{ "id": 4249741, "name": "Andrea J. FELTS, on behalf of herself and all others similarly situated, Plaintiff-Appellee, v. CLK MANAGEMENT, INC. f/k/a Bat Services, Inc. and Cash Advance Network, Inc., Defendants-Appellants", "name_abbreviation": "Felts v. CLK Management, Inc.", "decision_date": "2011-04-08", "docket_number": "Nos. 30,142, 29,702", "first_page": "681", "last_page": "697", "citations": [ { "type": "official", "cite": "149 N.M. 681" }, { "type": "parallel", "cite": "254 P.3d 124" }, { "type": "parallel", "cite": "2011-NMCA-062" } ], "court": { "name_abbreviation": "N.M. Ct. App.", "id": 9025, "name": "Court of Appeals of New Mexico" }, "jurisdiction": { "id": 52, "name_long": "New Mexico", "name": "N.M." }, "cites_to": [ { "cite": "446 F.3d 25", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 2843785 ], "weight": 2, "pin_cites": [ { "page": "61-62" }, { "page": "62", "parenthetical": "noting that courts typically prefer \"declaring an arbitration agreement unenforceable rather than using severance as a remedy when fundamental elements of the arbitration regime are at issue\" and that severing the class arbitration bar would be \"difficult to justify\" absent a savings clause" } ], "opinion_index": 0, "case_paths": [ "/f3d/446/0025-01" ] }, { "cite": "2003-NMSC-011", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 15883 ], "weight": 6, "pin_cites": [ { "page": "\u00b6 15" }, { "page": "\u00b6 18" } ], "opinion_index": 0, "case_paths": [ "/nm/133/0661-01" ] }, { "cite": "622 F.3d 996", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 3787400 ], "pin_cites": [ { "page": "1001" } ], "opinion_index": 0, "case_paths": [ "/f3d/622/0996-01" ] }, { "cite": "1999-NMCA-040", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 827316 ], "weight": 3, "pin_cites": [ { "page": "\u00b6\u00b6 15-17" } ], "opinion_index": 0, "case_paths": [ "/nm/126/0748-01" ] }, { "cite": "179 F.3d 861", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 844518 ], "pin_cites": [ { "page": "867-68" } ], "opinion_index": 0, "case_paths": [ "/f3d/179/0861-01" ] }, { "cite": "886 F.2d 469", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10530582 ], "pin_cites": [ { "page": "473" } ], "opinion_index": 0, "case_paths": [ "/f2d/886/0469-01" ] }, { "cite": "432 F.3d 1327", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 556348 ], "pin_cites": [ { "page": "1331-32" } ], "opinion_index": 0, "case_paths": [ "/f3d/432/1327-01" ] }, { "cite": "398 F.3d 205", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 9028221 ], "pin_cites": [ { "page": "208" } ], "opinion_index": 0, "case_paths": [ "/f3d/398/0205-01" ] }, { "cite": "559 F.3d 874", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 5659498 ], "pin_cites": [ { "page": "877-78" } ], "opinion_index": 0, "case_paths": [ "/f3d/559/0874-01" ] }, { "cite": "2004-NMSC-002", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 1428086 ], "weight": 6, "pin_cites": [ { "page": "\u00b6 10" }, { "page": "\u00b6 10" } ], "opinion_index": 0, "case_paths": [ "/nm/135/0017-01" ] }, { "cite": "2002-NMCA-030", "category": "reporters:neutral", "reporter": "NMCA", "case_ids": [ 183090 ], "weight": 6, "pin_cites": [ { "page": "\u00b6 52" }, { "page": "\u00b6 55" } ], "opinion_index": 0, "case_paths": [ "/nm/131/0772-01" ] }, { "cite": "98 N.M. 330", "category": "reporters:state", "reporter": "N.M.", "case_ids": [ 1582475 ], "weight": 4, "year": 1982, "pin_cites": [ { "page": "332" }, { "page": "790" }, { "page": "332" }, { "page": "790" } ], "opinion_index": 0, "case_paths": [ "/nm/98/0330-01" ] }, { "cite": "546 U.S. 440", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 5962007 ], "weight": 17, "year": 2006, "pin_cites": [ { "page": "444" }, { "page": "445-46" }, { "page": "446" }, { "page": "444" }, { "page": "446" }, { "page": "445" }, { "page": "444, 446" }, { "page": "444" } ], "opinion_index": 0, "case_paths": [ "/us/546/0440-01" ] }, { "cite": "514 U.S. 938", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 1339246 ], "weight": 9, "year": 1995, "pin_cites": [ { "page": "943" }, { "parenthetical": "\"Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question [of] 'who has the primary power to decide arbitrability' turns upon what the parties agreed about that matter.\" (citation omitted)" }, { "parenthetical": "\"Just as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question [of] 'who has the primary power to decide arbitrability' turns upon what the parties agreed about that matter.\" (citation omitted)" }, { "page": "944" }, { "page": "944" }, { "page": "944" } ], "opinion_index": 0, "case_paths": [ "/us/514/0938-01" ] }, { "cite": "539 U.S. 444", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 8898136 ], "weight": 4, "year": 2003, "pin_cites": [ { "page": "452", "parenthetical": "\"In certain limited circumstances, courts assume that the parties intended courts, not arbitrators, to decide a particular arbitration-related matter[] in the absence of clear and unmistakable evidence to the contrary[.]\" (alterations omitted" }, { "parenthetical": "\"In certain limited circumstances, courts assume that the parties intended courts, not arbitrators, to decide a particular arbitration-related matter[] in the absence of clear and unmistakable evidence to the contrary[.]\" (alterations omitted" }, { "parenthetical": "\"In certain limited circumstances, courts assume that the parties intended courts, not arbitrators, to decide a particular arbitration-related matter[] in the absence of clear and unmistakable evidence to the contrary[.]\" (alterations omitted) (internal quotation marks and citation omitted" }, { "parenthetical": "internal quotation marks and citation omitted" } ], "opinion_index": 0, "case_paths": [ "/us/539/0444-01" ] }, { "cite": "537 U.S. 79", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 9190679 ], "weight": 5, "year": 2002, "pin_cites": [ { "page": "83" }, { "page": "84" } ], "opinion_index": 0, "case_paths": [ "/us/537/0079-01" ] }, { "cite": "9 U.S.C. \u00a7 2", "category": "laws:leg_statute", "reporter": "U.S.C.", "opinion_index": 0 }, { "cite": "470 U.S. 213", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11299026 ], "weight": 3, "year": 1985, "pin_cites": [ { "page": "218" } ], "opinion_index": 0, "case_paths": [ "/us/470/0213-01" ] }, { "cite": "475 U.S. 643", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6206747 ], "weight": 5, "year": 1986, "pin_cites": [ { "page": "648", "parenthetical": "internal quotation marks and citation omitted" }, { "parenthetical": "internal quotation marks and citation omitted" }, { "parenthetical": "internal quotation marks and citation omitted" }, { "page": "649" } ], "opinion_index": 0, "case_paths": [ "/us/475/0643-01" ] }, { "cite": "2009-NMSC-021", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 4243196 ], "weight": 14, "pin_cites": [ { "page": "\u00b6 11" }, { "parenthetical": "internal quotation marks and citation omitted" }, { "page": "\u00b6 21" }, { "page": "\u00b6 40" }, { "page": "\u00b6 40" } ], "opinion_index": 0, "case_paths": [ "/nm/146/0256-01" ] }, { "cite": "177 L.Ed.2d 403", "category": "reporters:federal", "reporter": "L. Ed. 2d", "case_ids": [ 3644316, 12455276 ], "year": 2010, "opinion_index": 0, "case_paths": [ "/us/561/0063-01", "/l-ed-2d/177/0403-01" ] }, { "cite": "130 S.Ct. 2772", "category": "reporters:federal", "reporter": "S. Ct.", "case_ids": [ 12455276, 3644316 ], "weight": 14, "year": 2010, "pin_cites": [ { "page": "2777", "parenthetical": "\"We have recognized that parties can agree to arbitrate 'gateway' questions of 'arbitrability,' such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.\"" }, { "page": "2777" }, { "page": "2777-78" }, { "page": "2779" }, { "page": "2775, 2777" }, { "page": "2779", "parenthetical": "omissions in original" }, { "page": "2775" }, { "page": "2779", "parenthetical": "\"[U]nless [the employee] challenged the delegation provision specifically, we must treat it as valid under [section] 2 [of the FAA], and must enforce it under [sections] 3 and 4, leaving any challenge to the validity of the [a]greement as a whole for the arbitrator.