Connie A. Nagrampa v. Mailcoups, Inc. The American Arbitration Association

O’SCANNLAIN, Circuit Judge,

with whom Judges KOZINSKI and TALLMAN join, and with whom Judge CLIFTON joins as to Parts II-D and III, dissenting:

I respectfully dissent because I believe that the Court ignores clear Supreme Court precedent in choosing to entertain Nagrampa’s challenge to the validity of the entire franchise contract. In addition, I cannot agree with much of the majority’s analysis regarding the substantive uncon-scionability of the arbitration clause.

I

Connie A. Nagrampa, a resident of Contra Costa County (in the San Francisco Bay area), California, earned over $100,000 per year as a Sales Manager for ValPak Direct Marketing Systems, a position she held from 1992-1998.

In the summer of 1998, a MailCoups, Inc.,1 representative approached Nagram-pa and encouraged her to become a Mail-Coups franchisee.2 In June of that year, MailCoups sent Nagrampa a notebook containing a franchise offering circular and franchise agreement. After Nagrampa *1295prepared a spreadsheet showing her expected costs and profits, her contact at MailCoups confirmed that her calculated 41 percent profit figure was “about right.”

On August 24, 1998, Nagrampa signed the thirty-page franchise agreement, declaring under penalty of perjury that she had read and agreed to each of its provisions. Article 35 of the agreement, entitled “Dispute Resolution,” reads:

Arbitration. Any controversy or claim arising out of or relating to this Agreement, or any breach thereof, including, without limitation, any claim that this Agreement or any portion thereof is invalid, illegal or otherwise voidable or void, shall be submitted to arbitration before and in accordance with the rules of the American Arbitration Association or successor organization. Provided, however, that this clause shall not be construed to limit MailCoups’ right to obtain any provisional remedy, including, without limitation, injunctive relief from any court of competent jurisdiction, as may be necessary in MailCoups’ sole subjective judgment, to protect its Service Marks and proprietary information. The decision of the arbitrator shall be binding upon the parties and judgment upon the award may be entered in any court having jurisdiction thereof. The situs of the arbitration proceedings shall be the regional office of the American Arbitration Association which is located in Boston, Massachusetts. The costs of arbitration shall be borne equally by MailCoups and Franchisee. Each party shall be responsible for the fees and expenses of its respective attorneys and experts.

The term of the franchise agreement was ten years.

Although Nagrampa worked over sixty hours a week, her MailCoups franchise was a failure. Despite her efforts, she claims that she never received any personal income, instead incurring substantial debt to cover her living expenses. Owing in part to her precarious financial situation, Nagrampa sent MailCoups a September 22, 2000, letter terminating her franchise agreement and stating her intent to pay certain “amounts due” under the agreement.

MailCoups never received payment for the full amount it claimed was due under the franchise agreement, and in December 2001, it filed a Demand for Arbitration, seeking payment of over $80,000 owed by Nagrampa. MailCoups requested the arbitration be held in Los Angeles, the location of its regional office. Na-grampa initially participated in the pre-hearing procedures, but she objected to holding the arbitration in Los Angeles, requesting instead that it take place in Contra Costa County. When the parties were unable to agree on a location, the American Arbitration Association (“AAA”) arbitrator determined that — per the terms of the franchise agreement — the arbitration would be held in Boston.

When she received a schedule of fees for the arbitration, Nagrampa requested a waiver for all fees from the AAA. However, she failed to complete the necessary forms to receive the waiver, despite being advised of the requirements. The waiver became moot when Nagrampa ceased her participation in the arbitration following the designation of Boston as the venue. The arbitration proceeded without her and resulted in an award against her of over $160,000.

In the meantime, Nagrampa filed suit against MailCoups and the AAA in California state court, alleging that MailCoups was liable for common-law misrepresentation and fraud, as well as for violating the California Consumer Legal Remedies Act and California’s franchise and unfair com*1296petition laws. Nagrampa sought monetary-damages from MailCoups and an injunction preventing the company from enforcing the arbitration clause against her.

Invoking the parties’ diversity of citizenship, MailCoups removed the case to federal court and then moved to compel arbitration and to stay or dismiss the court proceedings. In opposition, Nagrampa argued that the arbitration clause was unconscionable and thus unenforceable. She argued that the arbitration clause was procedurally unconscionable because her “franchise agreement [was] a contract of adhesion. It was presented to her on a take-it-or-leave-it basis. She was not allowed to negotiate any of its terms.” She then gave three grounds for the arbitration clause’s substantive unconscionability: 1) a venue of Boston was unfair, 2) the arbitrator was not neutral, and 3) Mail-Coups did not disclose the costs of arbitration.

The district court concluded that the agreement was valid and granted Mail-Coups’ motion to dismiss.3 Nagrampa timely appealed, and a three-judge panel affirmed the district court by written opinion on March 21, 2005. Following Na-grampa’s petition for rehearing, á majority of the Court voted to rehear the case en banc.

