or the rules of ‘any other alternative dispute resolution organization’ . . . .”

(Ibid.) Thus, when the plaintiff signed the agreement, she had no way of knowing what

rules would apply. (Ibid.)

While we recognize that Ajamian side-stepped the issue, we find its discussion

compelling. As it noted, the AAA rules give the arbitrator the “power” to rule on

objections to the validity of the arbitration agreement. However, they do not provide that

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the arbitrator’s power in this respect is exclusive. In other words, they permit, but they

do not require the arbitrator to rule on objections to the validity of the arbitration

agreement. At most, incorporating the AAA rules creates an “ambiguity” as to the

“rather arcane” question of who should decide arbitrability; the United States Supreme

Court has held that this is insufficient to overcome the presumption that arbitrability is an

issue for judicial determination. (First Options of Chicago, Inc. v. Kaplan, supra, 514

U.S. at p. 945.)

We therefore conclude that the trial court did not err by proceeding to decide the

issue of unconscionability.

IV

UNCONSCIONABILITY

Defendants also contend that the trial court erred by ruling that the arbitration

agreement was unconscionable.

“An agreement to arbitrate, like any other contract, is subject to revocation if the

agreement is unconscionable. [Citation.]” (Carmona v. Lincoln Millennium Car Wash,

Inc. (2014) 226 Cal.App.4th 74, 83.) However, in assessing unconscionability, we must

focus solely on the arbitration provisions, rather than on the Enrollment Agreement as a

whole. Under federal law, “courts treat an arbitration clause as severable from the

contract in which it appears and enforce it according to its terms unless the party resisting

arbitration specifically challenges the enforceability of the arbitration clause itself,

[citation], or claims that the agreement to arbitrate was ‘[n]ever concluded,’ [citations].”

15
(Granite Rock Co. v. International Broth. of Teamsters (2010) 561 U.S. 287, 301.)

California law is in accord. (Bruni v. Didion, supra, 160 Cal.App.4th at p. 1285.)

“Unconscionability consists of both procedural and substantive elements. The

procedural element addresses the circumstances of contract negotiation and formation,

focusing on oppression or surprise due to unequal bargaining power. [Citations.]

Substantive unconscionability pertains to the fairness of an agreement’s actual terms and

to assessments of whether they are overly harsh or one-sided. [Citations.] A contract

term is not substantively unconscionable when it merely gives one side a greater benefit;

rather, the term must be ‘so one-sided as to “shock the conscience.”’ [Citation.]

“ . . . Both procedural unconscionability and substantive unconscionability must be

shown, but ‘they need not be present in the same degree’ and are evaluated on ‘“a sliding

scale.”’ [Citation.] ‘[T]he more substantively oppressive the contract term, the less

evidence of procedural unconscionability is required to come to the conclusion that the

term is unenforceable, and vice versa.’ [Citation.]” (Pinnacle Museum Tower Assn. v.

Pinnacle Market Development (US), LLC, supra, 55 Cal.4th at pp. 246-247.) “The party

resisting arbitration bears the burden of proving unconscionability. [Citations.]” (Id. at

p. 247.)

A. Procedural Unconscionability.

“As indicated, procedural unconscionability requires oppression or surprise.

‘“Oppression occurs where a contract involves lack of negotiation and meaningful

choice, surprise where the allegedly unconscionable provision is hidden within a prolix

16
printed form.”’ [Citation.]” (Pinnacle Museum Tower Assn. v. Pinnacle Market

Development (US), LLC, supra, 55 Cal.4th at p. 247.)

Here, there was evidence of oppression; the arbitration provisions were part of a

preprinted form, presented on a take-it-or-leave-it basis. However, this “only show[s] a

low level of procedural unconscionability because . . . the elements of surprise or, a

fortiori, misrepresentation [citation] were not present.” (Woodside Homes of Cal., Inc. v.

Superior Court (2003) 107 Cal.App.4th 723, 730 [Fourth Dist., Div. Two].)

As preprinted forms go, the Enrollment Agreement was neither the best nor the

worst we have seen. It totaled 11 pages. It used typefaces considerably smaller than in

an ordinary book or magazine. The arbitration provisions did not particularly stand out;

they were not in bold or capitals. Eakins had to initial the arbitration provision — but

then, she had to initial every applicable provision of the Addendum.

At the same time, however, Eakins did not testify that she did not read or was not

aware of the arbitration provisions. (Cf. Bruni v. Didion, supra, 160 Cal.App.4th at

p. 1291 [“[F]ailure to read the contract helps ‘establish actual surprise . . . .’

[Citation.]”].)5 The fact that she initialed the applicable paragraph of the Addendum was

evidence that she did read the arbitration provisions. Inasmuch as she had the burden of

5 In her appellate brief, Eakins asserts that “she did not read the arbitrability
clause.” However, this appears to refer to the provision of the Consumer Rules giving
the arbitrator the power to rule on the existence, scope or validity of the arbitration
agreement; it does not appear to refer to the Enrollment Agreement itself. In any case,
the assertion is not cited to any evidence in the record.

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proving unconscionability, we can only conclude that the arbitration provisions did not

come as a surprise.