\"" }, { "page": "2779-81" }, { "page": "2781", "parenthetical": "Stevens, J., dissenting" }, { "page": "2779-81" }, { "page": "2778-79" } ], "opinion_index": 0, "case_paths": [ "/l-ed-2d/177/0403-01", "/us/561/0063-01" ] }, { "cite": "517 U.S. 681", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 11746265 ], "weight": 5, "year": 1996, "pin_cites": [ { "page": "687" }, { "page": "687" } ], "opinion_index": 0, "case_paths": [ "/us/517/0681-01" ] }, { "cite": "9 U.S.C. \u00a7\u00a7 1", "category": "laws:leg_statute", "reporter": "U.S.C.", "opinion_index": 0 }, { "cite": "2008-NMSC-046", "category": "reporters:neutral", "reporter": "NMSC", "case_ids": [ 4002330 ], "weight": 19, "pin_cites": [ { "page": "\u00b6 19" }, { "page": "\u00b6 23" }, { "page": "\u00b6 20" }, { "page": "\u00b6\u00b6 2, 5" }, { "page": "\u00b6 24" } ], "opinion_index": 0, "case_paths": [ "/nm/144/0464-01" ] } ], "analysis": { "cardinality": 1527, "char_count": 57671, "ocr_confidence": 0.69, "pagerank": { "raw": 1.0200300907898897e-07, "percentile": 0.5450049404424737 }, "sha256": "2a372bd483f7d6800bc3d54c8929f03a6dce9e20b355fb588715a97316833f82", "simhash": "1:d830758281aeb3eb", "word_count": 8895 }, "last_updated": "2023-07-14T18:48:34.747020+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "WE CONCUR: JONATHAN B. SUTIN and RODERICK T. KENNEDY, Judges." ], "parties": [ "Andrea J. FELTS, on behalf of herself and all others similarly situated, Plaintiff-Appellee, v. CLK MANAGEMENT, INC. f/k/a Bat Services, Inc. and Cash Advance Network, Inc., Defendants-Appellants." ], "opinions": [ { "text": "OPINION\nFRY, Judge.\n{1} The opinion filed in this case on March 2, 2011, is hereby withdrawn, and the following opinion is filed in its place. The motions for rehearing filed by Defendants are denied.\n{2} In this consolidated case, Defendants CLK Management, Inc.(CLK) and Cash Advance Network, Inc. (CANI) (collectively, Defendants) appeal the district court\u2019s denial of their respective motions to compel arbitration and to stay proceedings pursuant to a binding arbitration provision located within three payday-type loan agreements that Plaintiff Andrea J. Felts entered into with Defendants over the Internet. Defendants moved to compel arbitration in response to a putative class action lawsuit filed by Felts in district court, in which she alleged that Defendants\u2019 payday lending enterprises are engaged in online lending practices in direct violation of a number of New Mexico laws. The district court declined to order the parties to arbitrate their dispute after agreeing with Felts that the arbitration provision in the loan agreements was unconscionable under New Mexico law.\n{3} We conclude that the district court correctly determined that: (1) the threshold question of arbitrability was for the court, and not an arbitrator, to decide; (2) the class action ban in the arbitration provision was unconscionable and in the same vein as the class action waiver invalidated by our Supreme Court in Fiser v. Dell Computer Corp., 2008-NMSC-046, 144 N.M. 464, 188 P.3d 1215; and (3) the class action ban could not be severed from the remainder of the arbitration provision and, therefore, the entire arbitration provision was unenforceable. Accordingly, we affirm the district court\u2019s orders denying each Defendant\u2019s motion to compel arbitration.\nBACKGROUND\n1. Terms of Loan Agreements and Binding Arbitration Provision\n{4} This case stems from three different online loan transactions that Felts entered into with various Internet-based payday lending companies, including Defendants, in which she received immediate electronic deposits of cash into her bank account in exchange for a series of post-dated automatic withdrawals from the account to be applied toward repayment of the loan principal amounts plus interest and/or finance charges. For each separate transaction, she electronically signed a \u201cLoan Note and Disclosure\u201d (Loan Agreement), which was virtually identical across all three transactions and which included two provisions regarding arbitration \u2014 an \u201cAgreement to Arbitrate All Disputes\u201d (arbitration provision) and an \u201cAgreement Not to Bring, Join or Participate in Class Actions\u201d (class action waiver provision). Given the similarity of these two provisions across all three Loan Agreements, we rely on the language from Felts\u2019 Loan Agreement with \u201cMTE Financial Services, Inc. d/b/a Cash Advance Network\u201d for purposes of this appeal.\n{5} Under that particular Loan Agreement, the arbitration provision provided that \u201cany and all claims, disputes or controversies [between the borrower and lender] shall be resolved by binding individual (and not class) arbitration by and under the Code of Procedure of the National Arbitration Forum (\u2018NAF\u2019).\u201d Featured prominently in all capital letters within the arbitration provision was a clause directing that the claims subject to arbitration could not be arbitrated on a class-wide basis: \u201cTHE ARBITRATOR SHALL NOT CONDUCT CLASS ARBITRATION; THAT IS, THE ARBITRATOR SHALL NOT ALLOW YOU TO SERVE AS A REPRESENTATIVE, AS A PRIVATE ATTORNEY GENERAL, OR IN ANY OTHER REPRESENTATIVE CAPACITY FOR OTHERS IN THE ARBITRATION\u201d (hereinafter \u201cclass action ban\u201d). The arbitration provision also provided, in relevant part, that: (1) the arbitration was to be governed by \u201cthe Federal Arbitration Act (FAA), 9 U.S.C. \u00a7\u00a7 1 to -16 (2006)\u201d; and (2) both the borrower and lender waived their \u201cright or opportunity to litigate disputes through a court and have a judge or jury decide the disputes [and] agreed instead to resolve disputes through binding arbitration.\u201d The second provision of the Loan Agreement, the class action waiver, directed that \u201c[t]o the extent permitted by law, [the borrower] will not bring, join or participate in any class action as to any claim, dispute or controversy [the borrower] may have against [the lender].\u201d Toward that end, it permitted the lender to seek injunctive relief to end the lawsuit or to remove the borrower as a participant in the class action lawsuit, with the borrower being held responsible for the lender\u2019s court costs and attorney fees.\n{6} Thus, under the terms of the three Loan Agreements, Felts was precluded from seeking or participating in any type of class-wide action, whether it was in arbitration or in a judicial setting \u2014 which, for that matter, was not allowed in any event. We assume without deciding, for the purpose of our analysis, that Felts assented to the terms of the Loan Agreements when she electronically signed and submitted the forms online.\n2. Procedural History\n{7} On December 15, 2008, Felts filed a putative class action complaint against CLK and other payday lenders purportedly responsible for originating and/or servicing her loans, in which she claimed violations of the New Mexico Unfair Practices Act (UPA), NMSA 1978, \u00a7\u00a7 57-12-1 to -26 (1967, as amended through 2009), the New Mexico Small Loans Act (SLA), NMSA 1978, \u00a7\u00a7 58-15-1 to -39 (1955, as amended through 2007), and sought equitable relief for unjust enrichment and disgorgement of profits, as well as injunctive relief on behalf of herself and other New Mexico residents who had obtained loans under $2,500 from Defendants. She later amended the complaint to include CANI as a Defendant. We note that Felts\u2019 complaints did not make any arguments regarding the validity of the arbitration provision \u2014 in fact, the amended complaint included only a one-line statement that the Loan Agreements contained an arbitration provision. Rather, her amended complaint focused on challenging the validity of the Loan Agreements as a whole.\n{8} CLK filed its motion to compel arbitration and to stay trial proceedings pursuant to the FAA, 9 U.S.C. Section 3, and NMSA 1978, Section 44-7A-8 (2001). CLK argued that, under the arbitration provision of the Loan Agreements, Felts was required to individually arbitrate her claims and was precluded from seeking class-wide relief. CLK also alleged that because Felts had not challenged the validity of the arbitration provision in her complaint, the district court could not consider any such challenges and was instead required to refer the entire matter to arbitration. Felts opposed CLK\u2019s motion, arguing that the arbitration provision was unconscionable and therefore unenforceable pursuant to section 2 of the FAA, which permits a court to refuse to enforce an arbitration agreement based on \u201cgenerally applicable contract defenses, such as fraud, duress, or unconscionability.