Court holds customer bound by arbitration clause, including ban on class action
The Lexis Nexis Division of Reed Elsevier, Inc., sued Craig Crockett and his lawfirm after a dispute arose between Crockett and Lexis Nexis over fees charged for research outside the firm's subscription. Crockett argued that pursuant to the contract, the firm was to be warned when a research request would generate non-subscription fees. Lexis Nexis insisted that Crockett pay the past charges that were under dispute while Crockett's dispute was arbitrated. Crockett attempted, within the mandatory arbitration, to represent the entire class of similarly-situated customers who were charged fees without warning. Crockett argued that the disputed charges were too small to constitute an economically viable action for any individual customer, but that Lexis Nexis should not be allowed to maintain an illegal practice by means of an unconscionable contract.The Court expressly acknowledged that the Lexis Nexis contract "is indeed as one-sided as Crockett says: the clause favors LexisNexis at every turn and as a practical matter makes it economically unfeasible for...any...customer to assert" a claimed breach of contract. Nevertheless, even though the clause was silent about class actions, the Court held that under recent rulings of the Supreme Court, Crockett could not represent other customers in addition to himself.
Even though the Court found that it was "the purest legal fiction" to suggest that the one-sided contract represented the intent of anyone other than Lexis Nexis, it deemed itself bound by the similar one-sided terms present and approved by the U.S. Supreme Court's conservative majority in American Express Co. v. Italian Colors Restaurant. Since the contract requires Crockett to arbitrate his individual dispute, only, at the location where Lexis Nexis is headquartered, requires him to pay his own fees and costs, win or lose, and requires him to pay one-half the expense of the arbitrator, win or lose, his recourse is limited in that fashion by the contract he signed. It does not matter whether the contract of adhesion (i.e. a contract in standard form which one party will not negotiate) perpetrates a wrong on a party which cannot be redressed.