II

California law places the burden of proving unconscionability on the party challenging the validity of the arbitration clause.4 See Szetela v. Discover Bank, 97 Cal.App.4th 1094, 1099, 118 Cal.Rptr.2d 862 (Ct.App.2002). “[U]nconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83, 99 Cal.Rptr.2d 745, 6 P.3d 669, 690 (Cal.2000) (internal quotation marks omitted). Although both elements must be present for a court to exercise its discretion to invalidate an agreement as unconscionable, they need not be present in the same degree. Id. Because procedural and substantive unconscionability exist on a sliding scale, “the 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.” Id.

Nagrampa claims that the franchise agreement’s arbitration clause was both procedurally and substantively unconscionable. At the district court, Nagrampa insisted that the “franchise agreement [was] a contract of adhesion” and therefore procedurally unconscionable. I remain con*1297vinced that this Court lacks jurisdiction to consider that argument.

A

The Supreme Court has identified two types of challenges to the validity of an arbitration agreement. Buckeye Check Cashing, Inc. v. Cardegna, —- U.S.-, 126 S.Ct. 1204, 1208, 168 L.Ed.2d 1088 (2006). “One type challenges specifically the validity of the agreement to arbitrate.” Id. “The other challenges the contract as a whole, either on a ground that directly affects the entire contract (e.g., the agreement was fraudulently induced) or on the ground that the illegality of one of the contract’s provisions renders the whole contract invalid.” Id. Section 4 of the FAA requires that these two types of challenges be treated differently. See id.

Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395, 402, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967), recognized as much when it considered the question of “whether a claim of fraud in the inducement of the entire contract is to be resolved by the federal court, or whether the matter is to be referred to the arbitrators.” Under § 4 of the FAA, 9 U.S.C. § 4, a federal court must order arbitration “once it is satisfied that’ the making of the agreement for arbitration or the failure to comply [with the arbitration agreement] is not in issue.’ ” Id. at 403, 87 S.Ct. 1801 (quoting 9 U.S.C. § 4) (alteration in original). “Accordingly, if the claim is fraud in the inducement of the arbitration clause itself — an issue which goes to the ‘making’ of the agreement to arbitrate — the federal court may proceed to adjudicate it.” Id. at 403-04, 87 S.Ct. 1801. However, the court may not “consider claims of fraud in the inducement of the contract generally.” Id. at 404, 87 S.Ct. 1801; see id. (“[A] federal court may consider only issues relating to the making and performance of the agreement to arbitrate.”).

Buckeye reaffirmed this approach. 126 S.Ct. at 1208-09. Drawing from Prima Paint, Buckeye states that “unless the challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance.” Id. at 1209. Therefore, “a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator.” Id. at 1210 (emphasis added). Although Buckeye concerned an attempt to invalidate an entire contract based on “the illegality of one of the contract’s provisions,” the Supreme Court equated this type of challenge with one brought “on a ground that directly affects the entire agreement.” See id. at 1208.

B

Nagrampa clearly challenged the validity of the contract as a whole. Even her more directed complaint against the arbitration clause incorporates a contract-of-adhesion claim that “directly affects the entire agreement.” See id. Considering the Supreme Court’s classification of this type of challenge as one that must be considered by an arbitrator, our duty could not be clearer. When an agreement to arbitrate is challenged, we must look to see whether the challenge goes to the validity of the contract as a whole or whether it goes “specifically” to the arbitration clause. Id. Whether difficulties result from our lack of jurisdiction should have no bearing on our decision on the issue; we “are bound to apply rules enacted by Congress with respect to matters — here, a contract involving commerce — over which it has legislative power.” Prima Paint, 388 U.S. at 406, 87 S.Ct. 1801. The FAA was specifically enacted with respect to *1298just such a matter. See id. at 405, 87 S.Ct. 1801.

Contrary to the majority’s view, Na-grampa does not specifically and exclusively target the arbitration clause as a contract of adhesion. Nor could she, considering her argument on appeal that the clause was “hidden” in the contract and never “pointed out or explained to her.” Indeed, she argues that the arbitration agreement is procedurally unconscionable because the entire contract was a contract of adhesion, offered on a “take-it-or-leave-it” basis. A clear statement of her position can be found in the Plaintiffs Opposition to Motion to Compel [Arbitration], filed with the district court: “Ms. Nagram-pa’s franchise agreement is a contract of adhesion.” It is the validity of the entire franchise agreement that Nagrampa challenges. The opposition brief continues: “Ms. Nagrampa’s entire contract was obtained by fraud and therefore should be revoked.”

