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Court Watch

By Charles G. Miller, C. Griffith Towle, and Darryl A. Hart

New California Case Finds Enforcement of Forum Selection Clause in Arbitration Agreement Not Unconscionable

In Smith v. Paul Green School of Rock Music Franchising, LLC, 2008 WL 2037721 (C.D. Cal. May 8, 2008), the United States District Court for the Central District of California determined that although the arbitration clause in question was procedurally unconscionable, it was not substantively unconscionable and so would not block an arbitration commenced by the franchisor in Philadelphia. The court allowed the arbitration to
proceed in the foreign jurisdiction so long as there was a guaranty by
the franchisor that the franchisee's rights under the California Franchise Investment Law ('CFIL') would not be impaired.

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