\u201d Doctor\u2019s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996). Specifically relying on our Supreme Court\u2019s rationale in Fiser, Felts argued that the class action ban in the arbitration provision amounted to an exculpatory clause for CLK and therefore rendered the entire arbitration provision substantively unconscionable and unenforceable under New Mexico law.\n{9} After a hearing on CLK\u2019s motion, the district court declined to order the parties to arbitrate their disputes. After concluding that it had jurisdiction to decide the validity of the arbitration agreement, the district court found that Felts\u2019 claims constituted \u201csmall consumer claims within the meaning of Fiser\u201d and \u201c[a]s such, [the] prohibitions against class relief [in the arbitration provisions were], contrary to New Mexico\u2019s fundamental public policy of encouraging the resolution of small consumer claims.\u201d On this basis, the district court declared the entire arbitration provision unenforceable and denied CLK\u2019s motion to compel in its entirety.\n{10} After it had been added as a Defendant, CANI also filed a motion to compel arbitration and to stay trial proceedings. CANI alleged that the district court lacked jurisdiction to decide the validity of the arbitration provision under existing United States Supreme Court precedent, that Felts was required to arbitrate all of her disputes under the terms of the arbitration provision, and that the district court could sever the unconscionable class action ban and enforce the remainder of the arbitration provision. Felts opposed this motion as well, arguing that: (1) CANI had failed to rebut the evidence she had raised regarding the exculpatory nature of the class action ban in the arbitration provision, (2) the arbitration provision was unenforceable on grounds of impossibility because the NAF \u2014 the arbitral forum selected by Defendants under the arbitration provision \u2014 was prohibited from arbitrating the parties\u2019 disputes under the terms of a national consent decree it had signed in another lawsuit, and (3) the class action ban was not severable from the rest of the arbitration provision under Fiser.\n{11} Without hearing oral argument on CANI\u2019s motion, the district court again declined to order arbitration. The district court\u2019s order on CANI\u2019s motion was virtually identical to its earlier order denying CLK\u2019s similar motion to compel, with the exception of an additional finding that \u201cthe class action ban is not severable from the CANI arbitration provision.\u201d\n{12} CLK and CANI separately appealed the district court\u2019s orders denying their respective motions to compel arbitration. The appeals were later consolidated for our review, and we also allowed the New Mexico Attorney General to submit an amicus brief in support of Felts.\nDISCUSSION\n{13} On appeal, Defendants raise the following three primary arguments: (1) the district court erroneously determined that it had jurisdiction to decide the parties\u2019 disputes regarding the validity of the arbitration provision, rather than referring the matter to an arbitrator; (2) Fiser does not apply to the facts of this case, and even if it did, the arbitration provision is not unconscionable because Felts has a meaningful remedy available to her through arbitration; and (3) the district court incorrectly determined that the class action ban could not be severed from the remainder of the arbitration provision. Defendants also refer us to recent precedent from the United States Supreme Court, Rent-A-Center, W., Inc. v. Jackson, \u2014 U.S. -, 130 S.Ct. 2772, 177 L.Ed.2d 403 (2010), which was decided after the district court declined to compel arbitration in this case, and which Defendants argue mandates reversal of the district court\u2019s orders. We address each of these arguments in turn.\n{14} We apply a de novo standard of review to the issues raised in this appeal. We review de novo a district court\u2019s order denying a motion to compel arbitration. Cordova v. World Fin. Corp., 2009-NMSC-021, \u00b6 11, 146 N.M. 256, 208 P.3d 901. Similarly, \u201cwhether the parties have agreed to arbitrate presents a question of law, and we review the applicability and construction of a contractual provision requiring arbitration de novo.\u201d Id. (internal quotation marks and citation omitted). Finally, whether a contract is unconscionable is a matter of law, and we therefore also apply de novo review to the district court\u2019s determination in this case that the class action ban rendered the arbitration provision unconscionable and unenforceable. Fiser, 2008-NMSC-046, \u00b6 19, 144 N.M. 464, 188 P.3d 1215.\n1. Arbitrability\n{15} We first address whether the district court correctly determined that it, and not an arbitrator, had jurisdiction to decide the issue of arbitrability \u2014 -that is, to decide the parties\u2019 disputes regarding the validity of the arbitration provision rather than referring this gateway issue to an arbitrator. Defendants essentially argue that under the terms of the arbitration provision, an arbitrator should have determined whether the arbitration provision was unconscionable and therefore unenforceable due to its inclusion of a class action ban.\na. Federal Framework\n{16} We begin by reviewing the applicable federal law on arbitrability because our analysis turns on recent precedent from the United States Supreme Court on this particular issue. Under the FAA, which the parties agree governs the arbitration provision at issue here, it is well established that \u201carbitration is a matter of contract.\u201d AT & T Techs., Inc. v. Commc\u2019ns Workers of Am., 475 U.S. 643, 648, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (internal quotation marks and citation omitted). \u201cBy its terms, the [FAA] leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.\u201d Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). Section 2 of the FAA specifically provides that arbitration provisions in written agreements \u201cshall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.\u201d 9 U.S.C. \u00a7 2. In other words, because arbitration provisions are treated like other contracts, they can be invalidated and held unenforceable under \u201cgenerally applicable contract defenses, such as fraud, duress, or unconscionability.\u201d Doctor\u2019s Assocs., 517 U.S. at 687, 116 S.Ct. 1652; see Fiser, 2008-NMSC-046, \u00b6 23, 144 N.M. 464, 188 P.3d 1215. This principle is entrenched in New Mexico jurisprudence as well. Id. \u00b6\u00b6 22, 23.\n{17} In this case, we are concerned with the question of who decides \u2014 a district court or an arbitrator \u2014 whether an arbitration provision in a written agreement is invalid on grounds of unconscionability. The general rule is that the arbitrability of a particular dispute is a threshold issue to be decided by the district court unless there is clear and unmistakable evidence that the parties decided otherwise under the terms of their arbitration agreement. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002). To explain more fully, although the FAA has limited the role of courts in the arbitration context, certain gateway issues involving arbitration provisions have remained within the purview of judicial review. Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003) (\u201cIn certain limited circumstances, courts assume that the parties intended courts, not arbitrators, to decide a particular arbitration-related matter[] in the absence of clear and unmistakable evidence to the contrary[.]\u201d (alterations omitted) (internal quotation marks and citation omitted)). These gateway questions of arbitrability \u201ctypically involve matters of a kind that contracting parties would likely have expected a court to decide[,]\u201d such as the validity of an arbitration provision, the scope of an arbitration provision, or whether an arbitration agreement covers a particular controversy. Id. (internal quotation marks and citation omitted); see Howsam, 537 U.S. at 84, 123 S.Ct. 588.\n{18} However, courts have recognized an important exception to the general rule that questions of arbitrability are typically for the courts to decide. Reflecting the principle that arbitration is a contractual undertaking, courts have recognized that parties can agree to have an arbitrator, rather than a court, decide gateway questions of arbitrability in addition to deciding the parties\u2019 underlying claims. See Rent-A-Center, 130 S.Ct. at 2777 (\u201cWe have recognized that parties can agree to arbitrate \u2018gateway\u2019 questions of \u2018arbitrability,\u2019 such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.