An Illinois appellate court determined that a television service provider’s arbitration agreement was neither procedurally nor substantively unconscionable. The Court held that because of a provision requiring the service provider to pay arbitration fees in excess of $125, there was no merit to the claim that arbitration would be cost-prohibitive.

In Bess v. DirecTV, Inc., No. 5-05-0394, 2008 WL 740344 (Ill. App. Ct. Mar. 18, 2008), Bess entered into a customer agreement with DirecTV for satellite television service. The agreement provided for arbitration all disputes.

Bess brought suit against DirecTV, alleging that DirecTV’s billing practices constituted unjust enrichment in violation of Illinois consumer protection laws. In response, DirecTV filed a motion to compel arbitration pursuant to the agreement. The lower court denied the motion on the basis that the arbitration agreement was procedurally and substantively unconscionable.

On appeal, DirecTV argued that the lower court erred in its analysis of procedural unconscionability. The lower court found that the arbitration agreement was procedurally unconscionable because the underlying contract was a contract of adhesion and the arbitration agreement was inconspicuous. In rejecting this finding, the Court explained that consumers routinely sign such agreements – for example, to obtain credit cards or rental cars – and that it would be unreasonable to conclude that all such contracts are procedurally unconscionable and thus unenforceable.

The Court acknowledged that there were circumstances – such as DirecTV’s failure to inform Bess of the arbitration agreement prior to or at the time she purchased the satellite service – that indicated some degree of procedural unconscionability. Nonetheless, the Court concluded that the degree of procedural unconscionability of the arbitration agreement was insufficient to render it unenforceable on that basis.

The Court also determined that the lower court erred in concluding that the arbitration agreement was substantively unconscionable. The Court reviewed the record to ascertain whether Bess presented sufficient evidence to show that her share of the expenses of arbitration would be cost-prohibitive.

In reviewing that evidence, the Court concluded that Bess did not meet her burden. The record contained no information regarding Bess’s financial position. Moreover, the plain language of the arbitration agreement made it clear that DirecTV would pay all fees and deposits in excess of $125. The Court found nothing in Bess’s submissions to indicate that Bess would be responsible for any other costs of the arbitration.

Having determined that arbitration would not be cost-prohibitive, the Court held that the lower court erred in its finding of substantive unconscionability. Accordingly, the Court remanded the case with instructions to enter an order compelling arbitration.