Michael Schnuerle v. Insight Communications Company, L.P.

Opinion of the Court by

Appellants Michael Schnuerle, Amy Gilbert, Lance Gilbert, and Robin Wolff, individually and on behalf of all others similarly situated, filed a class action complaint in the Jefferson Circuit Court against their Internet service providers, Appellees Insight Communications Company, L.P., and Insight Communications Midwest, LLC (collectively, Insight). Insight’s Broadband High Speed Internet Service Agreement (Service Agreement) contained an arbitration clause that required customers to submit damage claims against Insight to arbitration, and it also barred class action litigation against Insight by its customers. The circuit court determined that the class action ban was enforceable, and therefore it dismissed Appellants’ complaint. The Court of Appeals affirmed. Because of that disposition, neither the circuit court nor the Court of Appeals addressed other issues, including Appellants’ challenge to the enforceability of the Service Agreement’s general arbitration clause. We granted discretionary review to consider the challenges to the enforceability of the arbitration agreement, as well as the class action waiver and confidentiality clauses contained therein. We granted Appellees’ cross-petition for discretionary review to enable a more complete resolution of the whole controversy, including the disputed choice of law provisions of the agreement and the effect of severability of the challenged provisions from the remaining portion of the arbitration agreement.

For the reasons stated below, we conclude that in cases governed by the Federal Arbitration Act, the decision of the United States Supreme Court in AT & T Mobility LLC v. Concepcion, — U.S. -, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) precludes enforcement of a state policy invalidating upon grounds of uncon-scionability, a contractual waiver of class action participation, where the unconscion-ability is based solely upon the fact that the dispute involves a large number of de minimis claims which are unlikely to be individually litigated. Consequently, in the dispute before this Court, the contrac*565tual provision under which Appellants waived their right to participate in class action litigation is now enforceable under federal law. We also determine as follows: 1) that the Service Agreement’s choice of law provision is not enforceable, and that Kentucky law, rather than New York law, is applicable to our review; 2) that the Service Agreement’s general arbitration provision is not unconscionable, that it comports with Kentucky’s public policy preference favoring arbitration, and is therefore enforceable; and 3) that the provision imposing a confidentiality requirement upon the litigants to arbitration proceedings is void and is severable from the remaining portions of the agreement. As such, we affirm in part, reverse in part and remand to the Jefferson Circuit Court for entry of a final judgment consistent with this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellants are all Kentucky residents who entered into the Service Agreement with Insight for broadband Internet service in the area of Jefferson County, Kentucky. In order to receive service, the customers were required to either sign the Service Agreement or manifest their assent to the Service Agreement via the Internet.

The Service Agreement contains an arbitration clause. Within the arbitration clause are provisions under which customers agree not to enter into a class action lawsuit against Insight and not to divulge the results of any settlement reached through arbitration. The clause, however, does permit individual customers to pursue any claim of less than $1,500.00 through small claims court instead of proceeding to arbitration.

Insight’s 2006 effort to upgrade its high-speed Internet service left many of its customers, including Appellants, with service outages for varying lengths of time. Those outages generated a high volume of calls into Insight’s customer service department, which resulted in long wait times for customers to receive assistance. According to Appellants, once customers did get through, they received false and misleading information concerning the service interruption. They further allege that Insight acted improperly by failing to timely inform its customers about the outage, and by failing to protect customers “from deletion of information.”

Insight responds that it acknowledged the problem in a timely fashion and issued credits to 2,595 customers who notified the company of their particular outage problem. The company later issued a public apology for the disruptions and set up a voucher system allowing any other dissatisfied customers to request a credit for the interrupted service. Insight admits to monetary liability for any service it billed to customers while their Internet connection was down, and maintains that any dispute would simply require calculating the actual outage time, which it is willing to do under its customer service procedures.

Notwithstanding Insight’s efforts to address the problem, Appellants filed a complaint in Jefferson Circuit Court on behalf of themselves individually, and, pursuant to CR 23, on behalf of the putative class of all other Insight customers in Kentucky similarly situated. Causes of action were asserted based upon violations of the Kentucky Consumer Protection Act, KRS 367.170, et seq., breach of contract, and unjust enrichment.