\u201d); First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995) (\u201cJust as the arbitrability of the merits of a dispute depends upon whether the parties agreed to arbitrate that dispute, so the question [of] \u2018who has the primary power to decide arbitrability\u2019 turns upon what the parties agreed about that matter.\u201d (citation omitted)). In RenP-A-Center, decided in June 2010, the Supreme Court referred to this type of agreement between parties as a delegation provision, i.e., \u201can agreement [between the parties] to arbitrate threshold issues concerning the arbitration agreement [rather than having a court decide].\u201d 130 S.Ct. at 2777. As the Supreme Court explained in RenP-A-Center, a delegation provision \u201cis simply an additional, antecedent agreement the party seeking arbitration asks the federal court to enforce, and the FAA operates on this additional arbitration agreement just as it does on any other.\u201d Id. at 2777-78. In referring questions of arbitrability to an arbitrator through the enforcement of a delegation provision, courts must, however, ensure that there is \u201cclear and unmistakable evidence\u201d that the parties agreed to arbitrate questions of arbitrability. First Options, 514 U.S. at 944,115 S.Ct. 1920 (\u201cCourts should not assume that the parties agreed to arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.\u201d (alterations omitted) (internal quotation marks and citation omitted)); AT & T Techs., 475 U.S. at 649, 106 S.Ct. 1415 (\u201cUnless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.\u201d). We also note that \u201c[w]hen deciding whether the parties agreed to arbitrate a certain matter (including arbitrability), courts generally ... should apply ordinary state-law principles that govern the formation of contracts.\u201d First Options, 514 U.S. at 944, 115 S.Ct. 1920.\n{19} Within this framework, we turn to the mechanism for determining whether a party has challenged an arbitration agreement, and specifically a delegation provision, in a manner such that a court can decide the challenge in the first instance. In Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006), the Supreme Court established that challenges to the validity of arbitration provisions fall within two categories: (1) those \u201cehallengpng] specifically the validity of the agreement to arbitrate\u201d; and (2) those \u201cehallengpng] the contract as a whole, either on a ground that directly affects the entire agreement ... or on the ground that the illegality of one of the contract\u2019s provisions renders the whole contract invalid.\u201d The Court held that only the first type of challenge is for a court to decide. Id. at 445-46,126 S.Ct. 1204 (\u201c[UJnless the challenge is to the arbitration clause itself, the issue of the contract\u2019s validity is considered by the arbitrator in the first instance.\u201d). The Court noted that the class in Buckeye had not specifically challenged the validity of the arbitration provision in certain loan agreements that the individual class members had entered into with the lender. Id. at 446, 126 S.Ct. 1204. Rather, \u201c[t]he crux of the[ir] complaint [was] that the contract as a whole (including its arbitration provision) [was] rendered invalid by [a] usurious finance charge.\u201d Id. at 444, 126 S.Ct. 1204. Accordingly, the Court held that the arbitration provision was itself enforceable and the challenge to the validity of the entire contract was therefore a matter to be decided by an arbitrator and not a court. Id. at 446, 126 S.Ct. 1204 (\u201c[W]e conclude that because [the] respondents challenge the [a]greement, but not specifically its arbitration provisions, those provisions are enforceable apart from the remainder of the contract. The challenge should therefore be considered by an arbitrator, not a court.\u201d). The Court\u2019s decision to enforce the arbitration provision essentially established a rule of severability because the Court determined that \u201cas a matter of substantive federal arbitration law, an arbitration provision is sever-able from the remainder of the contract.\u201d Id. at 445, 126 S.Ct. 1204.\n{20} In circumstances where parties have decided to arbitrate arbitrability \u2014 that is, where there is a delegation provision assigning questions of arbitrability to an arbitrator \u2014 the Supreme Court\u2019s recent holding in RenP-A-Center appears to stand for the proposition that a party must specifically challenge the delegation provision in order for a court to consider the challenge rather than referring the matter to an arbitrator. 130 S.Ct. at 2779. RenP-A-Center involved an employment discrimination lawsuit in which the employer moved to compel arbitration under the terms of an arbitration agreement signed by the employee. Id. at 2775, 2777. The arbitration agreement contained a delegation provision that \u201cgave the arbitrator exclusive authority to resolve any dispute relating to the ... enforceability ... of th[e] [a]greement.\u201d Id. at 2779 (omissions in original) (internal quotation marks and citation omitted). At issue before the Supreme Court was whether the district court could consider the employee\u2019s contention that the arbitration agreement was unconscionable in light of this delegation provision which \u201cexplicitly assigned] that decision to the arbitrator.\u201d Id. at 2775. The Court held that the employee was required to have specifically challenged the delegation provision in order for the district court to be able to consider the unconscionability claim rather than submit the matter to an arbitrator. Id. at 2779 (\u201c[U]nless [the employee] challenged the delegation provision specifically, we must treat it as valid under [section] 2 [of the FAA], and must enforce it under [sections] 3 and 4, leaving any challenge to the validity of the [a]greement as a whole for the arbitrator.\u201d). The Court concluded that because the employee had not specifically challenged the delegation provision during the course of the litigation, his claim that the entire arbitration agreement was unconscionable could only be decided by an arbitrator. Id. at 2779-81. Thus, RenP-A-Center appears to establish that in cases where a delegation provision granting an arbitrator the authority to determine the validity of an arbitration agreement exists, a district court is precluded from deciding a party\u2019s claim of unconscionability unless that claim is based on the alleged unconscionability of the delegation provision itself. Id.; see id. at 2781 (Stevens, J., dissenting) (stating that the majority had adopted a rule that \u201c[e]ven when a litigant has specifically challenged the validity of an agreement to arbitrate^] he must submit that challenge to the arbitrator unless he has lodged an objection to the particular line in the agreement that purports to assign such challenges to the arbitrator \u2014 the so-called \u2018delegation clause\u2019 \u201d). With this framework in mind, we turn to the parties\u2019 specific arguments regarding arbitrability in this case.\nb. There Is Clear and Unmistakable Evidence That the Parties Intended to Delegate Questions of Arbitrability to an Arbitrator under the Terms of the Arbitration Provision\n{21} Initially, the parties dispute whether the arbitration provision in the Loan Agreements included clear and unmistakable evidence of a delegation clause requiring that questions of arbitrability regarding the validity of the arbitration provision be submitted to an arbitrator. Defendants argue that a clear and unmistakable delegation clause was included in the first sentence of the arbitration provision.\nAGREEMENT TO ARBITRATE ALL DISPUTES: By signing below ..., you and we agree that any and all claims, disputes or controversies that we or our servicers or agents have against you or that you have against us ... that arise out of your application for one or more loans, the Loan Agreements that govern your repayment obligations, the loan for which you are applying or any other loan we previously made or later make to you, this Agreement to Arbitrate All Disputes, collection of the loan or loans, or alleging fraud or misrepresentation, whether under the common law or pursuant to federal or state statute or regulation, or otherwise, including disputes as to the matters subject to arbitration, shall be resolved by binding individual (and not class) arbitration by and under the Code of Procedure of the National Arbitration Forum (\u201cNAF \u201d) in effect at the time the claim is filed.