Brower v. Gateway 2000, Inc.
Supreme Court of New York, Appellate Division
676 N.Y.S.2d 569 (N.Y. Sup. 1998)
Consumers (plaintiffs) who bought computers from Gateway 2000, Inc. (Gateway) (defendant) by mail received a "Standard Terms and Conditions Agreement" providing that keeping the computer past 30 days meant accepting the terms, including a clause requiring any dispute to be arbitrated exclusively through the International Chamber of Commerce (ICC), which charged a $4,000 advance fee (half nonrefundable even if the claimant won), the loser's attorney's fees, and required the claimant to fly to Chicago at his own expense. The consumers sued Gateway in a class action for deceptive sales practices; Gateway moved to dismiss based on the arbitration clause, the trial court granted the motion, and the consumers appealed.
Whether an adhesion arbitration clause is commercially unreasonable, and therefore unenforceable, if it requires potential claimants to pay excessive fees to take part in the arbitration process.