Refusing to acknowledge these statements made by Nagrampa to the district court,5 the majority proclaims: “[N]owhere in her complaint does, she seek rescission or invalidation of the entire contract based on it being a contract of adhesion.” Majority Opinion at 1277. Yet not only does Nagrampa’s argument in her opposition brief reveal her request to revoke the entire agreement, but her complaint itself offers no reason to believe that she wished the court only to sever the arbitration clause. In her fourth, fifth, and sixth causes of action, Nagrampa asked for “such other and further relief as the court may deem proper.” The majority blindly ignores Nagrampa’s later statements that shed light on what “further relief’ she desired.

Adequate review of the district court requires us to evaluate all relevant documents filed with that court, including those that led the district court to state: “Plaintiff characterizes the franchise agreement as a contract of adhesion, and argues that it is therefore procedurally unconscionable per se.” Because the full record makes evident that Nagrampa’s claims of procedural unconscionability were not aimed specifically at the arbitration provision, Prima Paint and Buckeye require us to leave this argument to be decided by an arbitrator.

Turning away from a comprehensive analysis of the documents filed by Na-grampa, the majority seeks to distill the “crux of the complaint.” Majority Opinion at 1264. This narrowing technique leads the majority to conclude that Nagrampa’s cognizable claims “specifically and exclusively challenge the validity of the arbitration provision.” Id. at 1264. Having reached this conclusion, the majority apparently allows Nagrampa to attack such clause on any ground, “even if substantive state law requires an examination of the making of the entire contract.” Id. at *12991271. Such interpretation would allow us to reach grounds that the Buckeye Court recognized to “directly affect[ ] the entire agreement,” Buckeye, 126 S.Ct. at 1208, thus making a mockery of the FAA and its “national policy” in favor of arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 627, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985).

The majority adopts certain language from Buckeye, while ignoring more relevant passages. Buckeye notes that two different types of challenges fall within the broader category that must be submitted to an arbitrator. 126 S.Ct. at 1208. One of those types is a challenge on a ground that “renders the whole contract invalid,” id., but that is not the type of challenge Nagrampa brings. Hers is more correctly characterized as a challenge “on a ground that affects the entire agreement.” See id. Nothing in Buckeye suggests that a party can base an attack on grounds that directly affect the entire contract, so long as the “crux of the complaint” is not a challenge to the contract as a whole.

The majority insists that none of Na-grampa’s claims would invalidate the entire contract, if proved. Majority Opinion at 1271. Buckeye does not support this approach; it identifies the first type of challenge that must be submitted to an arbitrator, not based on whether the ground for attack invalidates the entire contract, but on whether the ground “directly affects” it. See Buckeye, 126 S.Ct. at 1208. The Supreme Court could have stated that challenges to an arbitration clause “on a ground that [invalidates] the entire contract” must be decided by an arbitrator, but it did not do so. See id. Thus, where Buckeye draws a distinction between the two types of challenges that must be submitted to an arbitrator, the majority’s approach collapses the two into one. In my view, had the Supreme Court meant to adopt such an approach, it simply would have done so.

C

Our sister circuits do not follow the majority’s approach. Instead, the Second, Fifth, Sixth, Eighth, and Eleventh Circuits 6 all agree that any argument of un-conscionability must be directed to the arbitration clause alone to be considered by a court rather than the arbitrator.

Speaking directly to the issue, the Eleventh Circuit held that “the FAA does not permit a federal court to consider claims alleging the contract as a whole was adhesive.” Jenkins v. First Am. Cash Advance of Ga., LLC, 400 F.3d 868, 877 (11th Cir.2005). Specifically, “ ([i]f ... [the party’s] claims of adhesion, unconscionability, ... and lack of mutuality of obligation pertain to the contract as a whole, and not to the arbitration provision alone, then these issues should be resolved in arbitration.’ ” Id. (quoting Benoay v. PrudentialBache, Secs., Inc., 805 F.2d 1437, 1441 (11th Cir.1986)) (alterations in original). The Second Circuit7 reached a similar result in JLM Industries, Inc. v. Stolt-Nielsen SA, 387 F.3d 163, 170 (2d Cir.2004), when it refused to consider a contract-of-adhesion *1300claim that did not apply to “the arbitration clause alone.”

Similarly, the Sixth Circuit8 in Burden v. Check Into Cash of Kentucky, LLC, 267 F.3d 483, 493 (6th Cir.2001), specifically rejected plaintiffs’ claims that arbitration agreements were unenforceable because contained in contracts of adhesion; such claims could not be considered because they did not “attack the arbitration clause, separate from the underlying loan agreements.” Id. at 492 n. 3 (emphasis added). While the Sixth Circuit returned several claims to the district court because they specifically concerned the arbitration clause, the contract-of-adhesion claim was not one of them. Id. at 492. Burden’s holding on the issue we face is unambiguous: “When determining the enforceability of an arbitration agreement, a court ‘can investigate the existence of such grounds as exist at law or in equity for the revocation of any contract .... However, the grounds for revocation must relate specifically to the arbitration clause and not just to the contract as a whole.’ ” Id. at 492-93 (quoting Hooters of Am. v. Phillips, 173 F.3d 933, 938 (4th Cir.1999), which cites 9 U.S.C. § 2; Prima Paint, 388 U.S. at 402-04, 87 S.Ct. 1801 (alteration in original)).

