Pandolfi v. AviaGames, Inc.

Two customers of AviaGames (Avia), an online gaming company, filed a lawsuit alleging that Avia had violated California’s consumer-protection laws by charging customers to participate in rigged competitions. Invoking an arbitration provision in its Terms of Service, Avia moved to compel arbitration of the plaintiffs’ claims. Among other things, that provision stated that, when more than twenty-five customers filed similar claims, the cases would be arbitrated in twenty-case batches, with no case allowed to proceed until every case in the prior batch had been resolved.

The district court denied Avia’s motion, holding that the arbitration provision was unenforceable because it contained terms that were substantively unconscionable under California law. Avia then appealed.

Public Citizen filed an amicus brief in support of the district court’s judgment. The brief explains that the district court correctly held that the arbitration provision is unconscionable because it imposes a procedural mechanism designed to delay resolution of consumer claims. In particular, the batching requirement creates substantial delay and undermines the efficiency that bilateral arbitration is claimed to promote.