Paul Bland has a compelling post on the Second Circuit’s recent decision in Duran v. The J. Hass Group, in which the court enforced an arbitration agreement requiring a consumer from New York, who alleged she was defrauded of almost $4000, to arbitrate in New Mexico.

Paul’s summary:

This strategy worked pretty well for the defendants in this case.  The Second Circuit required Ms. Duran to arbitrate her claim, and enforced the provision requiring it to take place in Arizona.  They noted that there is a “logical flaw” and an “unusual” quality to the result, because if Ms. Duran’s only remedy is to argue to the arbitrator that it’s unfair and unconscionable to require her to arbitrate in Arizona, she first has to GO to Arizona to do it.  Oh well, the Court explains, this is what the Supreme Court would have wanted.

I think the decision is wrong, and that the better arguments are with the plaintiffs, and I’m very hopeful that a lot of other courts wouldn’t go with this conclusion.

But the case does show how the U.S. Supreme Court’s ongoing adventures in re-writing and expanding the Federal Arbitration Act have a cost.  What will the next scam artist put in their arbitration clause?  Is there any reason that the Second Circuit would not have enforced a clause requiring the arbitration to take place in New Zealand on Leap Day?  After all, why couldn’t the New Zealand arbitrator figure out if that’s fair?  What if the arbitration clause required that the arbitration take place on the newly non-planet Pluto?