In a 2005 article published in The Montana Lawyer, James M. Gaitis wrote that “it would appear that the [Montana Supreme] [C]ourt is on the brink of creating a narrowly crafted common law unconscionability/adhesion doctrine that applies solely to arbitration provisions.” That appears to be what the Montana Supreme Court at least in part may have done in Kelker v. Geneva-Roth Ventures, 303 P.3d 777 (Mont. 2013), when it ruled that on online arbitration agreement regarding a “payday” loan was unconscionable and unenforceable according to the cert petition. In an effort to avoid a challenge under the grounds established in Concepcion and other U.S. Supreme Court cases, the Montana Supreme Court did provide an elaborate analysis purporting to show that it was applying the same unconscionabiliity analysis to the arbitration clause as the court would apply in any contractual context. But the court quite possibly went to far both when it also emphasized that the online arbitration agreement did not set apart the arbitration agreement through the use of bold print or otherwise. A legislative requirement that that be done provided one of several reasons for the U.S. Supreme Court’s reversal of both of the Montana Supreme Court’s prior opinions in the Casarroto cases. The Montana Supreme Court’s decision also strains to find that the arbitration agreement was ambiguous even though the agreement seems to be fairly boilerplate.

The Montana Kelker decision was accompanied by a three-justice dissent (there are seven Supreme Court justices in Montana, and no courts of appeal). So, while Gaitis’s 2005 observation might remain true, it should be acknowledged that the Montana Supreme Court has been sensitized to FAA preemption issues to some degree.

The Chamber of Commerce has filed an amicus brief in support of the cert petition and the Respondents have been granted two extensions and have yet to file their opposition to the petition. Predicting what the U.S. Supreme Court will do in these consumer arbitration cases has become a difficult task, but I will venture to guess that the Court will summarily reverse the Montana decision and possibly do so in admonishing terms, just as it did in its second Casarotto decision.

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