Similarly, the Fifth Circuit has stated that “unless a defense relates specifically to the arbitration agreement, it must be submitted to the arbitrator as part of the underlying dispute.” Primerica Life Ins. Co. v. Brown, 304 F.3d 469, 472 (5th Cir.2002).9 In the same vein, Rojas v. TK Communications, Inc., 87 F.3d 745 (5th Cir.1996), rejected an attack on an arbitration clause as an unconscionable contract of adhesion because it was “an attack on the formation of the contract generally, not an attack on the arbitration clause itself.” Id. at 749. For the Rojas Court, one indication that the plaintiffs attack was not limited to the arbitration provision was her argument that the agreement was based on “inequality of bargaining power.” Id. at 749 n. 3. Tellingly, Nagrampa’s contract-of-adhesion claim is based, in part, on just such an argument.

Finally, the Eighth Circuit has held that a plaintiffs claims must be referred to arbitration when the “arguments of uncon-scionability ‘cannot fairly be limited to the making of the arbitration clause.’ ” Madol v. Dan Nelson Auto. Group, 372 F.3d 997, 1000 (8th Cir.2004) (quoting Houlihan v. Offerman & Co., Inc., 31 F.3d 692, 695 (8th Cir.1994)). In Houlihan, the Eighth Circuit rejected an attempt to target an arbitration clause on grounds that applied to the entire contract, reasoning that the plaintiff had not presented “any rationale for concluding that the alleged misrepresentations relate[d] only to the arbitration clause.” 31 F.3d at 695 (emphasis added).

The majority chooses to focus only on whether a plaintiffs claim would invalidate the entire contract, ignoring Buckeye’s plain statement regarding challenges brought on “a ground that directly affects the entire agreement,” 126 S.Ct. at 1208. As a result, despite protestations to the contrary, our decision today places us yet again in conflict with our sister circuits and likely on course for yet another reversal by the Supreme Court.

*1301D

In addition to proffering her eontract-of-adhesion argument, Nagrampa also contends that the arbitration clause alone is proeedurally unconscionable because it is found on the twenty-fifth page of the thirty-page franchise agreement and because she was not informed about the clause or the costs of arbitration. These claims pertain solely to the arbitration provision’s validity and are thus cognizable under Pri-ma Paint and Buckeye.

Nagrampa does not cite any authority for the proposition that MailCoups was required to apprise her of the existence of the arbitration clause or the costs associated with arbitration. Indeed, California case law establishes that MailCoups had no such obligation. In Brookwood v. Bank of America, 45 Cal.App.4th 1667, 1672, 53 Cal.Rptr.2d 515 (Ct.App.1996), for example, an employee sought to obtain a judicial forum for her employment discrimination suit by claiming that she was not aware that her new-employee paperwork included an arbitration clause. The court rejected the employee’s attempt to evade arbitration and explained that she “was bound by the provisions of the [arbitration] agreement regardless of whether [she] read it or [was] aware of the arbitration clause when [she] signed the document.” Id. at 1674, 53 Cal.Rptr.2d 515 (internal quotation marks omitted; alterations in original); see also id. (“Reasonable diligence requires the reading of a contract before signing it. A party cannot use his own lack of diligence to avoid an arbitration agreement.” (internal quotation marks omitted)).

Here, MailCoups sent the franchise agreement to Nagrampa and asked her to return it with her signature. Nagrampa— an experienced businessperson who had worked for more than seven years in the direct marketing field — had ample opportunity to read the arbitration clause and to consider its implications; by her own admission, she had the franchise agreement containing the arbitration clause for nearly two months. It follows that this case is appreciably different from those in which an inexperienced consumer was pressured to sign an agreement without being afforded an opportunity to read or to comprehend the fine print. See, e.g., Gutierrez v. Autowest, Inc., 114 Cal.App.4th 77, 89, 7 Cal.Rptr.3d 267 (Ct.App.2003) (holding that an arbitration clause in an automobile lease was proeedurally unconscionable where the clause was “particularly inconspicuous,” it was “printed in eight-point typeface on the opposite side of the signature page,” and the consumer was not informed of the clause’s existence). Na-grampa’s failure to read the arbitration clause — or to consult a lawyer about its ramifications — does not excuse her from complying with its terms.10 Thus, in my *1302view, Nagrampa has failed to make any showing that the arbitration provision was procedurally unconscionable, and her claim of unconscionability cannot succeed because California law requires both procedural and substantive unconscionability.