\n(Emphasis added.) Specifically, Defendants contend that the delegation clause in this sentence is the language requiring arbitration of \u201cany and all claims, disputes or controversies ... arising] out of ... this Agreement to Arbitrate All Disputes ... including disputes as to the matters subject to arbitration.\u201d Additionally, CANI argues that the parties clearly and unmistakably intended to arbitrate questions of arbitrability by incorporating the rules of the NAF into the arbitration provision. The NAF Code of Procedure expressly provides that an arbitrator has the authority to decide jurisdictional issues, including arbitrability questions regarding the existence, validity, and scope of an arbitration provision. NAF Code of Procedure, pt. IV, r.20(F), at 28 (Aug. 1, 2008) (http://www.adrforum.com/main.aspx).\n{22} As we stated previously, applicable federal law provides that courts should apply state law principles in deciding whether the parties to an arbitration agreement clearly and unmistakably agreed to submit questions of arbitrability to an arbitrator. See First Options, 514 U.S. at 944, 115 S.Ct. 1920. Under New Mexico law, arbitration agreements are governed by well-established contract law principles. See Christmas v. Cimarron Realty Co., 98 N.M. 330, 332, 648 P.2d 788, 790 (1982); Santa Fe Techs., Inc. v. Argus Networks, Inc., 2002-NMCA-030, \u00b6 52, 131 N.M. 772, 42 P.3d 1221. Our Supreme Court has stated that \u201c[c]ourts must interpret the provisions of an arbitration agreement according to the rules of contract law and apply the plain meaning of the contract language in order to give effect to the parties\u2019 agreement.\u201d McMillan v. Allstate Indem. Co., 2004-NMSC-002, \u00b6 10, 135 N.M. 17, 84 P.3d 65. Additionally, in examining the plain language of an arbitration agreement, this Court has previously stated that arbitration clauses drafted with broad strokes require broad interpretation. Santa Fe Techs., 2002-NMCA-030, \u00b6 55, 131 N.M. 772, 42 P.3d 1221. Likewise, our Supreme Court has stated that \u201c[w]hen the parties agree to arbitrate any potential claims or disputes arising out of their relationships by contract or otherwise, the arbitration agreement will be given broad interpretation unless the parties themselves limit arbitration to specific areas or matters.\u201d McMillan, 2004-NMSC-002, \u00b6 10, 135 N.M. 17, 84 P.3d 65 (internal quotation marks and citation omitted).\n{23} In this case, we hold that the plain language of the arbitration provision clearly and unmistakably evidences the parties\u2019 intent to have an arbitrator decide threshold issues of arbitrability. The terms of the arbitration provision and, specifically, the first sentence of the provision, unambiguously provide that all disputes were to be submitted to an arbitrator. In particular, we refer to the title of the arbitration provision, \u201cAgreement to Arbitrate All Disputes,\u201d as well as the language in the provision itself stating that the parties submit to arbitration \u201cany and all claims, disputes or controversies ... arising] out of ... this Agreement to Arbitrate All Disputes ... including disputes as to the matters subject to arbitration.\u201d (Emphasis added.) We view this italicized language to be clear and unmistakable evidence to the effect that the parties agreed to arbitrate all issues, including issues of arbitrability. Additionally, given the lack of any sort of limiting language, we interpret this sweeping language broadly and conclude that the parties expressly intended to arbitrate \u201call disputes\u201d \u2014 including arbitrability issues such as the validity of the arbitration provision.\n{24} Moreover, we agree with Defendants that the incorporation of the NAF Code of Procedure constitutes clear and unmistakable evidence of the parties\u2019 intent to delegate arbitrability issues. Rule 20 of the NAF Code of Procedure expressly gives the arbitrator the authority to decide issues of arbitrability. Although New Mexico courts have not yet directly addressed whether incorporation of an arbitral forum\u2019s rules constitutes clear and unmistakable evidence of the parties\u2019 intent to delegate arbitrability, a number of federal courts of appeal that have reached this issue have held that it is. See, e.g., Fallo v. High-Tech Inst., 559 F.3d 874, 877-78 (8th Cir.2009) (holding that the act of incorporating the American Arbitration Association (AAA) rules provides \u201cclearer evidence of the parties\u2019 intent to leave the question of arbitrability to the arbitrator ... because Rule 7(a) expressly gives the arbitrator the power to rule on his or her own jurisdiction\u201d and concluding that \u201cthe arbitration provision\u2019s incorporation of the AAA Rules ... constitutes a clear and unmistakable expression of the parties\u2019 intent to leave the question of arbitrability to an arbitrator\u201d (internal quotation marks omitted)); Contec Corp. v. Remote Solution, Co., 398 F.3d 205, 208 (2d Cir.2005) (stating that \u201cwhen ... parties explicitly incorporate rules that empower an arbitrator to decide issues of arbitrability, the incorporation serves as clear and unmistakable evidence of the parties\u2019 intent to delegate such issues to an arbitrator\u201d); Terminix Int\u2019l Co. v. Palmer Ranch Ltd. P\u2019ship, 432 F.3d 1327, 1331-32 (11th Cir.2005) (determining that an arbitration agreement\u2019s incorporation of arbitral forum rules, which specifically included a rule that the arbitrator shall have the power to decide issues of arbitrability, was clear and unmistakable evidence that the parties delegated arbitrability issues to an arbitrator); Apollo Computer, Inc. v. Berg, 886 F.2d 469, 473 (1st Cir.1989) (\u201cBy contracting to have all disputes resolved according to the Rules of the [International Chamber of Commerce] ..., [the plaintiff] agreed to be bound by [specific articles]. These provisions clearly and unmistakably allowfed] the arbitrator to determine her own jurisdiction when ... there exists a prima facie agreement to arbitrate whose continued existence and validity is being questioned.\u201d); cf. P&P Indus., Inc. v. Sutter Corp., 179 F.3d 861, 867-68 (10th Cir.1999) (\u201cA party who consents by contract to arbitration before the AAA also consents to be bound by the procedural rules of the AAA, unless that party indicates otherwise in the contract. By agreeing to arbitrate before the AAA, [the parties] impliedly agreed that they would be bound ... by the procedural rules of the AAA, including Rule 47(e) [which states that the parties consent to judicial confirmation of the disputed arbitration award].\u201d).\n{25} We also note that previous New Mexico cases have incorporated and given effect to the plain meaning of referenced rules in contractual agreements. See Christmas, 98 N.M. at 332, 648 P.2d at 790 (incorporating and giving effect to a specific article of a realtors\u2019 code of ethics, where the parties were both members of the same realtors association and had agreed to submit disputes to arbitration \u201cin accordance with the regulations of their board\u201d (internal quotation marks and citation omitted)); see also Monette v. Tinsley, 1999-NMCA-040, \u00b6\u00b6 15-17, 126 N.M. 748, 975 P.2d 361 (determining that an arbitration agreement\u2019s language that the parties were bound to arbitrate in accordance with the Commercial Arbitration Rules of the American Arbitration Forum indicated that these rules were considered the \u201cguiding substantive and procedural rules for the arbitration\u201d). In light of this overwhelming authority giving effect to rules referenced in contracts and specifically arbitration agreements, we conclude that the reference to the NAF Code of Procedure in the arbitration provision is further evidence that the parties clearly and unmistakably delegated arbitrability questions to an arbitrator.