RAMIREZ, P. J.
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:
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.
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:
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:
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 asked the representative about this, she said they "might apply." He was able to access and print the Supplementary Procedures.
The Commercial Rules provided:
The Commercial Rules also provided:
Finally, the Commercial Rules provided:
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.
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].
Defendants filed a petition to compel arbitration. In her opposition, Eakins argued that the arbitration agreement was unconscionable because:
In their reply, defendants argued that:
After hearing argument, the trial court denied the petition. It found that the arbitration agreement was unconscionable. It explained:
Defendants contend that the arbitration provisions delegated the issue of unconscionability to the arbitrator.
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,
We disagree, for the following reasons, as stated in Ajamian v. CantorCO2e, L.P., supra, 203 Cal.App.4th at p. 788:
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 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.
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]." (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.)
"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 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.]"].)
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 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.
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 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.
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.
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.
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.
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.] . . . [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.)
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 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,
We therefore conclude that the arbitration provisions themselves were not substantively unconscionable.
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].)
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.
HOLLENHORST, J. and MILLER, J., concurs.