Ill

Though Nagrampa’s unconscionability claim fails for the lack of procedural un-conscionability, we may reject her arguments that the arbitration agreement is substantively unconscionable as well. As the majority notes, Nagrampa argued that the arbitration agreement was substantively unfair for three reasons. First, she asserted that the venue prwision defeated her ability to defend her claims. Second, she claimed that the agreement’s fee-splitting provision was unconscionable. Third, she contended that the AAA was a repeat player and therefore biased against her.

A

I agree with the majority that Nagram-pa’s “repeat player” argument is without merit. See Majority Opinion at 1284-1286.

Nagrampa contends that the AAA and its arbitrators have an interest in ruling in favor of “repeat players” such as Mail-Coups because corporate parties that frequently appear before the AAA will take their business elsewhere if they receive an adverse ruling. Nagrampa is unable, however, to muster any case law in which courts have questioned the neutrality of the AAA. Instead, she relies upon Mercuro v. Superior Court, which held that it was substantively unconscionable to require an employee to arbitrate his employment discrimination claim before the National Arbitration Forum because the employer bene-fitted from repeatedly appearing before the eight arbitrators the organization employed in the Central District of California. 96 Cal.App.4th 167, 178, 116 Cal.Rptr.2d 671 (Ct.App.2002).

Mercuro is readily distinguishable because there is no evidence to suggest that the AAA uses a comparably small number of arbitrators or that MailCoups has repeatedly appeared before the organization. Moreover, the AAA Commercial Arbitration Rules incorporate safeguards to neutralize any bias in favor of repeat litigants, requiring arbitrators to “disclose to the AAA any circumstance likely to affect impartiality or independence, including ... any past or present relationship with the parties or their representatives.” See AAA Commercial Arbitration Rules, R-19(a). Because either party can then request that the arbitrator be removed from the matter, this rule minimizes the risk of a repeat player effect favoring corporate parties. See AAA Commercial Arbitration Rules, R-19(b).

Indeed, California courts have uniformly concluded that the AAA provides a neutral forum for dispute resolution. See Armendariz, 99 Cal.Rptr.2d 745, 6 P.3d at 687-88 (“there are sufficient institutional safeguards, such as scrutiny by the plaintiffs bar and appointing agencies like the AAA, to protect against corrupt arbitrators”); Izzi v. Mesquite Country Club, 186 Cal.App.3d 1309, 1318, 231 Cal.Rptr. 315 (Ct.App.1986) (stating that the AAA is not “presumptively biased against either party. The rules of the [AAA] specified by the clause as governing the resolution of *1303disputes are generally regarded to be neutral and fair”).

Because there is neither case law nor record evidence supporting the proposition that the AAA is a biased forum, Nagrampa has failed to establish that the arbitration clause is substantively unconscionable on that basis.

B

I also agree with the majority that the fee-splitting provision of the arbitration clause is not substantively unconscionable, but I cannot agree that the provision could endanger Nagrampa’s ability to vindicate her statutory rights.

Nagrampa argues that the arbitration clause is substantively unconscionable because it requires the parties to share the costs of arbitration.11 Her argument is premised, however, upon an uncounte-nanced extension of California law.

Much of Nagrampa’s argument relies upon Armendariz v. Foundation Health Psychcare Services, Inc. and its progeny. 24 Cal.4th 88, 99 Cal.Rptr.2d 745, 6 P.3d 669 (Cal.2000). In Armendariz, the Supreme Court of California held that where an employer imposes mandatory arbitration as a condition of employment, the arbitration agreement cannot “require the employee to bear any type of expense that the employee would not be required to bear if he or she were free to bring the action in court.” Id. at 687 (emphasis omitted). The Armendariz decision was strictly confined to the employment setting, and the Supreme Court of California recently refused to address whether its holding should be extended to other contexts. See Cruz v. PacifiCare Health Sys., Inc., 30 Cal.4th 303, 133 Cal.Rptr.2d 58, 66 P.3d 1157, 1165 n. 3 (Cal.2003). Further, as Armendariz recognized, California has established a default rule that explicitly calls for the parties to split both administrative and legal costs. Cal.Civ.Proc.Code § 1284.2. Therefore, the fee-splitting provision does not automatically render the parties’ arbitration clause substantively unconscionable.

