[Reprinted from the Sports Litigation Alert newsletter, of which the author is a Senior Contributing Writer.]
Q. When is a contract not a contract?
A. When it violates public policy.
First-year law students learn that courts will void an otherwise enforceable contract if the terms of the contract violate public policy. A basic example of a substantively unconscionable contract is a fitness center agreement in which the patron waives the right to sue the gym for personal injuries, regardless of whether the facility’s conduct was negligent or intentional.
Cases of procedural, as opposed to substantive, unconscionability are harder to find. But our nation’s pastime has provided us with one such case, Zuniga v. Major League Baseball, 2021 Ill. App. LEXIS 111 (App. Ct. of Illinois, No. 1-20-1264, March 16, 2021).
THE FACTS
Laiah Zuniga’s father gave her a ticket to the Mets-Cubs game at Wrigley Field on August 27, 2018. Zuniga was struck by a foul ball while eating a sandwich she bought at the game and suffered serious head injuries requiring hospitalization and subsequent rest at home. She missed two weeks of work and did not read or engage in any eye-straining activity pursuant to her doctor’s orders.
Zuniga filed a complaint in state court against Major League Baseball (MLB) and the Cubs for negligence. The defendants moved for an order compelling binding arbitration per the terms and conditions of the ticket. The trial court denied the motion and the defendants filed an interlocutory appeal.
The appeals court noted that the back of the ticket consisted of an ad and six lines of fine print, reading in part: “By using this ticket, ticket holder (‘Holder’) agrees to the terms and conditions available at www.cubs.com/ticketback (the ‘Agreement’), also available at the Chicago Cubs administrative office.” The fine print also warned spectators to be alert for baseballs being hit into the stands and that any disputes that may arise “shall be resolved by binding arbitration…”
It was undisputed that the plaintiff did not read the fine print or go to the website and that the website contained a comprehensive eight-paragraph mandatory arbitration agreement. Buried in the sixth paragraph was a sentence permitting the holder to opt-out of the Agreement within seven days after the event.
Zuniga argued at the trial level that the Agreement was unconscionable because the terms were set forth on the ticket in tiny type that did nothing to highlight the arbitration provision or the need to visit a separate website to ascertain the full terms and conditions being agreed to. The trial court ruled that the arbitration provision was procedurally unconscionable on this basis and denied the defendants’ motion to compel arbitration.
PROCEDURAL VS. SUBSTANTIVE UNCONSCIONABILITY
The appellate court considered substantive unconscionability as well as procedural unconscionability. The court stated that the former is found where contract terms are “inordinately one-sided” and the latter is where contract terms are difficult to find, read, or understand. The court added that procedural unconscionability “consists of some impropriety during the process of forming the contract depriving a party of a meaningful choice.”
The court observed that the Illinois Supreme Court applied procedural unconscionability to invalidate a term in a car warranty where the warranty was printed in the car owner’s manual inside the glovebox and unavailable to the owner until after she purchased the car. But the doctrine did not apply in another case where a cellular phone service customer acknowledged in writing that she had read a written service agreement containing an arbitration clause in fine print on the back of the document.
THE APPELLATE DECISION
The Cubs and MLB argued that the terms of the arbitration clause set forth on the ticket were simple and conspicuous. The appellate court rejected the argument and affirmed the trial judge’s decision. The principal reasoning was that the paper ticket only contained a summary of the terms and conditions of the Agreement and not the full provisions.
The court also reasoned that:
- A ticket holder is unlikely to access the full agreement on the internet or review it at the team’s offices while attending a game;
- Nothing on the ticket tells the holder that he/she is giving up important legal rights; and,
- The summary pertaining to arbitration is not emphasized in any way and it uses dense legal language.
The court distinguished the circumstances under which the Agreement was created – holding a ticket to be scanned at the gate – from an internet transaction in which the consumer can read all the terms and must click on an electronic button to assent. Here, the court stated, there was “more of an effort to impose the onerous terms of one’s carefully drawn printed document on an unsuspecting contractual partner.”
THE COURT GOES THE EXTRA MILE
The court could have ended its opinion with this finding, but it proceeded to find that the Agreement was also substantially unconscionable. It found that the opt-out period of seven days was not reasonable given that the plaintiff was unable to read or engage in eye-straining activity for at least seven days. In addition, the Cubs required the plaintiff to provide an account number in the opt-out request and Zuniga had no account number with the club.
“These additional factors support our holding that the arbitration provision at issue is unenforceable,” the court concluded. “[A] contract term can be invalidated on the basis of procedural unconscionability, substantive unconscionability, or a combination of both.”
You might say the Cubs, as is often the case, hit into a double play.