Florida Appellate Court Rejects “Sliding Scale” Approach to Arbitral Fairness

If an arbitration agreement is not procedurally unconscionable, no degree of substantive unconscionability will render the agreement unenforceable, according to the Florida Second District Court of Appeal.

In Bland ex rel. Coker v. Health Care & Retirement Corp. of America, 927 So. 2d 252 (Fla. Dist. Ct. App. 2006), Coker admitted Bland, her mother, to a nursing home run by Health Care and Retirement (“HCR”). Four days later, Coker signed an arbitration and limitation of liability agreement (“the Agreement”) on her mother’s behalf. The Agreement limited HCR’s liability by capping non-economic damages at $250,000 and disallowing punitive damages.

Despite the Agreement’s provision for mandatory arbitration, Bland sued HCR for an alleged violation of the Nursing Home Residents’ Rights Act. The trial court granted HCR’s motion to compel arbitration, and on appeal, Bland argued that the Agreement was unenforceable because it was procedurally and substantively unconscionable.

The Court rejected the view that the Agreement was procedurally unconscionable because the totality of the circumstances established that Coker “had a meaningful opportunity to review the Agreement and to accept or reject its terms before she signed it.”

The Court also rejected the holding in Romano v. Manor Care, Inc., 861 So. 2d 59 (Fla. Dist. Ct. App. 2003), review denied, 874 So. 2d 1192 (Fla. 2004), which involved a similar fact pattern. In Romano, the Florida Fourth District Court of Appeal employed a “sliding scale” approach in holding that the nursing home’s arbitration agreement was unconscionable.

In addressing Bland’s contention that the Agreement’s remedial limitations violated public policy, the Court could “see no reason why the arbitrator, in the first instance, cannot decide whether to enforce the remedial limitations.” Nevertheless, the Court offered an advisory opinion by describing the argument opposing enforcement as “facile” and the argument favoring enforcement as “compelling.”