Neither have the fees in this particular case forced Nagrampa “to forgo unwaivea-ble public rights.” Majority Opinion at 1292 (quoting Little v. Auto Stiegler, Inc., 29 Cal.4th 1064, 1079, 130 Cal.Rptr.2d 892, 63 P.3d 979 (2003)). In certain cases, a party may be entitled to fee allocation where it “is necessary to enable [ ] statutory rights to be vindicated.” Indep. Ass’n of Mailbox Ctr. Owners, Inc., v. Superior Court, 133 Cal.App.4th 396, 417, 34 Cal.Rptr.3d 659 (Ct.App.2005); see also Gutierrez, 114 Cal.App.4th at 89, 7 Cal.Rptr.3d 267 (“We conclude that where a consumer enters into an adhesive contract that mandates arbitration, it is unconscionable to condition that process on the consumer posting fees he or she cannot pay.”). However, in Mailbox Center, the court was unable “to evaluate the financial capabilities of the franchisees,” and so returned the case to the trial court for further hearings on the issue. 133 Cal.App.4th at 417, *130434 Cal.Rptr.3d 659. Meanwhile, in Gutierrez, the plaintiffs “presented substantial evidence in the trial court that the administrative fees exceeded their ability to pay.” Gutierrez, 114 Cal.App.4th at 90, 7 Cal.Rptr.3d 267. In any event, the defendant in Gutierrez never contested the plaintiffs’ inability to pay the fees. Id. at 91, 7 Cal.Rptr.3d 267.

Nagrampa cannot present evidence that the arbitration fees would prevent her from vindicating her statutory rights, and MailCoups never conceded the issue, instead arguing that Nagrampa’s bank account balance during the relevant time period belied her claim that she could not afford to pay the arbitration fees or to go to Boston. Nagrampa had an average balance of $16,000 in her personal bank account during the relevant time period, more than enough to pay the $6,500 in fees. In light of this, there is simply no basis for holding that the arbitration fees here were insurmountable or unreasonable.12

C

I must also disagree with the majority’s conclusion that the venue provision — specifying Boston as the arbitration site — was unconscionable.

Nagrampa’s argument on this point relies heavily upon Bolter v. Superior Court, 87 Cal.App.4th 900, 104 Cal.Rptr.2d 888 (Ct.App.2001). There, the court held that a forum selection clause in a franchise agreement was unconscionable because it required California carpet-cleaning franchisees to arbitrate their claims against the franchisor in Utah. Id. at 909, 104 Cal.Rptr.2d 888. In reaching this conclusion, the court emphasized that the parties’ original franchise agreement did not contain either an arbitration clause or a forum selection provision and that the franchisees therefore could not have anticipated that they would be required to travel to an inconvenient location to arbitrate their claims. Id. The franchisor added the forum selection clause to subsequent versions of the contract, to which the franchisees were required to give their assent if they wished to keep their businesses. Id. at 907, 104 Cal.Rptr.2d 888. The court specifically noted that “[o]nly a person contemplating whether to purchase a franchise for the first time would have been in the position to reject[the franchisor’s] ‘take it or leave it’ attitude.” Id.

Where Bolter’s extenuating circumstances are absent, however, California courts have sustained the validity of forum selection clauses in franchise agreements. In Lu v. Drydean-U.S.A. of California, Inc., for example, the court upheld a clause requiring California franchisees to litigate claims against their franchisor in Florida. 11 Cal.App.4th 1490, 1493, 14 Cal.Rptr.2d 906 (Ct.App.1992). The court held that it was reasonable for the franchisor, which had its principal place of business in Miami, to designate Florida as the forum for all litigation. Id. at 1493 n. 2, 14 Cal. Rptr.2d 906. The court explained that “[m]ere inconvenience or additional expense is not the test of [the forum selection clause’s] unreasonableness since it may be assumed that the plaintiff received under the contract consideration for these things.” Id. at 1493, 14 Cal.Rptr.2d 906 (internal quotation marks omitted).

*1305Nagrampa’s situation is comparable to that of the franchisees in Lu, because — as the district court recognized — the oppressive features of the Bolter case are absent from MailCoups’ franchise agreement. Like in Lu, MailCoups’ designation of Boston as the arbitration site is reasonable, as Boston is MailCoups’ principal place of business. Unlike in Bolter, the provision designating Boston as the arbitration forum was included in the original franchise agreement presented to Nagrampa, and she thus knew — or, if she neglected to read the agreement, she should have known — that the contract included a forum selection clause. Moreover, the franchisees in Bolter introduced evidence suggesting that they would have been financially unable to pursue their claims against the franchisor if they were required to arbitrate in Utah. 87 Cal.App.4th at 909-10, 104 Cal.Rptr.2d 888. The limited financial evidence presented by Nagrampa does not establish that her financial situation precludes her from traveling to Boston for the arbitration. The forum selection clause therefore is not substantively unconscionable.13

Because Nagrampa had sufficient funds to pursue her claim against MailCoups even in Boston, there is no danger that the venue provision would “impede Nagrampa from vindicating statutory rights.” Majority Opinion at 1285. There is no reason to consider Boston “a location so prohibitively costly to Nagrampa” that she could not participate. Id. at 1290. Nagrampa had the funds to participate and chose not to. The majority’s assertion to the contrary, that Nagrampa “may not be able to maintain her claim to recover any of her losses if forced to do so in Massachusetts,” is directly contrary to the record. Id. Any such claim is also flimsy given the amounts of money that were involved in the franchise. Nagrampa claims that she paid more than $400,000 in fees to MailCoups over her franchise’s brief two-year existence, all while receiving no personal income. To claim now that the cost of a round-trip plane ticket from San Francisco to Boston ($338.60), a four-night hotel stay ($316.00), and twelve meals ($160.00), will prevent her from vindicating her statutory rights (priceless) is laughable.14

The arbitration provision’s specification of a Boston venue is not unconscionable, *1306nor will it result in the waiver of Nagram-pa’s statutory rights.