\n{26} Given the plain language of the arbitration provision and its incorporation of the NAF Code of Procedure, we hold that the parties in this case clearly and unmistakably delegated arbitrability questions to an arbitrator. For purposes of resolving the remaining issues in this appeal, we consider the delegation clause to be the following language in the first sentence of the arbitration provision in the parties\u2019 Loan Agreement:\nyou and we agree that any and all claims, disputes or controversies that we or our servicers or agents have against you or that you have against us ... that arise out of ... this Agreement to Arbitrate All Disputes, ... including disputes as to the matters subject to arbitration, shall be resolved by binding individual (and not class) arbitration by and under the Code of Procedure of the [NAF] in effect at the time the claim is filed.\nc. Felts Properly Challenged the Delegation Clause and, Therefore, the District Court Had Jurisdiction to Decide the Issue of Unconscionability\n{27} We next address Defendants\u2019 contention that because Felts did not specifically challenge the validity of the delegation clause in her amended complaint, the district court was precluded from deciding her claim that the arbitration provision was unconscionable due to the class action ban. Defendants argue that under the Supreme Court\u2019s decisions in Rent-A-Center and Buckeye, the district court had no option but to submit the unconscionability issue to an arbitrator along with Felts\u2019 underlying claims.\n{28} As we noted earlier, Felts\u2019 amended complaint focused primarily on challenging the legality of the Loan Agreements under New Mexico law. As the district court acknowledged at the hearing on CLK\u2019s motion to compel arbitration, Felts\u2019 complaint did not contain a specific challenge to the arbitration provision. It was only after CLK and CANI filed their respective motions to compel arbitration that Felts raised any specific challenges to the validity of the provision, arguing that the class action ban rendered the arbitration provision unconscionable and also that it was impossible to compel arbitration because the agreed-upon arbitral forum, the NAF, was precluded from handling consumer disputes. Defendants maintain that Felts\u2019 failure to challenge the arbitration provision in her complaint is similar to Buckeye, where the Supreme Court determined that because the \u201ccrux of the complaint\u201d challenged the contract as a whole and not the arbitration provision specifically, the validity of the provision was for an arbitrator to decide. See Buckeye, 546 U.S. at 444, 446, 126 S.Ct. 1204 (\u201c[B]ecause respondents challenge the [a]greement, but not specifically its arbitration provisions, those provisions are enforceable apart from the remainder of the contract. The challenge should therefore be considered by an arbitrator, not a court.\u201d). They further contend that under Rent-A-Center, Felts was required to have pleaded a specific challenge to the delegation clause in her complaint and her failure to do so meant that an arbitrator should have decided issues of arbitrability, rather than the court. In effect, Defendants urge us to look only at the substance of Felts\u2019 complaint and not her motion papers in deciding whether she challenged the delegation clause specifically such that the district court would be able to decide the challenge.\n{29} We disagree with Defendants and decline to adopt a narrow pleading rule requiring plaintiffs to plead a specific and distinct challenge to the validity of an arbitration provision in their complaints before a court may decide arbitrability issues. Although the Supreme Court may have considered only the \u201ccrux of the complaint\u201d in Buckeye, 546 U.S. at 444, 126 S.Ct. 1204, the Court looked beyond the complaint in Rent-A-Center when it examined whether the respondent there had raised a specific and distinct challenge to the delegation provision of the arbitration agreement at issue. In deciding the issue, the Court\u2019s opinion in Rentr-A-Center referenced the respondent\u2019s \u201cresponse to RenP-A-Center\u2019s motion to compel arbitration\u201d as well as his briefs to the Ninth Circuit and the Supreme Court on the issue and his oral argument before the Supreme Court. 130 S.Ct. at 2779-81. From the Court\u2019s analysis in Rent-A-Center, it appears that the Court was more concerned with the substantive nature of the respondent\u2019s claims and arguments and not with where he had argued those challenges. Id. We believe that the Ninth Circuit Court of Appeals, in Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., describes what the proper approach is in light of RenP-ACenter: \u201cBecause the material question is whether the challenge to the arbitration provision is severable from the challenge to the contract as a whole, the inclusion of, or failure to include, a specific challenge in the complaint is not determinative. What matters is the substantive basis of the challenge.\u201d Bridge Fund Capital Corp., 622 F.3d 996, 1001 (9th Cir.2010) (citations omitted). Accordingly, we consider not only Felts\u2019 complaint but also her motion papers and oral argument below to determine whether she raised a distinct challenge to the delegation clause that was severable from her challenges to the validity of the entire Loan Agreement.\n{30} We conclude that Felts made two distinct arguments regarding the validity of the delegation clause in her responses to CANI and CLK\u2019s respective motions to compel arbitration. First, because the delegation clause included a parenthetical prohibiting class arbitration (\u201cyou and we agree that any and all claims, disputes or controversies ... shall be resolved by binding individual (and not class) arbitration\u201d), Felts\u2019 argument that the ban on class actions rendered the arbitration provision unconscionable was directed to the delegation clause as well. Second, we conclude that her argument that performance of the delegation clause was rendered impossible under New Mexico law because the NAF had ceased its consumer arbitration business was also a specific challenge to the delegation clause, which assigned the NAF as the arbitral forum for resolving \u201cany and all disputes\u201d between the parties. These arguments were both clearly directed against the validity of the delegation clause alone, and were distinct from Felts\u2019 claims against the Loan Agreements under the UPA, SLA, etc.\n{31} The next step in our analysis, based on Rent-A-Center, is to determine whether Felts\u2019 specific challenges to the delegation clause, as described above, render that clause unenforceable under Section 2 of the FAA. See Rent-A-Center, 130 S.Ct. at 2778-79 (stating that delegation clauses are enforced under \u00a7 2 of the FAA and are therefore valid \u201csave upon such grounds as exist at law or in equity for the revocation of any contract;\u201d further stating that unless a delegation clause is specifically challenged and found to be unenforceable, courts must treat it \u201cas valid under \u00a7 2, and must enforce it under \u00a7\u00a7 3 and 4, leaving any challenge to the validity of the [a]greement as a whole for the arbitrator\u201d).\n{32} In this case, we have concluded that Felts\u2019 argument under Fiser that the class action ban in the arbitration provision was substantively unconscionable was directed to the delegation clause as well. When Felts challenged the class action ban in the proceedings below, she indicated that the class action ban was mentioned three times in the arbitration provision \u2014 including the parenthetical in the delegation clause \u2014 and she argued that all three of these prohibitions against class relief were unconscionable and unenforceable under our Supreme Court\u2019s rationale in Fiser. Therefore, when the district court held that these \u201cprohibitions against class relief\u2019 were unconscionable and unenforceable under Fiser, its holding included an implicit finding that the class action ban in the delegation clause was also unconscionable, thereby rendering it invalid under Section 2 of the FAA.\n{33} With this framework in mind, we turn to address whether the district court\u2019s application of Fiser to this case was proper, and we clarify that our discussion below extends to the validity of the delegation clause as well. For reasons that become apparent, we do not reach Felts\u2019 second argument targeting the validity of the delegation clause based on the unavailability of the NAF as the arbitral forum.