Kuehn v. Citibank

U.S. DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Alternative Dispute Resolution

New York Law Journal

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Judge Denise Cote

Kuehn electronically consolidated prior private student loans with Citibank. His online application and accompanying promissory note, constituting his loan agreement, included an arbitration agreement that delegated questions about enforceability of the arbitration agreement to an arbitrator. Kuehn sued Citibank for breaches of contract and New York General Business Law §§349 and 350. He opposed Citibank's motion under the Federal Arbitration Act to compel arbitration, arguing the arbitration agreement was unconscionable and unenforceable. The court granted Citibank's motion to compel arbitration, finding that Kuehn had failed to show the agreement's delegation provision procedurally and subjectively unconscionable under governing Nevada law as set out in Gonski v. Second Judicial Dist. Court of State ex rel. Washoe. Like the plaintiff in Rent-A-Center West v. Jackson, Kuehn directed his unconscionability arguments to the arbitration agreement as a whole, and not its antecedent delegation agreement. Among other things, the court found that Kuehn failed to show that he was likely to incur prohibitive costs by arbitrating the question of the arbitration agreement's enforceability.

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