D

Inexplicably, the majority manufactures an argument that was never raised by either party. Without explanation as to why it decided to create a new issue, the majority concludes that the burden of proof is on MailCoups to establish that the venue provision will not diminish Nagram-pa’s substantive rights as a California franchisee. While her original complaint alleged violations of the statutes cited by the majority, Nagrampa never argued that these statutes shifted the burden to Mail-Coups while before the district court, in her opening brief here, in front of the three-judge panel, or before the en banc panel.

Pursuant to Federal Rule of Appellate Procedure 28, our usual practice is to require parties to make an argument containing their “contentions and the reasons for them, with citations to the authorities and parts of the record on which the appellant relies.” We generally enforce this rule by reviewing “only issues argued specifically and distinctly in a party’s opening brief.” Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir.1994); see also Carroll v. Nakatani, 342 F.3d 934, 944 (9th Cir.2003) (same); United States v. Hernandez-Valdovinos, 352 F.3d 1243, 1248 n. 4 (9th Cir.2003) (“Issues that were not presented to the district court generally cannot be raised for the first time on appeal.”). Indeed, we have refused to “manufacture arguments” for a party who offers only bare assertions. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir.2001).

Here the majority manufactures an argument for Nagrampa that lacks even so much as a bare assertion in support. I am puzzled; I would have expected a reasoned explanation for such a drastic departure from our past precedent and practice. I continue to believe that “[a]s judges, the essence of our role is restrained service as impartial arbiters of disputes framed by litigants. It is not, I respectfully suggest, to act as backup counsel when litigants make poor arguments, or when they come into court without first having ‘figure[d] out’ their cases.” Kennedy v. Lockyer, 379 F.3d 1041, 1065 (9th Cir.2004) (O’Scann-lain, J., dissenting). There is no justification for creating new issues or new arguments to resolve this case, especially when MailCoups lacks a meaningful opportunity to be heard on these issues.

Thus, I would avoid this issue entirely and hold that it was waived by the parties.

IV

In summary, I continue to believe that we ignore the Supreme Court’s direction in Prima Paint and Buckeye at our peril when we choose to consider Nagrampa’s contract-of-adhesion claim. In any event, the arbitration clause here was neither proeedurally nor substantively unconscionable. I would therefore affirm the judgment of the district court.

I respectfully dissent.

. MailCoups is a corporation incorporated under the laws of Delaware and has its principal place of business in Massachusetts.

. A MailCoups franchisee recruits businesses to advertise through coupons mailed to residences in her service area.

. The district court denied MailCoups’ motion to compel arbitration because § 4 of the Federal Arbitration Act ("FAA”) requires that an arbitration hearing take place in the district in which the motion to compel was filed. See 9 U.S.C. § 4 ("The hearing and proceedings ,.. shall be within the district in which the petition for an order directing such arbitration is filed.’’). Relying upon the franchise agreement’s designation of Boston as the arbitration forum, the district court concluded that the District' of Massachusetts was the proper venue for 'MailCoups to obtain an order compelling arbitration. MailCoups did not file a cross-appeal.

. I agree with the' majority that the parties have waived the franchise agreement's choice of law provision, which specified Massachusetts law as controlling, by arguing their respective causes on the basis of California law both in the district court and here. See Panno v. Russo, 82 Cal.App.2d 408, 186 P.2d 452, 454 (Cal.Ct.App.1947) ("[A] party to a contract may by conduct or representations waive the performance of a condition thereof or be held estopped by such conduct or representations to deny that he has waived such performance.”).

. Neither Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1 (1st Cir.1999), nor Alexander v. Anthony International, L.P., 341 F.3d 256 (3d Cir.2003), cited (much less discussed) Prima Paint or analyzed the jurisdictional issue presented in this case. As such, they offer little insight into the approaches taken by our sister circuits on this issue.

. The majority cites David L. Threlkeld & Co. v. Metallgesellschaft Ltd., 923 F.2d 245 (2d Cir.1991), but that case did not discuss the issue of jurisdiction. As such, like Alexander and Rosenberg, it provides little support for the majority’s position, particularly in light of the Second Circuit’s later JLM decision.

. Stout v. J.D. Byrider, 228 F.3d 709 (6th Cir.2000), is not relevant to the analysis. The decision does not discuss the jurisdictional issue or even cite to Prima Paint. Moreover, the decision involved free-standing arbitration agreements and is therefore distinguishable from the present case.