The only even arguable surprise was as to the content of the Consumer Rules.

Certainly there is no shortage of California cases holding that the failure to attach a copy

of the applicable arbitration rules is a factor pointing toward unconscionability.

(Carmona v. Lincoln Millennium Car Wash, Inc., supra, 226 Cal.App.4th at pp. 84-85

[Second Dist., Div. Eight]; Samaniego v. Empire Today, LLC (2012) 205 Cal.App.4th

1138, 1146 [First Dist., Div. Three]; Ajamian v. CantorCO2e, L.P., supra, 203

Cal.App.4th at p. 797 [First Dist., Div. Five]; Zullo v. Superior Court (2011) 197

Cal.App.4th 477, 485-486 [Sixth Dist.]; Trivedi v. Curexo Technology Corp. (2010) 189

Cal.App.4th 387, 393 [First Dist., Div. Four]; Suh v. Superior Court (2010) 181

Cal.App.4th 1504, 1516 [Second Dist., Div. Five]; Harper v. Ultimo (2003) 113

Cal.App.4th 1402, 1406-1407 [Fourth Dist., Div. Three].)

In more recent cases, however, there is a discernable trend toward analyzing the

failure to provide a copy of applicable arbitration rules on a more fact-sensitive, case-by-

case basis. (See Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676,

690-691 [Second Dist., Div. Four]; Peng v. First Republic Bank (2013) 219 Cal.App.4th

1462, 1470-1472 [First Dist., Div. One]; see also Bigler v. Harker School (2013) 213

Cal.App.4th 727, 737 [Sixth Dist.].) Thus, for example, the fact that the rules are

accessible, on the Internet or otherwise, cuts against unconscionability. (Lane v. Francis

Capital Management LLC, supra, 224 Cal.App.4th at p. 691.) It likewise cuts against

18
unconscionability that the rules themselves are fair. (Peng v. First Republic Bank, supra,

219 Cal.App.4th at p. 1472.)

We disagree with the trial court that there was any uncertainty as to what was the

AAA’s “Consumer Rules” referred to. “The general rule is that the terms of an extrinsic

document may be incorporated by reference in a contract so long as (1) the reference is

clear and unequivocal, (2) the reference is called to the attention of the other party and he

consents thereto, and (3) the terms of the incorporated document are known or easily

available to the contracting parties. [Citations.]” (DVD Copy Control Assn., Inc. v.

Kaleidescape, Inc. (2009) 176 Cal.App.4th 697, 713.)

Eakins made much of the fact that an AAA representative (mis)informed her

counsel that there was no such thing as AAA Consumer Rules. However, the same

representative, in the same phone call, guided her counsel to the Commercial Rules,

which in turn guided him to the Supplementary Procedures. These, taken together,

constituted the AAA’s Consumer Rules.6

Eakins could have obtained a copy of the Consumer Rules simply by asking for

them. Indeed, even after she signed the Enrollment Agreement, she could still have

asked for a copy of the rules; then, if they were disagreeable, she could have canceled the

Enrollment Agreement at any time within seven days after signing it. Eakins suggests

that a student who asked for a copy of the rules might be viewed as litigious and

6 Eakins’s counsel claims “[i]t is still unclear” what the “Consumer Rules”
actually are. This is somewhat disingenuous.

19
subjected to intimidation. However, there is no evidence of this. Eakins did not testify

that this was why she did not ask for a copy of the rules. Most important, this assumes

the student waits until a dispute has arisen before asking for a copy of the rules. If a

student asks for a copy of the rules at or near the time of signing the contract, these fears

would seem groundless. In any event, Eakins also could have obtained a copy via the

Internet.

Eakins argues that the Consumer Rules were unfair in certain respects. We will

discuss these arguments as a matter of substantive unconscionability below. For now, we

conclude that Eakins has shown only minimal procedural unconscionability.

B. Substantive Unconscionability.

Eakins argues that three aspects of the Consumer Rules — and hence the

arbitration provisions incorporating them — were substantively unconscionable: (1) Rule

R-7, giving the arbitrator the power to rule on the existence, scope or validity of the

arbitration agreement; (2) Rule R-21, limiting discovery; and (3) Rule R-10, letting the

arbitrator set the place of the hearing. Eakins additionally argues that the attorney fee

provision of the Enrollment Agreement was substantively unconscionable.7

7 The attorney fee provision was contained in a very broad release of claims.
Eakins, however, does not argue that the release of claims itself is unconscionable or
even relevant.

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 1. The delegation provision.

As we already held in part III, ante, Rule R-7 merely allows the arbitrator to reach

arbitrability issues in an appropriate case, when there is the necessary clear and

unmistakable evidence that the parties actually agreed to have the arbitrator do so.

Because there is no such evidence here, Eakins is not subject to this provision of the

rules.

2. Location-dependent expenses.

Eakins argues that, if the arbitrator chooses an inconvenient location for the

arbitration, she could incur costs greater than she would incur in a court proceeding.

However, “[w]e assume that the arbitrator will operate in a reasonable manner in

conformity with the law. [Citations.]” (Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th

975, 984.) Thus, we must presume that the arbitrator will set the hearing in a reasonable

and mutually convenient location.