Insight moved to dismiss the action and to compel arbitration pursuant to the mandatory arbitration clause contained in the Service Agreement. As noted above, the arbitration clause does not mandate arbi*566tration of every dispute but, rather, it allows claims less than $1,500.00 to be litigated. There is no allegation that the claim of any individual customer would exceed $1,500.00. The typical claim would be in the range of $40.00. Thus, it is apparent that any member of the putative class would have the options of filing a suit in small claims court or proceeding to arbitration.

Appellants argued that the arbitration clause was unenforceable on the grounds that it was an unconscionable provision of an adhesion contract imposed upon them by a party with significantly greater bargaining power. Appellants also argued that the arbitration clause was communicated to customers in a manner that ensured few, if any, would read it; that they were forced to use Insight’s services because it was the only local broadband cable Internet provider; that they could not effectively pursue their claims on an individual basis; and that, because of the small amounts involved, individual customers would be unable to retain counsel willing to take the case.

The trial court granted Insight’s motion to compel arbitration and it dismissed the class action with prejudice, requiring claimants to pursue their remedy individually through arbitration or in small claims court as provided in the Service Agreement. The Court of Appeals affirmed the circuit court’s decision. We granted discretionary review.

On December 16, 2010, this Court rendered an opinion in this case. While Appel-lee’s petition for rehearing or modification of our opinion was pending, the United States Supreme Court rendered its opinion in AT & T Mobility LLC v. Concepcion, supra, a decision that dealt with a substantially similar issue: the enforceability of a class action waiver in a contract that also required arbitration of any disputes arising out of the contract. We ordered supplemental briefing and heard oral arguments on the applicability of Concepcion. Having now reconsidered our previous opinion in light of the United States Supreme Court’s decision in Concepcion, we have withdrawn our earlier rendition and substituted this opinion.

II. OUR REVIEW IN THIS CASE IS GOVERNED BY PRINCIPLES OF KENTUCKY LAW RATHER THAN NEW YORK LAW

Among the provisions contained in the Dispute Resolution section of the Service Agreement is a choice of law clause which provides that “New York Law, (excluding its choice of law rules) will apply to the construction, interpretation, and enforcement of’ the Service Agreement. Citing to Breeding v. Massachusetts Indem. and Life Ins. Co., 633 S.W.2d 717 (Ky.1982), the circuit court declined to apply the Service Agreement’s choice of law provision, and instead applied Kentucky law in determining whether the arbitration agreement was enforceable.1 Because the choice of law is a threshold question in our review and was raised by Insight in its cross-petition, we first address the enforceability of the Service Agreement’s choice of law provision.

Breeding, upon which the circuit court relied, addressed the issue as follows:

The traditional choice of law rules in the field of contracts dictated that matters bearing upon the execution, interpretation and validity of a contract were determinable by the internal law of the *567place where the contract was made. Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). However, such a mechanical approach is no longer favored. This court in Lewis v. [Am.] Family [Ins.] Group, Ky., 555 S.W.2d 579 (1977) abrogated the traditional rule of lex loci contractus stating:

Traditionally the rule has been that the validity of a contract is to be determined by the laws of the state in which it was made.... The modern test is which state has the most significant relationship to the transaction and the parties. Restatement Second of Conflicts, Sec. 188 (1971).[2] Lewis, supra, pp. 581-582.

Increasingly, states have adopted the grouping of contacts doctrine. Justice, fairness and the best practical result may best be achieved by giving controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence or the parties, has the greatest concern with the specific issue raised in the litigation. Babcock v. Jackson, 240 N.Y.S.2d 743, at 749, 191 N.E.2d 279, at 283, supra.

The merit of the doctrine followed in Babcock, supra, is that it gives to the forum having the most interest in the problem paramount control over the legal issues arising out of a particular factual context.

Id. at 719; see also Harris Corp. v. Comair, Inc., 712 F.2d 1069, 1071 (6th Cir.1983) and Wallace Hardware Co., Inc. v. Abrams, 223 F.3d 382 (6th Cir.2000). The Breeding decision held that Kentucky law should apply because Kentucky had the greater interest in, and the most significant relationship to, the transaction and the parties.

Upon application of Breeding, we agree with the circuit court’s conclusion that Kentucky law governs our evaluation of the Service Agreement. Appellants, the other members of the putative class, the Internet equipment, the Internet service provided, and the relevant operating area are all located in Kentucky. The customers executed the agreements in Kentucky, and Kentucky has a substantial interest in the protection of its residents in the area of commercial transactions. Moreover, one of the principal claims arises under the Kentucky Consumer Protection Act. New York, on the other hand, has no discernible connection or interest at all in the subject matter of this litigation. Thus, there can be no doubt that Kentucky has “the greater interest and the most significant relationship to the transaction and the parties.”

