Abadi v. Nat'l R.R. Passenger Corp.

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AARON ABADI, Plaintiff, v. NATIONAL RAILROAD PASSENGER CORPORATION, Defendant.

No. 1:22-cv-03684 (TNM)

United States District Court, District of Columbia

October 7, 2024

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

Plaintiff Aaron Abadi sued Amtrak for violating various state and federal laws after one of its employees scolded him for refusing to comply with its COVID facemask policy. Amtrak moved to compel arbitration. Because Abadi raised genuine issues of material fact on whether Amtrak's Arbitration Agreement is unconscionable, the Court held Amtrak's motion to compel in abeyance pending an evidentiary hearing. The Court recently held that hearing. And based on the evidence presented, the Court finds that Amtrak's Agreement is not unconscionable. So the Court will grant Amtrak's motion.

I.

The Court detailed the factual background of this case in its previous Memorandum Order. See Abadi v. Nat'l R.R Passenger Corp., No. 1:22-cv-03684 (TNM), 2024 WL 1344403 (D.D.C. Mar. 29, 2024). So a summary will suffice here.

In January 2021, Abadi boarded an Amtrak train in Philadelphia bound for New York City. Am. Compl. ¶ 43, ECF No. 15. At the time, Amtrak required all passengers to “wear a face mask . . . while onboard and in stations unless actively eating or drinking.” Decl. of Sunil D. Tewari (Tewari Decl.), ECF No. 18-2. But Abadi could not wear a mask because he has a “sensory processing disorder” that prevents him from wearing “[a]nything around the face or head.” Am. Compl. ¶¶ 28-35. When an Amtrak employee told Abadi to mask up, he refused. Id. ¶ 44. The employee then “yelled” at Abadi telling him he could not ride the train without a mask. See id. ¶¶ 44-45.

Abadi sued Amtrak, raising disability discrimination and civil rights claims under federal, state, and D.C. law. See generally Compl. ¶¶ 48-153, ECF No. 1. Amtrak asked Abadi whether he consented to arbitration; Abadi refused. See Mot. Compel, ECF No. 18, Ex. B, ECF No. 18-3. Then Abadi filed an amended complaint, again raising disability discrimination and civil rights claims. See generally Am. Compl. ¶¶ 70-175. In response, Amtrak moved to compel arbitration because Abadi affirmatively accepted Amtrak's Terms and Conditions, which included its Arbitration Agreement. Mot. to Compel. at 1-2.

Early this year, the Court issued a Memorandum Order concluding that the Arbitration Agreement bound Abadi, even though a friend had bought his ticket on his behalf. Abadi, 2024 WL 1344403, at *3. But the Court also found that Abadi raised two genuine issues of material fact as to whether the Arbitration Agreement is unconscionable. Id. at *4-5.

So the Court held an evidentiary hearing in July to address the “relatively limited issue of unconscionability.” Evidentiary Hr'g Tr. (Hr'g Tr.) at 2:15. The parties presented evidence and testimony on two issues: (1) whether Abadi had a meaningful choice in modes of transportation that did not require him to sign an arbitration agreement; and (2) whether the $225 arbitration fee would preclude Abadi from pursuing his case.

II.

Like any contract, arbitration agreements “may be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability.” Rent-A-C enter, W., Inc. v. Jackson, 561 U.S. 63, 68 (2010) (cleaned up). Contract-based challenges like unconscionability are governed by state law. See Fox v. Comput. World Servs. Corp., 920 F.Supp.2d 90, 97 (D.D.C. 2013).

“Under [District of Columbia] law, a court can void a contract on the grounds that it is unconscionable if the party seeking to avoid the contract proves that the contract was both procedurally and substantively unconscionable.” Song fi, Inc. v. Google Inc., 72 F.Supp.3d 53, 62 (D.D.C. 2014). A contract is procedurally unconscionable if there is “an absence of meaningful choice on the part of one of the parties.” Simon v. Smith, 273 A.3d 321, 331 (D.C. 2022). And it is substantively unconscionable if the terms are “unreasonably favorable to the other party.” Id. In all but the most “egregious situation[s],” a party must prove both elements to void a contract. Doucette v. Neutron Holdings, Inc., 288 A.3d 339, 342 (D.C. 2023).

The District's “unconscionability standard calls for a strongly fact-dependent inquiry.” Keeton v. Wells Fargo Corp., 987 A.2d 1118, 1121 (D.C. 2010). So when parties dispute material facts that go to unconscionability, the Court must conduct a jury trial on arbitrability or an evidentiary hearing if no jury is demanded. See 9 U.S.C. § 4 (“If no jury trial be demanded by the party alleged to be in default . . . the court shall hear and determine [arbitrability].”). Neither party requested a jury trial here. Scheduling Conf. Tr., May 17, 2024, at 3-8 (showing Abadi requesting an evidentiary hearing after the Court suggested the possibility of a trial). Now that the Court has conducted an evidentiary hearing, it concludes that Abadi has not proved either procedural or substantive unconscionability. So it will grant Amtrak's Motion to Compel Arbitration.