. The majority cites Washington Mutual Finance Group, LLC v. Bailey, 364 F.3d 260, 266 (5th Cir.2004), but like the Sixth Circuit’s decision in Stout, the decision concerned an "Alternative Dispute Resolution Agreement” which was executed separately from other contract provisions, unlike here.

. The majority concludes that Brookwood is inapplicable because "[t]he analysis of procedural unconscionability under California law focuses on the manner in which the contract or the disputed clause was presented and negotiated and the disparity in bargaining power, not on whether the party claiming procedural unconscionability should have known of the arbitral provision.” Majority Opinion at 1284. But when the majority later argues that procedural unconscionability may exist even with sophisticated parties, it cites A & M Produce Co. v. FMC Corp., 135 Cal. App.3d 473, 486, 186 Cal.Rptr. 114 (4th Dist. 1982), and states that the California Supreme Court "is among the many courts that 'have begun to recognize that experienced but legally unsophisticated businessmen may be unfairly surprised by unconscionable contract terms.' ” Majority Opinion at 1283. On the one hand, the majority discounts foreknowledge as irrelevant; on the other hand, the majority enlists unfair surprise to support its conclusion regarding unconscionability. And the majority continues to discuss the importance of advance knowledge under California law when it concludes that Nagrampa re*1302ceived "inadequate notice” of the forum selection provision and therefore that the provision must be ignored "on public policy grounds.” Majority Opinion at 1291-1293. It is hard for the majority to say that Brook-wood sheds no light on the case at bar, given the fact that the majority itself accords substantial weight to considerations of advance awareness.

. Nagrampa did not raise this argument in opposing MailCoups' motion to compel; she argued only that the arbitration clause failed to disclose the costs. Nowhere did Nagram-pa contend that the fee-splitting provision imposed unconscionably high costs. She accordingly failed to cite any of the extensive California case law concerning the propriety of fee-splitting arrangements, and the district court had no opportunity to pass upon this issue. Therefore, Nagrampa waived it. See In re Am. West Airlines, Inc., 217 F.3d 1161, 1165 (9th Cir.2000) (“Absent exceptional circumstances, we generally will not consider arguments raised for the first time on appeal, although we have discretion to do so.”). Notwithstanding the foregoing, because Nagram-pa did raise the issue in her appellate opening brief, I will assume that the majority is exercising its discretion to consider the issue.

. For the same reason, I reject the majority's contention that the forum selection clause might "substantially diminish [Nagrampa’s] rights.” Unlike the plaintiffs in America Online, Inc. v. Superior Court, 90 Cal.App.4th 1, 15, 108 Cal.Rptr.2d 699 (Ct.App.2001), who would receive "significantly less consumer protection” under Virginia law when compared to California law, Nagrampa cannot point to any injury she will suffer from arbitrating in Boston, particularly where Mail-Coups conceded at oral argument that it is not contesting the applicability of California law.

. The majority's reliance on Laxmi Investments, LLC v. Golf USA, 193 F.3d 1095 (9th Cir.1999), is curious, particularly with respect to its analysis of the franchise-offering circular. Nagrampa never cited to this circular or argued that the statements in the circular had rendered it impossible for the parties to reach a "meeting of the minds” on venue. Indeed, she did not include the offering circular in her excerpts of record, and every statement made in her briefs concerned the "contract.” Thus, to the extent she ever made any argument regarding the offering circular, she has arguably waived it. Perhaps more importantly, the franchise agreement here states that the "Agreement ... constitutes the entire agreement between MailCoups and Franchisee as to the ... franchise and supersedes all prior negotiations, understandings, representations and agreements, if any.” Thus, any reliance on the circular is foreclosed based on the franchise agreement's integration clause. "Terms set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.” Cal.Civ. Proc.Code§ 1856(a).

Even if the forum selection clause were substantively unconscionable, the appropriate remedy would be for this Court to sever that provision, rather than to invalidate the arbitration clause in its entirety. See Bolter, 87 Cal.App.4th at 910, 104 Cal.Rptr.2d 888 ("the unconscionable provisions can be severed and the rest of the agreement enforced”).

. The arbitration in this case was scheduled to last only two days. The price of a round-trip ticket from San Francisco to Boston on American Airlines is $338.60, assuming Sim-*1306day departure and Wednesday return and sufficient advance notice. See www.mobissimo. com. The La Quinta in Somerville, Massachusetts, approximately seven minutes from the AAA's downtown Boston office, charges $79 per night. See www.lq.com. As Rachael Ray demonstrated, one can eat well in Boston on $40 per day. See $40 a Day: Boston, http:// www.foodnetwork.com/food/show — ad/episo de/0,1976,FOOD_9947_22423,OO.html.