We accordingly base our review of the Service Agreement on relevant Kentucky law. We further note, however, that the parties do not dispute that the Federal Arbitration Act (FAA) is applicable to the arbitration clause, and we accordingly apply its provisions as appropriate.

III. THE SERVICE AGREEMENT’S COMPREHENSIVE BAN ON CLASS ACTION LITIGATION IS ENFORCEABLE UNDER FEDERAL ARBITRATION LAW

The principal issue in this appeal is whether the Service Agreement’s ban on *568class action litigation is enforceable against Appellants and the members of the putative class they would represent. The ban on class actions found in Insight’s Service Agreement in this case is comprehensive and absolute, prohibiting the joining of disputes of different claimants, in lawsuits and in arbitration, in all situations and in all forums.3

Appellants contend that Insight’s prohibition on class action litigation effectively immunizes it from liability for wrongful conduct resulting in many small claims, because it removes the only viable and economically effective remedy available for the redress of such claims.4 They argue that because it is not economically practical for an individual customer to independently litigate his or her de minimis claim, the class action prohibition effectively exculpates Insight from liability for such claims and, correspondingly, it thereby unjustly enriches the company because it will never have to provide recompense for the many small claims.5

We agree that the purpose of the class action under CR 23 is to provide a remedy for the very concerns that Appellants raise. The practical effect of de minimis claims situations has been explained in other cases addressing class action litigation. “Economic reality dictates that [litigation involving many small claims] proceed as a class action or not at all.” Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 161, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974) (“A critical fact in this litigation is that petitioner’s individual stake in the damages award he seeks is only $70. No competent attorney would undertake this complex antitrust action to recover so inconsequential an amount.”). “The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or *569her rights. A class action solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.” Amchem Products, Inc. v. Windsor, 521 U.S. 591, 617, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (quoting Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir.1997)); Carnegie v. Household Intern., Inc., 376 F.3d 656, 661 (7th Cir.2004) (Posner, J.) (“The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”).6, 7

Because of the important purpose served by class actions, we would be inclined to join the jurisdictions, such as those just mentioned, that have invalidated provisions of consumer adhesion contracts that bar class action resolution of disputes. Our initial opinion in this case so held. However, upon application of Concepcion, we are now constrained to conclude that under contracts like the one now before us, which contain a class action waiver and also require disputes to be arbitrated under the FAA, the federal policy favoring arbitration preempts any state law or policy invalidating the class action waiver as unconscionable based solely upon the grounds that the dispute involves many de minimis claims which are, individually, unlikely to be litigated. We are satisfied that Concepcion is dispositive, and therefore, we turn our discussion to its application in this case.

As a preliminary matter, Appellants argue that Insight has waived the federal preemption argument of Concepcion, or is judicially estopped from asserting that defense, by “t[aking] the position that state law governed the enforceability of its class action ban.” Appellant’s Supplemental Authority Brief, pg. 2: Clearly, the arbitration clause in this proceeding specifically provided that it was to be controlled, as applicable, by the FAA. To our knowledge, Insight has not contended otherwise. Moreover, we regard Insight’s earlier references to state law analysis as indicating no more than the unexceptional and well-established rule that the interpretation of an arbitration agreement is generally a matter of state contract law. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31, 129 S.Ct. 1896, 173 L.Ed.2d 832 (2009) (State law is applicable to determine which contracts are binding and enforceable under, the FAA “if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally,” quoting Perry v. Thomas, 482 U.S. 483, 493, n. 9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987)). Thus, we conclude that Insight’s request that we review this matter under the holding in Concepcion is properly preserved, and we *570do not further address Appellants’ preservation arguments.8

We similarly reject Appellants’ argument to the effect we should not accept Justice Thomas’s separate opinion in Concepcion as a complete concurrence, and that therefore the decision is a mere plurality not commanding five votes. While Justice Thomas did indeed express a separate interpretation of FAA § 2, he nonetheless made clear his full concurrence with the majority by saying: “When possible, it is important in interpreting statutes to give lower courts guidance from a majority of the Court.” Concepcion, 131 S.Ct. at 1754 (Thomas, J., concurring) (“Therefore, although I adhere to my views on purposes-and-objectives pre-emption [citation omitted] I reluctantly join the Court’s opinion.”)

