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Federal Judge Denies Vonage’s Arbitration Clause due to Contract’s ?Unconscionable’ Terms

Monday, February, 10, 2014


 

Despite a clear arbitration clause in their standard terms of service that all customers agree to, a Federal Judge in the U.S. State of California has denied Vonage’s motion to compel arbitration in a class action lawsuit filed by former customers.  U.S. District Judge Christina A. Snyder denied the motion in part due to the ?unconscionable’ terms outlined in the Internet communications company’s contract language.

 

The lawsuit stems from a “County 911 Fee” that Vonage charged customers that was not actually required by or collected by local governments.  911 is the emergency phone number in the United States.

 

Judge Snyder characterized Vonage’s terms of service as oppressive under California’s laws because of its “take it or leave it” nature requiring that customers accept all clauses in their entirety or forgo Vonage’s services.  Once the contract is designated as oppressive under California law, the arbitration clause no longer carries any authority, and the case can proceed to court.  Judge Snyder also noted that the arbitration clause as written allows Vonage full control over the venue and forum of the arbitration, leaving customers no control over the process.