Net Global Marketing, Inc. v. Dialtone, Inc.

MEMORANDUM *

Dialtone, Inc. (“Dialtone”) appeals an order of the district court denying Dialtone’s motion to dismiss or compel arbitration in proceedings against Net Global Marketing, Inc. (“Net Global”). The district court found the arbitration agreement in the contract unconscionable and hence unenforceable. We affirm.

*600 As a threshold matter, our recent en banc decision in Nagrampa v. Mailcoups, Inc., 469 F.3d 1257 (9th Cir. Dec.4, 2006), instructs that the district court properly considered Net Global’s allegation that the arbitration provision was unenforceable. We opined:

Id. at 1264 (citing Buckeye Check Cashing, Inc. v. Cardegna, — U.S.-, 126 S.Ct. 1204, 1209-10 , 163 L.Ed.2d 1038 (2006)).

Net Global does not allege that the underlying service agreement between it and Dialtone is unconscionable or otherwise unenforceable. On the contrary, Net Global’s complaint relies on the service agreement in bringing its first claim for relief alleging breach of contract. Although the substantive and procedural unconscionability arguments require us to look to circumstances external to the arbitration agreement itself, “where, as here, no claim threatens to invalidate or…