In Concepcion, the Supreme Court considered a California case in which the plaintiffs had entered into cellular telephone service agreements with AT & T. The agreements provided for arbitration of all disputes between the parties, and further required that claims be brought in the parties’ “individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.” Id. at 1744.

When a dispute arose, AT & T moved to compel arbitration under the terms of its contract. The plaintiffs opposed the motion, contending that the arbitration agreement was unconscionable and unlawfully exculpatory under California law because it disallowed class action procedures. Relying on the rule adopted by the California Supreme Court in Discover Bank v. Superior Court, 36 Cal.4th 148, 30 Cal.Rptr.3d 76, 113 P.3d 1100 (2005) (abrogated by Concepcion), the district court denied AT & T’s motion to compel, finding that the arbitration provision was unconscionable because AT & T had not shown that bilateral arbitration adequately substituted for the deterrent effects of class actions; the Ninth Circuit affirmed, also finding the provision unconscionable under the Discover Bank rule. Laster v. AT & T Mobility LLC, 584 F.3d 849, 855 (9th Cir.2009) (reversed by Concepcion); Concepcion, 131 S.Ct. at 1745. In Discover Bank, the California Supreme Court considered class action waivers in arbitration agreements in the context of de minimis claims and held them to be unconscionable and unenforceable under California law. Discover Bank, 30 Cal.Rptr.3d 76, 113 P.3d at 1110.

The United States Supreme Court accepted certiorari in Concepcion to consider whether the Discover Bank rule and similar holdings violate Section 2 of the Federal Arbitration Act (FAA), which makes agreements to arbitrate “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,” 9 U.S.C. § 2; whether the FAA prohibits States from conditioning the enforceability of arbitration agreements on the availability of class-wide arbitration procedures; and whether § 2 preempts Discover Bank-type rules classifying class action waivers in consumer contracts as unconscionable.

*571The rationale supporting the Discover Bank rule, and the principal argument relied upon by the plaintiffs in Concepcion, is that the striking down of an exculpatory class action waiver derives from common law unconscionability doctrine and the well-established policy against exculpation provisions, and that these are well-established grounds that “exist at law or in equity for the revocation of any contract” under FAA § 2. The Court, however, concluded that the application of doctrines normally thought to be generally applicable to any contract, such as duress or, as relevant here, unconscionability, in the context of an arbitration clause, may in practice, disfavor arbitration in a way that violates § 2 of the FAA.

The Court noted that while ostensibly these rules would apply equally to all contracts, litigation, and litigants, in practice, the rules would have a disproportionate impact on arbitration agreements, concluding that “[rjequiring the availability of class-wide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.” Concepcion, 131 S.Ct. at 1748. In explaining why this is so, the Court began by noting that the “principal purpose” of the FAA is to “ensur[e] that private arbitration agreements are enforced according to their terms.” Id. (citing Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., — U.S. -, 130 S.Ct. 1758, 1763, 176 L.Ed.2d 605 (2010)).9

The Court also cited to Preston v. Ferrer, 552 U.S. 346, 358, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008), which preempted a state-law rule requiring exhaustion of administrative remedies before arbitration, where the Court emphasized that “[a] prime objective of an agreement to arbitrate is to achieve ‘streamlined proceedings and expeditious results,’ ” which objective would be “frustrated” by requiring a dispute to be heard by an agency first, ... and that such a rule would “at the least, hinder speedy resolution of the controversy.” Analogizing to this case, the Court concluded that “California’s Discover Bank rule similarly interferes with arbitration,” noting that if there is a class action in progress, then “companies would have less incentive to continue resolving potentially duplicative claims on an individual basis.” Concepcion, 131 S.Ct. at 1750.

The Court further cited to its holding in Stolt-Nielsen, 130 S.Ct. at 1776, that agreements which are silent on the question of class procedures could not be interpreted to allow them because the “changes brought about by the shift from bilateral arbitration to class action arbitration” are “fundamental.” Concepcion, at 1750-1751.

The Court also noted that striking down class action waivers contained in arbitration clauses is detrimental to arbitration in violation of § 2 because the switch from bilateral to class arbitration sacrifices the principal advantage of arbitration, its informality, and makes the process slower, more costly, and more likely to generate a procedural morass than a final judgment. Id. at 1751. The Court further emphasized the complications created by the pro*572cedural formality associated with class actions, noting, for example the rigorous due process and Federal Rule of Civil Procedure — based rules required for a class action money judgment to bind absent class members in litigation, and noted that it is “unlikely that in passing the FAA Congress meant to leave the disposition of these procedural requirements to an arbitrator.” Id.

