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Man With Faulty Eyesight Not Bound by MoneyGram’s Arbitration Proviso—C.A.
Opinion Says Use of Six-Point Type Is Factor to Be Taken Into Account
By a MetNews Staff Writer
The First District Court of Appeal, in an opinion certified for publication yesterday, declared that a 63-year-old man with poor eyesight is not bound by an arbitration agreement printed in six-point type on the back of MoneyGram forms, affirming a denial of a petition by the money-transferring company to compel arbitration.
Blaming MoneyGram International for being hoodwinked into sending funds to a company that operates a scam on the theory that it owes a duty to protect customers from fraud, Jonathan Fisher brought an action in Alameda Superior Court. Judge Winifred Y. Smith declared the arbitration agreement to be procedurally and substantively unenforceable.
“We conclude the arbitration provision is unconscionable largely because it was hidden on the back side of a money transfer order form, in tiny 6-point print that we deem virtually illegible,” Acing Presiding Justice Jon B. Streeter of Div. Four said in an opinion affirming Smith’s decision, originally filed June 29 and not certified for publication.
The language appears below, in six-point type:
ARBITRATION. UNLESS OTHERWISE SPECIFIED BY APPLICABLE LAW, ANY CONTROVERSY OR CLAIM ARISING OUT OF OR RELATING TO THE TRANSFER, THE AGREEMENT OR BREACH OF THIS AGREEMENT, INCLUDING STATUTORY CONSUMER CLAIMS, SHALL BE SETTLED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) UNDER ITS COMMERCIAL ARBITRATION RULES. JUDGMENT ON THE ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. ANY SUCH ARBITRATION SHALL BE INITIATED AND HELD IN THE OFFICE OF THE AAA CLOSEST TO THE AGENT LOCATION WHERE YOU INITIATED THE TRANSFER. EACH PARTY SHALL BEAR ITS OWN COSTS AND FEES FOR EXPERTS AND ATTORNEYS, AND NO PARTY SHALL HAVE A RIGHT TO PARTICIPATE AS A MEMBER OF ANY CLASS OF CLAIMANTS. THIS EXCLUSIVE ARBITRATION REMEDY SHALL NOT BE AVAILABLE UNLESS INITIATED WITHIN ONE YEAR AFTER THE CONTROVERSY OR CLAIM AROSE.
The type size was “exceedingly small,” Streeter said, but specified that the opinion was creating no “across-the-board rule” as to the permissibility of notices in six-point type. He did not specify how much weight should be accorded Fisher’s bad eyesight.
“[B]ut we do observe in this case that 6-point typeface is extremely difficult to read and contributes significantly to the surprise element we find here,” he said.
Federal Cases
MoneyGram pointed to federal cases that say that an arbitration provision will not be rendered unenforceable because it is in a small type size if the size is the same as other language in the document. Streeter wrote:
“We cannot agree with such reasoning, for surely the size of the typeface has much to do with how legible the document is and therefore how ‘surprised’ the consumer might be to learn what it says. When the entire agreement is printed on the back side of the Send Form in a size too small to read without a magnifying glass, the idea that the size of the other terms justifies the size of the Arbitration Provision must be rejected. Deliberately choosing a tiny, difficult to read typeface must have some bearing on whether the party with superior bargaining power has taken unfair advantage of its contracting counterpart. As Judge Smith found, the font size is a ‘significant factor’ in the unconscionability determination.”
The jurist pointed to statutes that require a particular type size larger than six points for certain documents, and reasoned:
“The foregoing statutes suggest not only that 6-point type is too small for most people to notice or read, but that the inclusion of an arbitration agreement in a noncommercial contract of adhesion is something that ought to be highlighted in readable print, bold font, and even red color if necessary to make it visible. Whether or not such minimum requirements are enforceable…, they establish certain legibility norms that MoneyGram ignored.
(Most statutorily prescribed legal notices published in newspapers are in six-point type. This article is in 10-point type.)
‘Weighs Heavily’
“Tiny font size alone weighs heavily in making MoneyGram’s Arbitration Provision procedurally unconscionable,” Streeter said.
That the arbitration provision was on the back of the MoneyGram forms is also a factor pointing t unconscionability, he noted.
Streeter also agreed with Smith that the provisions were substantively unconscionable in that the contract “reduces the length of the statute of limitations, invokes the application of the arbitrators’ higher commercial fees, and requires consumers to bear their own costs and fees for experts and attorneys.”
The case is Fisher v. Moneygram International, Inc., A158168.
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