A Missouri federal district court determined that an unauthorized practice of law claim was arbitrable despite a consumer’s objections that Missouri courts were the sole authority empowered to determine whether conduct constitutes unauthorized practice of law.

In Guiterrez v. State Line Nissan, Inc., No. 08-0285-CV-W-FJG, 2008 WL 3155896 (W.D. Mo. Aug. 4, 2008), Guiterrez sued State Line Nissan (Nissan) for charging a document preparation fee in relation to the purchase of her vehicle. Guiterrez alleged the fee constituted the unauthorized practice of law. Guiterrez also sought to represent a class of individuals similarly situated.

Nissan filed a motion to compel arbitration. In considering the motion, the Court noted that the central purpose of the Federal Arbitration Act (FAA) is to ensure the enforceability of private agreements to arbitrate.

Guiterrez and Nissan’s agreement to arbitrate stated that either party could elect to have any dispute resolved by arbitration. The agreement also precluded class-wide arbitration.

In opposing the motion to compel, Guiterrez argued that because the claim alleged a violation of Missouri’s unauthorized practice of law statute, arbitration was not the proper forum to settle the claim. The Court rejected Guiterrez’s contention that Missouri courts have exclusive authority to determine whether conduct constitutes the unauthorized practice of law.

The Court stated that it is the arbitrator’s duty to apply the law, regardless of the source. Further, Missouri law does not preclude an arbitrator from applying Missouri law to determine if a party’s conduct constitutes the unauthorized practice of law.

Guiterrez also argued that the arbitration agreement was procedurally and substantively unconscionable because of the class waiver. The Court noted that the inclusion of a class waiver, standing alone, is not sufficient to render the entire agreement unconscionable. Accordingly, the Court granted Nissan’s motion to compel arbitration.