Finally, the Court noted that class arbitration creates a substantial deterrent to arbitration because a class action greatly increases the risks to defendants of a devastating arbitration award with a very limited opportunity for judicial review of the decision. “Arbitration,” the Court noted, “is poorly suited to the higher stakes of class litigation.” Id. As such, the Court found it unlikely that Congress would have intended to allow state courts, by adopting a Discover Bank-type rule, to force parties to choose between a high-stakes arbitration without meaningful appellate review, or litigation in the courts. Id. at 1752. Because the Discover Bank rule “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” in favoring arbitration, the Court held that the Discover Bank rule is preempted by the FAA. Id.

As can be readily seen, the Discover Bank rule encompasses facts substantially identical to the facts in this case. More specifically, like the Discover Bank rule, the present case also includes (1) a class action waiver; (2) found in a consumer contract of adhesion; (3) involving small amounts of damages; and (4) it is alleged that the party with the superior bargaining power is unfairly withholding a small sum of money in damages from each of a large number of its consumers.

Appellants seek to distinguish Concepcion, relying upon three principal grounds: (1) that the Discover Bank rule stricken by the Court was applied systematically in any de minimis claim situation, and would not prevent the adoption of a similar rule that was applied only on a case-by-case basis; (2) that the arbitration agreement in issue here is far less consumer-friendly than the one reviewed in Concepcion; and (3) that the Mitsubishi10 line of cases holding that class action waivers may be stricken when consumers are otherwise unable to vindicate their rights, is unaffected by Concepcion, and that the clause in this case prevents the injured customers from vindicating their rights.

We ai'e not persuaded by Appellants’ effort to distinguish Concepcion. First, assuming that the Appellees are correct that the Discover Bank rule is an inflexible rule leaving no room for discretion, we are nevertheless unconvinced that simply re-characterizing the same basic idea as an individualized determination based upon the facts of each case is sufficient to evade the Concepcion holding. Nor do we believe this case is distinguishable by virtue of the relatively more consumer-friendly arbitration clause contained in Concepcion in comparison with the clause contained in this case. A careful reading of Concepcion discloses that the unusually consumer-friendly terms of the AT & T agreement were not particularly relevant to the Supreme Court’s holding. Rather, what the Court was actually focusing on and condemning in Concepcion was the chilling effect on arbitration that occurs when courts are able to invalidate class action waivers in cases involving de minimis claims; which is precisely what the Appel*573lants request that we do in this proceeding. We therefore believe that the less favorable terms for consumers provided by the Insight agreements offer no basis for a departure from Concepcion’s holding. That factor simply was not central to the Supreme Court’s holding in the case.

Finally, we strongly agree with- Appellants that Concepcion does not disturb the basic principle that an arbitration clause is not enforceable if it fails to provide plaintiffs with an adequate opportunity to vindicate their claims. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 637, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (“[S]o long as the prospective litigant effectively may vindicate [his] statutory cause of action in the arbi-tral forum, the statute will continue to serve both its remedial and deterrent function.”); Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 81, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000) (“the existence of large arbitration costs may well preclude a litigant ... from effectively vindicating such rights”); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991); 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 129 S.Ct. 1456, 173 L.Ed.2d 398 (2009). Accordingly, arbitration clauses certainly may continue to be struck down as unconscionable if their terms strip claimants of a statutory right, which cannot be vindicated by arbitration, because, for example, the arbitration costs on the plaintiff are prohibitively high; or the location of the arbitration is designated as a remote location. But again, simply the impracticality of pursuing a single, small dollar claim is not regarded as an impediment to vindicating one’s rights.

Finally, it would be inaccurate to conclude that the consumers in this case cannot adequately vindicate their rights as contemplated in Mitsubishi for the reason that the arbitration clause in this case specifically reserves for Insight customers the same avenue of recovery available to any other plaintiff with a $40.00 claim, that is, the right to go to small claims court. The cost of going to small claims is a $20.00 filing fee, CR 3.03(Z)(a), plus the cos.t of service of process, all of which would be recoverable as part of the successful small claims judgment. And while most, if not all, consumers may well choose to forgo recovery because it is just not worth the trouble, by the Supreme Court’s calculus in Concepcion, it is preferable for the public to suffer the unjust enrichments that defendants may occasionally gain than to burden the arbitration process favored by federal law with a Discover Bank-type rule. We, of course, yield as we must to the United States Supreme Court’s interpretation of federal law.