\n2. Unconscionability Analysis\n{34} We next address Defendants\u2019 contention that the district court erroneously determined that the class action ban in the arbitration provision was unconscionable under our Supreme Court\u2019s holding in Fiser. Specifically, the district court found that Felts\u2019 claims constituted \u201csmall consumer claims within the meaning of Fiser\u201d and \u201c[a]s such, [the] prohibitions against class relief [in the arbitration provisions were] contrary to New Mexico\u2019s fundamental public policy of encouraging the resolution of small consumer claims.\u201d\n{35} \u201cUnconscionability is an equitable doctrine, rooted in public policy, which allows courts to render unenforceable an agreement that is unreasonably favorable to one party while precluding a meaningful choice of the other party.\u201d Cordova, 2009-NMSC-021, \u00b6 21, 146 N.M. 256, 208 P.3d 901. Contractual unconscionability consists of two types: substantive and procedural. Id. \u201cSubstantive unconscionability relates to the content of the contract terms and whether they are illegal, contrary to public policy, or grossly unfair.\u201d Fiser, 2008-NMSC-046, \u00b6 20, 144 N.M. 464, 188 P.3d 1215. \u201cProcedural unconscionability is determined by analyzing the circumstances surrounding the contract\u2019s formation, such as whether it was an adhesive contract and the relative bargaining power of the parties.\u201d Id. In this case, the district court did not address procedural unconscionability, nor did the parties argue it below; therefore, our review is limited to the district court\u2019s determination that the arbitration provision was substantively unconscionable on public policy grounds.\n{36} Because Defendants\u2019 primary argument on appeal is that Fiser is factually distinguishable from this case in a number of ways, we begin our analysis by summarizing the Supreme Court\u2019s decision in Fiser. In Fiser, our Supreme Court addressed whether an arbitration provision in a computer purchase agreement was unconscionable and unenforceable under New Mexico law because it banned any form of class action relief. Id. \u00b6\u00b6 12-22. The ease involved a putative class action lawsuit filed against a computer manufacturer for misrepresentation in the sale of computers, where each similarly situated customer suffered damages of less than twenty dollars. Id. \u00b6\u00b6 2-4. The district court granted the computer manufacturer\u2019s motion to compel arbitration, agreeing that under the terms of a binding arbitration clause in the plaintiffs computer purchase agreement, the plaintiff was not permitted to seek class action relief and was instead required to arbitrate all disputes. Id. \u00b6\u00b6 4-5. The Supreme Court reversed after concluding that the class action ban in the agreement was contrary to New Mexico\u2019s public policy because \u201c[t]he opportunity for class relief and its importance to consumer rights is enshrined in the fundamental policy of New Mexico and evidenced by our statutory scheme.\u201d Id. \u00b6\u00b6 5, 13. Recognizing that it is fundamental New Mexico policy that consumers have a viable mechanism for dispute resolution, no matter the size of the claim, the Court reasoned that the class action mechanism is an important device for providing consumers with a meaningful remedy in small consumer cases where the \u201ccost of bringing a single claim is greater than the damages alleged.\u201d Id. \u00b6\u00b6 9, 15. Applying this rationale to the arbitration provision at issue, the Court held:\nBy preventing customers with small claims from attempting class relief and thereby circumscribing their only economically efficient means for redress, [the defendant\u2019s class action ban exculpates the company from wrongdoing. Denial of a class action in cases where it is appropriate may have the effect of allowing an unscrupulous wrongdoer to retain the benefits of its wrongful conduct. On these facts, enforcing the class action ban would be tantamount to allowing [the defendant to unilaterally exempt itself from New Mexico consumer protection laws____ Because it violates public policy by depriving small claims consumers of a meaningful remedy and exculpating [the defendant from potential wrongdoing, the class action ban meets the test for substantive unconscionability.\nId. \u00b6 21 (internal quotation marks and citation omitted).\n{37} Defendants argue that Fiser is factually distinguishable from this ease because Felts\u2019 claims do not constitute \u201csmall consumer claims\u201d within the meaning of Fiser. In support of this argument, Defendants refer us to the $3,900 in damages Felts is seeking, an amount they contend is over two hundred times greater than the ten to twenty dollars at issue in Fiser. We are unpersuaded because we do not view Fiser as setting a numerical bar for what constitutes a small consumer claim; rather, the Court there was concerned with circumstances where \u201cthe cost of bringing a single claim is greater than the damages alleged.\u201d Id. \u00b6 15. It is under these specific circumstances that the Court viewed class actions to \u201cfunction[] as a gatekeeper to relief\u2019 and to provide small claims plaintiffs with \u201cthe right of access to the courts\u201d to seek \u201ca meaningful remedy for one\u2019s claims.\u201d Id. Applying this reasoning to the facts of that case, the Court concluded that it did not need to engage in extensive fact-finding to ascertain whether the plaintiff had met his \u201cevidentiary burden of proving that his damages [we]re outweighed by the cost of bringing an individual claim.\u201d Id. \u00b6 17. Instead, given the \u201cscant\u201d amount of damages being sought, the Court determined that \u201c[i]n light of attorney[ ] fees, the costs of gathering evidence and preparing the case,\u2019 and the time spent educating himself on the issues and organizing and presenting the claim, the likelihood that [the p]laintiff s actual costs [would] exceed [the amount of damages alleged] is certain.\u201d Id. \u00b6\u00b6 3,17. Thus, although it was presented in Fiser with a scenario where it was virtually certain that costs would outweigh the amount of damages alleged, the Supreme Court nevertheless indicated that evidentiary fact-finding should occur on this issue. Id. We take this opportunity to clarify that, within the meaning of Fiser, district courts are required to determine whether a plaintiffs costs in bringing an individual claim outweigh the amount of damages alleged, such that a meaningful remedy for the plaintiffs claims is. only available through class action relief. The plaintiff bears the evidentiary burden on this issue.\n{38} In this case, therefore, the issue before the district court was not whether the actual amount of damages alleged by Felts exceeded the ten to twenty dollar amount in Fiser, but whether the costs of bringing an individual claim would exceed the amount of damages she had alleged within the meaning of Fiser. Though the district court determined that it did not need to undertake an evidentiary hearing on the issue, it nevertheless entered a factual finding that \u201cthe amounts at issue here fall within the small consumer claims as envisioned by Fiser.\u201d It is apparent from the hearing transcript that the court considered the evidence introduced by Felts on the issue, and we review whether substantial evidence exists to support the court\u2019s factual determination.\n{39} Our review of the record indicates that substantial evidence supports the district court\u2019s finding that Felts brought a small consumer claim within the meaning of Fiser. Felts submitted twelve different affidavits from attorneys, including two former New Mexico attorneys general, all of which highlighted the numerous costs and perceived difficulties of pursuing an individual claim against Defendants. The affidavits also contained evidence that the class action ban in the arbitration provision acted as an exculpatory clause for Defendants because it was economically unfeasible to bring an individual claim against Defendants otherwise. The attorneys stated that they would not agree to represent a plaintiff in an individual action involving the amount of damages alleged by Felts given the costs and the complexity of the claims at issue, and that they were not aware of any New Mexico attorney who would agree to bring such a lawsuit on an individual basis. We think it is significant that Defendants had the opportunity to, but did not, submit any counter evidence indicating that the class action ban was not exculpatory or that it was economically feasible for Felts to bring her claim individually. We conclude that substantial evidence exists showing that the likelihood that Felts\u2019 costs will exceed her damages is reasonably certain and, therefore, she has brought a \u201csmall consumer claim\u201d within the meaning of Fiser.