3. Limitations on discovery.

In Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th

83, the California Supreme Court held that an employee cannot be required to arbitrate

statutory claims against an employer under the Fair Employment and Housing Act

(FEHA) unless (among other things) the arbitration procedure provides for “adequate

discovery.” (Id. at pp. 104-106.) The court further held, however, “that when parties

agree to arbitrate statutory claims, they also implicitly agree, absent express language to

the contrary, to such procedures as are necessary to vindicate that claim. [Citation.] . . .

21
[I]t is undisputed that some discovery is often necessary for vindicating a FEHA claim.

Accordingly, . . . the employees in this case . . . are at least entitled to discovery sufficient

to adequately arbitrate their statutory claim, including access to essential documents and

witnesses, as determined by the arbitrator(s) . . . .” (Id. at p. 106.) It concluded that

“although the employees are correct that they are entitled to sufficient discovery as a

means of vindicating their sexual discrimination claims, we hold that the employer, by

agreeing to arbitrate the FEHA claim, has already impliedly consented to such discovery.

Therefore, lack of discovery is not grounds for holding a FEHA claim inarbitrable.”

(Ibid.)

We may assume that Eakins’s claims arising under antidiscrimination statutes

similar to FEHA are similarly nonwaivable. (See Civ. Code, § 3513 [“a law established

for a public reason cannot be contravened by a private agreement.”].) But if so, then the

Enrollment Agreement must be similarly construed as including an implicit agreement to

provide sufficient discovery, even in an arbitration. Rule R-21 gives the arbitrator the

power to direct “the production of documents and other information . . . .” Thus, “the

absence of express provisions . . . allowing discovery does not render the arbitration

agreement unconscionable. Rather, those terms are implied as a matter of law as part of

the agreement. [Citation.]” (Sanchez v. Western Pizza Enterprises, Inc. (2009) 172

Cal.App.4th 154, 177; accord, Lane v. Francis Capital Management LLC, supra, 224

Cal.App.4th at p. 693.)

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 4. Fee-shifting.

Defendants argue that the trial court erred by even considering whether the

attorney fee provision was unconscionable, because it was severable from the arbitration

agreement itself. We agree.

As already mentioned, under the doctrine of severability, “if the party resisting

arbitration is claiming that the arbitration clause itself is unconscionable, a court must

decide this claim. [Citations.] However, provided the court concludes that the arbitration

clause itself is not unconscionable, it must compel arbitration, leaving it up to the

arbitrator to determine whether the contract as a whole is unconscionable. [Citation.]”

(Bruni v. Didion, supra, 160 Cal.App.4th at p. 1290.)

Here, even assuming the attorney fee provision was, in fact, unconscionable, that

would not detract from the validity or enforceability of the arbitration provisions. Under

similar circumstances, federal appellate courts have held that it is up to the arbitrator to

decide whether an attorney fee provision is unconscionable. (Bob Schultz Motors, Inc. v.

Kawasaki Motors Corp., U.S.A. (8th Cir. 2003) 334 F.3d 721, 726-728; Boomer v. AT&T

Corp. (7th Cir. 2002) 309 F.3d 404, 418, fn. 6; Thompson v. Irwin Home Equity Corp.

(1st Cir. 2002) 300 F.3d 88, 91-92.)

We recognize that some California appellate courts have refused to compel

arbitration because the agreement between the parties included an unconscionable

attorney fee provision; in each of these cases, however, the court also found additional

unconscionable provisions, and it determined that the unconscionable provisions could

23
not be severed. (Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24

Cal.4th at pp. 103-104, 120-127; Carmona v. Lincoln Millennium Car Wash, Inc., supra,

226 Cal.App.4th at pp. 88-90; Samaniego v. Empire Today, LLC, supra, 205 Cal.App.4th

at pp. 1147, 1149; Ajamian v. CantorCO2e, L.P., supra, 203 Cal.App.4th at pp. 799-800,

802-804; Pinedo v. Premium Tobacco Stores, Inc. (2000) 85 Cal.App.4th 774, 780-781.)

In this case, by contrast, the only even arguably unconscionable provision is the attorney

fee provision,8 and it can readily be severed from the arbitration provisions. (Cf. Serpa v.

California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 709-710 [compelling

arbitration after severing unconscionable attorney fee provision].)

We therefore conclude that the arbitration provisions themselves were not

substantively unconscionable.

V

DISPOSITION

Eakins has never disputed that, if Corinthian is entitled to compel arbitration, then

the other defendants are likewise entitled to compel arbitration. (See generally Ronay

Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 837-840 [some

nonparties, including agents and third-party beneficiaries, can enforce arbitration

agreement].)

8 We emphasize that we are not deciding whether the attorney fee provision
is, in fact, unconscionable.

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 Thus, the order denying the petition to compel arbitration is reversed. The matter

is remanded with directions to enter an appropriate order granting the petition to compel

arbitration. Defendants are awarded costs on appeal against Eakins.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

RAMIREZ
P. J.

We concur:

HOLLENHORST
J.

MILLER
J.

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