In summary, we conclude that Concepcion is dispositive of this issue. A decision to invalidate or otherwise disregard the anti-class action provision of Insight’s Service Agreements on grounds of uncon-scionability would undermine the federal policy favoring arbitration, and would offend the preemption provisions of the Federal Arbitration Act, as interpreted in Concepcion. We accordingly conclude that the Court of Appeals properly affirmed the trial court’s dismissal of the putative class action claim.

IV. THE GENERAL ARBITRATION CLAUSE IS NOT UNCONSCIONABLE

In addition to their arguments relating to the class action waiver, Appellants argue that the arbitration clause is unenforceable in its totality as an unconscionable adhesion contract term. For the reasons explained below, we conclude that the general arbitration provisions *574are neither procedurally or substantively unconscionable, and remain enforceable.

A. The Arbitration Clause

Section 5 of the Service Agreement, contains the following general provisions relevant to our review of the enforceability of the arbitration clause:

(a) Arbitration for Resolution of Disputes. IT IS IMPORTANT THAT YOU READ THIS ENTIRE SECTION CAREFULLY. THIS SECTION PROVIDES FOR RESOLUTION OF DISPUTES THROUGH FINAL AND BINDING ARBITRATION BEFORE A NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE OR JURY OR THROUGH A CLASS ACTION. YOU continue to have CERTAIN RIGHTS TO OBTAIN RELIEF FROM a federal or state REGULATORY agency.

(b) BINDING ARBITRATION. The arbitration process established by this section is governed by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. The FAA, not state law, shall govern the arbitrability of all disputes between Insight regarding this Agreement and the Service. You have the right to take any dispute that qualifies to small claims court rather than arbitration. However, all other disputes arising out of or related to this Agreement (whether based in contract, tort, statute, fraud, misrepresentation or any other legal or equitable theory) must be resolved by final and binding arbitration, unless provided otherwise in this Agreement. This includes any dispute based on any product, service or advertising having a connection with this Agreement and any dispute not finally resolved by a small claims court. The arbitration will be conducted by one arbitrator using the procedures described by this Section. If any portion of this Dispute Resolution Section is determined to be unenforceable, then the remainder shall be given full force and effect. The provisions of this, section shall survive termination, amendment or expiration of this Agreement.

As discussed below, we discern nothing unconscionable, or unenforceable about this arbitration clause.

B. Kentucky Law Favors Arbitration

We begin by noting that in Kentucky, unlike most jurisdictions, arbitration enjoys the imprimatur of our state Constitution. Section 250 of the Kentucky Constitution provides “It shall be the duty of the General Assembly to enact such laws as shall be necessary and proper to decide differences by arbitrators, the arbitrators to be appointed by the parties who may choose that summary mode of adjustment.” Similar provisions were contained in Article VI, Section 10, of Kentucky’s Second Constitution adopted in 1799, and in Article 8, Section 10, of Kentucky’s Third Constitution adopted in 1850. See Dutschke v. Jim Russell Realtors, Inc., 281 S.W.3d 817, 823 (Ky.App.2008).

Clearly, it has long been the public policy of Kentucky that arbitration is a favored method of dispute resolution. “Arbitration has always been favored by the courts.” Poggel v. Louisville Ry. Co., 225 Ky. 784, 10 S.W.2d 305, 310 (1928). “Kentucky law favors the enforcement of arbitration agreements.” Medcom Contracting Services, Inc. v. Shepherdsville Christian Church Disciples of Christ, 290 S.W.3d 681, 685 (Ky.App.2009) (citing Kodak Mining Co. v. Carrs Fork Corp., 669 S.W.2d 917 (Ky.1984)); see also Ally Cat, LLC v. Chauvin, 274 S.W.3d 451, 457 (Ky.2009).

Further, our legislature has statutorily recognized a public policy preference favoring arbitration. Subject to exceptions not relevant here, KRS 417.050 provides *575that “[a] written agreement to submit any existing controversy to arbitration or a provision in written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract.” Similarly, the Federal Arbitration Act, 9 U.S.C.A. § 2(FAA), which is applicable to arbitration provisions involving interstate commerce,11 provides that “[a] written