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Civil Litigation No. 14-02-00496-CV, 4/17/2003. Click here for the full text of this decision FACTS: In these consolidated actions, AutoNation seeks mandamus relief from the trial court’s denial of a motion to compel arbitration, and appeals the trial court’s order certifying a class. HOLDING: Petition for a Writ of Mandamus conditionally granted; appeal reversed and remanded. Leroy argues that, even if the court determines that the arbitration clause applies to this dispute, it should not be enforced because it is unconscionable. The FAA declares written provisions for arbitration “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” The doctrine of unconscionability can be applied to arbitration provisions in the same manner as it applies to other contracts. The burden is on the party seeking to avoid the arbitration provision. The basic test for unconscionability is whether, given the parties’ general commercial background and the commercial needs of the particular trade or case, the clause involved is so one-sided that it is unconscionable under the circumstances existing when the parties made the contract. Its purpose is not to disturb the allocation of risks because of superior bargaining power, but to prevent oppression and unfair surprise. Unconscionability includes two aspects: 1. procedural unconscionability, which refers to the circumstances surrounding the adoption of the arbitration provision; and 2. substantive unconscionability, which refers to the fairness of the arbitration provision itself. Courts may consider procedural and substantive unconscionability of an arbitration clause in evaluating the validity of an arbitration provision. Here, Leroy asserts that the arbitration provision is procedurally unconscionable because it is not conspicuous, and that it is substantively unconscionable because denial of the class action here is fundamentally unfair and violates public policy. Leroy argues that the arbitration provision is procedurally unconscionable because it is not conspicuous. Leroy contends that AutoNation failed to make consumers aware of the provision, and the provision is so “well-hidden” that its own lawyers did not discover it for two years. Leroy notes that the arbitration provision is placed in the middle of several provisions and “lacks a single characteristic to notify someone of its contents.” In support of this contention, Leroy directs the court to Goodwin, 924 S.W.2d at 944, in which the Texas Supreme Court rejected an argument that an arbitration provision was not conspicuous when the provision was conspicuously displayed. Leroy also cites Texas Business and Commerce Code �1.201(10) for the general definition of “conspicuous.” However, Leroy cites no authority holding that an arbitration provision governed by the FAA must meet a conspicuousness requirement. The court does not find Leroy’s authority persuasive. Texas law invalidates only certain types of clauses if they are inconspicuous. An agreement governed by the FAA may be set aside for state contractual defenses that apply to all contracts generally, but not for defenses that apply only to arbitration contracts or clauses. Thus, even if Texas law imposed a specific conspicuousness requirement that might otherwise be applicable to this arbitration provision, such a law would likely be pre-empted by the FAA. In any event, the court finds that the provision here was not so “well-hidden” as Leroy contends, but was sufficiently obvious to give Leroy notice that claims against AutoNation would be resolved through arbitration. The Purchase Agreement consists of a single page, front and back. On the front, directly above the customer signature line, the following paragraph appears: “By executing this Purchase Agreement, Purchaser acknowledges that (1) Purchaser has been advised that the motor vehicle purchased hereunder is a used motor vehicle, (2) Purchaser has been provided a copy of the Purchase Agreement and has read and understands the Terms and Conditions set forth herein (including the Additional Terms and Conditions set forth on the reverse side hereof), and (3) Purchaser has agreed to purchase the motor vehicle described herein on the terms and conditions set forth herein and accepts such terms and conditions as a part of the Purchase Agreement.“ Additional language on the front page provides that “Purchaser is encouraged to review this Purchase Agreement (including the Additional Terms and Conditions set forth on the reverse side hereof) carefully and seek individual professional advice if Purchaser has any questions concerning this transaction.” On the back of the document, the additional terms and conditions, including the arbitration provision, are separately numbered and set out in uniform type. The court does not find this contract’s arbitration provision so inconspicuous that it is unconscionable. OPINION: Fowler, J; Brister, CJ, Hudson and Fowler, JJ.

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