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Vicksburg Partners9/22/2005
cynski, the Tennessee Supreme Court recognized substantive unconscionability in the context of a contract of adhesion and noted that " courts will not enforce adhesion contracts which are oppressive to the weaker party or which serve to limit the obligations and liability of the stronger party." 919 S.W. 2d at 320 (citing Broemmer v. Abortion Servs. of Phoenix, Ltd., 840 P.2d 1013, 1016 (Ariz. 1992)). The Tennessee Supreme Court cited examples in support of its assertion:
n Beynon v. Garden Grove Medical Group, 100 Cal.App.3d 698, 161 Cal.Rptr. 146, 150 (1980), the court refused to enforce a provision in a group health insurance plan which gave the health care provider the unilateral right to reject an arbitrator's decision without cause and to require another arbitration before a panel of three physicians. The Beynon court noted that the insured was unaware of the provision and the provision was unduly oppressive because the insured was required to pay one-half the costs of both arbitrations. Finally, in Broemmer, the court refused to enforce an arbitration agreement which was contained in a clinic admission form and which required the arbitrators to be physicians specializing in obstetrics and gynecology. Id. at 1016. 919 S.W.2d at 320-21.
. The arbitration clause in today's case is not oppressive. It provides Stephens with a fair process in which to pursue her claims. Moreover, it is typical of arbitration clauses endorsed by the FAA and is conscionable because it bears "some reasonable relationship to the risks and needs of the business." Burdette Gin, 726 So.2d at 1207 (quoting Bank of Indiana, Nat'l Ass'n v. Holyfield, 476 F. Supp. 104, 109 (S.D. Miss. 1979).
. To invalidate the arbitration clause at bar in today's case would be to endorse a blanket policy of striking any arbitration clause contained within the body of a contract of adhesion. While unconscionably oppressive terms can be facially invalid, a per se finding of substantive unconscionability is strictly applicable only to a provision that by its very language significantly alters the legal rights of the parties involved and severely abridges the damages which they may obtain. In East Ford, we made a clear distinction between terms contained within contracts of adhesion which are invalid on their face and those which are not:
While Burdette concluded that an indemnity clause within a contract of adhesion is presumptively unconscionable, the same is not true for arbitration clauses. Burdette involved an agreement to indemnify, which essentially allows a party to contract away or escape liability. Arbitration agreements merely submit the question of liability to another forum-generally speaking, they do not waive liability. Furthermore, Congress has expressed no federal interest in enforcing indemnification agreements as it has in guaranteeing the enforcement of valid arbitration agreements. See Federal Arbitration Act, 9 U.S.C. ยงยง 1 et seq. 826 So.2d at 716.
. Without doubt, the arbitration provision contained in the body of the parties' admissions agreement is enforceable. It merely provides for a mutually agreed-upon forum for the parties to litigate their claims and is benign in its effect on the parties' ability to pursue potential actions.
IV. WHETHER THE LIMITED LIABILITY AND PUNITIVE DAMAGES CLAUSES IN THE ADMISSIONS AGREEMENT ARE SUBSTANTIVELY UNCONSCIONABLE.
We now turn our attention to the limitation of liability and punitive damages provisions to determine whether they, by their very language, are substantively unconscionable and therefore unenforceable. Our concerns with the arbitration clause in the second admissions agreement is with language t
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