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Question

Paul Stewart and Ellen Chalk bought a wireless LAN PC card, manufactured by Sony, to connect wirelessly to the Internet through service provided by T-Mobile. Stewart and Chalk also signed a one-year service agreement with T-Mobile. The service agreement mandated arbitration and prohibited class action lawsuits. For approximately three weeks after the purchase of the card, Stewart and Chalk were able to insert it into their IBM ThinkPad laptop and connect to the Internet without any difficulty. They then did not attempt to use the card again for a few months, at which time they were unable to insert the card into their ThinkPad. They contacted T-Mobile technical support several times and received refurbished cards on three separate occasions. None of the refurbished cards fit into the ThinkPad. After Stewart and Chalk were unable to insert the third card, staff from T-Mobile technical support informed them that they would have to pursue the issue at the T-Mobile store where they purchased the original card. At the store, a Sony representative attempted to insert the card, but he failed as well. He then promised to contact them about how to solve the problem. They never heard back from him, despite multiple e-mail inquiries.
Ultimately, Stewart and Chalk filed a class action lawsuit against T-Mobile and Sony. The complaint alleged that Sony and T-Mobile knew or should have known that the card "was not compatible and/or did not fit into the IBM ThinkPad laptop" computers and that Sony and T-Mobile allowed customers to purchase cards and enter into long-term service contracts from which consumers would receive no benefit without a compatible card. Sony and T-Mobile filed a motion to compel arbitration. Stewart and Chalk opposed the motion, contending that the arbitration clause was unconscionable and therefore unenforceable. The district court ruled in favor of Sony and T-Mobile. Stewart and Chalk appealed.  

  • Is the arbitration agreement unconscionable? If you were an attorney for Stewart and Chalk, would you argue that the arbitration clause was procedurally unconscionable, substantively unconscionable, or both? Why?
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