A.

Start with procedural unconscionability. In its Memorandum Order, the Court narrowed the issue to whether Abadi had a “meaningful choice in transportation options that did not require him to sign an arbitration agreement.” Abadi, 2024 WL 1344403, at *4.

The Court evaluates whether Abadi had a “meaningful choice” by “consider[ing] all the circumstances surrounding the transaction.” Samenow v. Citicorp Credit Servs., Inc., 253 F.Supp.3d 197, 205 (D.D.C. 2017). For starters, Amtrak's Arbitration Agreement was a “contract of adhesion,” meaning that it was “presented in boiler-plate form on a take-it or leave-it basis.” Id. But this fact alone “does not render the signatory without meaningful choice, and the contract thereby procedurally unconscionable.” Id. Rather, there “must be something more: a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation and that the services could not be obtained elsewhere.... Absent this last condition, the party retains the ‘real choice' to simply go deal with someone else.” Ruiz v. Millennium Square Residential Ass'n, 156 F.Supp.3d 176, 181 (D.D.C. 2016) (cleaned up).

Abadi argues that he lacks any meaningful choice because Amtrak has “almost a complete monopoly” on rail travel in the United States. Pl.'s Resp. to Def.'s Mot. to Compel (Pl.'s Resp) at 6, ECF No. 14. And Abadi explained that he finds rail travel far more attractive than the alternatives. Abadi claims bus trips are “disasters,” Hr'g Tr. at 3120, that leave him “shaking from all that traveling,” id. at 31:20-21. And “airplanes are just difficult,” he says. Id. at 36:24. In contrast, Abadi finds train travel less expensive than travel by car, see, e.g., id. at 7:2-25, and more comfortable than travel by bus or air, see id. at 31:23-25; 36:13-37:1.

But the fact that Abadi favors rail travel does not leave him without “meaningful choice.” Abadi's own conduct proves as much. He testified that he has “not been using Amtrak” since the January 2021 incident, id. at 28:5-6, and that he traveled “back and forth between Philadelphia and New York City back in 2021,” id. at 26:10-11, “likely once a week [or t]hree times a month, maybe,” id. at 26:10-11, “[u]sually by car,” id. at 28:9. Abadi confirmed that he has a personal vehicle and uses “it to travel between points” like Philadelphia and New York. See id. at 28:1619; 36:4-6. The Court does not credit Abadi's claim-based on selective samples of Amtrak ticket purchases-that a car is generally more costly. See Hr'g Tr. at 7:8-21. But it will take him at his word that he finds train travel more comfortable than other options. Still, the presence of these options proves-preferences notwithstanding-that Abadi has a meaningful choice among modes of transportation. Accord Samenow, 253 F.Supp.3d at 207 n.9 (rejecting plaintiff's argument that “he had no alternative” to a credit card that required arbitration because “only that card offered the same benefits” for his preferred airline carrier).

In short, Abadi's testimony reveals that he had, and continues to have, realistic alternative modes of transportation, none of which he has shown require him to enter into a binding arbitration agreement. Cf. Keeton, 987 A.2d at 1122 n.13 (explaining that plaintiff would lack a meaningful choice if every “[car] dealership in the region also imposes similar arbitration clauses in similar contracts of adhesion”). Because Abadi had other options, the Court concludes that Amtrak's Arbitration Agreement is not procedurally unconscionable.

B.

Turn now to substantive unconscionability. A contract is substantively unconscionable if the terms are “unreasonably unfavorable to the party challenging the enforcement of the contract.” Samenow, 253 F.Supp.3d at 208 (applying D.C. law).

The Court previously determined that Abadi raised a genuine issue of material fact on whether the $225 arbitration fee was substantively unconscionable for litigants proceeding in forma pauperis. Following the evidentiary hearing, and having reviewed Abadi's filings in several other lawsuits, the Court finds that $225 fee is not unconscionable as to Abadi, despite his in forma pauperis status. Indeed, the Court has serious concerns that Abadi hid the true extent of his financial resources on his in forma pauperis application.^[1]

At the evidentiary hearing, Abadi testified inconsistently about his income, sources of income, and indigence. In his application for leave to proceed in forma pauperis, Abadi said he was unemployed, received no pay or wages, received Supplemental Nutrition Assistance Program (“SNAP”) benefits, had $49.16 in bank accounts and incurred monthly expenses for...