Arbitration & Mediation

PA Court Orders Lanham Act/False Advertising Claim to Arbitration

By Christopher B. Hopkins, Esq.

We travel north of the Mason-Dixon Line to Pennsylvania for this dispute over a credit resolution company's arbitration clause in their consumer debt settlement contract with the plaintiff in Ned J. Oyler v. Financial Independence and Resource Education (FIRE). The Plaintiff claimed that his false advertising claim was not contemplated by the arbitration provision and that the choice-of-law and arbitration clauses were unconscionable. No such luck.

We cite to this case since FIRE is a Florida business and the choice of law provision required arbitration to occur in Palm Beach County. Moreover, the court used Florida law.

The Order enforces the choice of law provision in a footnote, claiming the chosen state has a substantial relationship to at least one party and there is a reasonable basis for Palm Beach County. Applying Florida law, the court considered procedural unconscionability and found that it was an adhesion contract however the Plaintiff initialed the arbitration clause and "engaged FIRE's salesperson in a dialogue about any contractual terms that he did not readily understand." The court cited Bland v. Healthcare for the principle that a plaintiff's "limited education and apparent failure to consider carefully [the terms]" was insufficient to avoid arbitration. Likewise, the arbitration clause was in normal font at the front of the contract.

To our knowledge, there is little arbitration precedent in Florida regarding the arbitrability of a Lanham Act claim for false advertising. Citing federal law largely heralding from the courts in the Commonwealth of Pennsylvania, the court noted that Lanham Act claims have been deemed arbitrable.

Full post as published by Florida Arbitration Law on February 27, 2008 (boomark / email).