eNotes: Liability – March 2023 – Washington, D.C.

SIGNIFICANT CASE SUMMARIES

Washington, D.C. Case Summary

Doucette v. Neutron Holdings
District Of Colombia Court Of Appeals
No. 21-CV-896

Decided: January 26, 2023

Whether parts of a contract unrelated to the arbitration clause are unconscionable is a question that can be decided by the arbitrator at arbitration.

Background

Adoria Doucette sued Neutron Holdings, Inc., a business that operates rental scooters under the name Lime, alleging that she was injured in a scooter accident as a result of Lime’s negligence. The Complaint alleged that Ms. Doucette rented one of Lime’s electric scooters, the scooter’s brakes failed, Ms. Doucette collided with a person riding a bicycle, and Ms. Doucette fractured her leg and suffered other injuries. The Complaint further alleged that the collision was caused by Lime’s negligence. Lime filed a Motion to compel arbitration, relying on an arbitration agreement that Ms. Doucette accepted when she rented the scooter. Ms. Doucette opposed the Motion, arguing that the arbitration agreement was unconscionable.

The Trial Court ruled that the arbitration agreement was not unconscionable, reasoning that the arbitration agreement bound both parties, the arbitration would be conducted by a neutral party, and the costs of arbitration would depend on the outcome of the arbitration. The Trial Court therefore stayed Ms. Doucette’s suit and granted the Motion to compel arbitration. Ms. Doucette appealed, arguing that the arbitration agreement was a contract of adhesion, and that other terms in the contract were so unreasonable as to render the contract unenforceable.

Holding

The District of Colombia Court of Appeals found that the arbitration agreement was valid, reasoning that adhesion contracts were not per se unconscionable. The Court further stated whether parts of the contract not related to the agreement to arbitrate are unconscionable is a question that can be decided by the arbitrator pursuant to the parties’ enforceable agreement to arbitrate.

Questions about this case can be directed to Nicholas Schaufelberger at (202) 945-9502 or nschaufelberger@tthlaw.com.