\n{40} Defendants also argue that Fiser is distinguishable because Felts has raised statutory claims under the UPA which allow her to recover attorney fees and costs in the event she is successful in arbitrating her claims. We are not persuaded by this argument because Fiser also involved a UPA claim and the Supreme Court nevertheless determined that the class action ban in the arbitration agreement was unconscionable for public policy reasons. Fiser, 2008-NMSC-046, \u00b6\u00b6 2, 5, 144 N.M. 464, 188 P.3d 1215. Accordingly, we affirm the district court\u2019s determination that the class action ban in the arbitration provision was substantively unconscionable within the meaning of Fiser and was, therefore, unenforceable.\n3. Severability\n{41} Lastly, we address Defendants\u2019 contention that the district court erroneously determined that the entire arbitration provision was unenforceable rather than severing the unconscionable class action ban from the arbitration provision and enforcing the remainder. In cases where a provision of a contract is determined to be unconscionable, \u201ca court may refuse to enforce the contract, or may enforce the remainder of the contract without the unconscionable term, or may so limit the application of any unconscionable term as to avoid any unconscionable result.\u201d Padilla v. State Farm Mut. Auto. Ins. Co., 2003-NMSC-011, \u00b6 15, 133 N.M. 661, 68 P.3d 901.\n{42} We hold that the district court properly determined that the class action ban was not severable from the rest of the arbitration provision because we conclude that the class action ban was central to the means by which the parties could resolve their disputes under this particular arbitration provision. See Fiser, 2008-NMSC-046, \u00b6 24, 144 N.M. 464, 188 P.3d 1215 (determining that an unconscionable class action ban could not be severed from an arbitration agreement because \u201cthe class action ban is part of the arbitration provision and is central to the mechanism for resolving the dispute between the parties\u201d); see also Cordova, 2009-NMSC-021, \u00b6 40, 146 N.M. 256, 208 P.3d 901 (refusing to sever unconscionable portions of an arbitration agreement because these provisions were \u201ccentral to the original mechanisms for resolving disputes between the parties\u201d). The class action ban was mentioned several times throughout the arbitration provision and then reinforced again within the separate class action waiver provision; it is clear that it was a key limitation to the mechanisms by which the parties could resolve their disputes. Cf. Padilla, 2003-NMSC-011, \u00b6 18, 133 N.M. 661, 68 P.3d 901 (relying on guidance from other jurisdictions and severing an unconscionable de novo appeals clause from an insurance contract because the appeals clause was \u201cseparate and distinct\u201d from the arbitration provision and did not affect the \u201cgeneral conduct of the arbitration itself\u2019 (internal quotation marks and citations omitted)). Moreover, we see no indication that Defendants have ever disputed that the class action ban is not a key limitation under the terms of the arbitration provision; rather, they have consistently maintained that class-based relief is not available to any party under the provision. Under Fiser and Cordova, therefore, the district court correctly found that severance was not an available remedy.\n{43} We note that CANI argues that the class action waiver provision, which is separate and distinct from the class action ban in the arbitration provision, evidences the parties\u2019 intent that class action waivers are not \u201ccentral to the pai'ties\u2019 bargain.\u201d The class action waiver provision states that \u201c[t]o the extent permitted by law [the borrower] will not bring, join or participate in any class action as to any claim, dispute or controversy [the borrower] may have against [the lender].\u201d (Emphasis added.) CANI contends that this language is \u201cclear evidence of the parties\u2019 intent that the class action waiver would ... only be enforced by the arbitrator \u2018to the extent permitted by law\u2019 [and t]hus, the parties\u2019 ... desired arbitration to proceed even if the class action waiver were not permitted by law.\u201d In support, CANI cites to out-of-state authority where a class action ban was severed from an arbitration agreement because the class action ban clause contained a savings clause banning class actions \u201cunless your state\u2019s laws provide otherwise.\u201d See Kristian v. Comcast Corp., 446 F.3d 25, 61-62 (1st Cir.2006) (emphasis omitted) (internal quotation marks omitted).\n{44} However, even if we were to agree with CANI that the phrase \u201cto the extent permitted by law\u201d indicates that the parties contemplated severability of the class action ban, we determine that severing the class action ban in this case would excise major portions of the arbitration provision in a manner that would lead to the very type of \u201cjudicial surgery\u201d that our Supreme Court warned against in Cordova. See Cordova, 2009-NMSC-021, \u00b6 40, 146 N.M. 256, 208 P.3d 901 (\u201cWe are reluctant to try to draft an arbitration agreement [that] the parties did not agree on____[W]e must strike down the arbitration clause in its entirety to avoid a type of judicial surgery that inevitably would remove provisions that were central to the original mechanisms for resolving disputes between the parties.\u201d (citation omitted)). This is a legitimate policy concern that was also acknowledged by the out-of-state authority cited by CANI. Kristian, 446 F.3d at 62 (noting that courts typically prefer \u201cdeclaring an arbitration agreement unenforceable rather than using severance as a remedy when fundamental elements of the arbitration regime are at issue\u201d and that severing the class arbitration bar would be \u201cdifficult to justify\u201d absent a savings clause). We follow this policy rationale and uphold the district court\u2019s determination that the class action ban could not be severed from the arbitration provision and thus, the entire arbitration provision was unenforceable.\nCONCLUSION\n{45} For the foregoing reasons, we affirm the district court\u2019s orders denying Defendants\u2019 motions to compel arbitration.\n{46} IT IS SO ORDERED.\nWE CONCUR: JONATHAN B. SUTIN and RODERICK T. KENNEDY, Judges.\n. We note that two of the Loan Agreements contained identical arbitration provisions. The third Agreement, a loan issued by Ameriloan, differed slightly in its language and organization. The most notable difference is that in addition to the all-caps sentence prohibiting class-based arbitration seen in the other two Loan Agreements, the Ameriloan agreement included the following:\n\"No class arbitration. All disputes including any Representative Claims against us and/or related third parties shall be resolved by binding arbitration only on an individual basis with you.\u201d However, these differences are not material to our discussion as the substantive nature of the Ameriloan Agreement is virtually identical to that of the other two Loan Agreements.\n. Rule 20 of the NAF Code of Procedure provides: \"An Arbitrator shall have the power to rule on all issues, [c]laims, [rjesponses, questions of arbitrability, and objections regarding the existence, scope, and validity of the [a]rbitration [agreement including all objections relating to jurisdiction, unconscionability, contract law, and enforceability of the Arbitration Agreement.\u201d", "type": "majority", "author": "FRY, Judge." } ], "attorneys": [ "Feferman Warren & Tremen, P.A., Rob Treinen, Albuquerque, NM, Schaefer Law Firm, L.L.C., Richard J. Fuller, Douglas L. Micko, Minneapolis, MN, Public Justice, P.C., F. Paul Bland, Jr., Amy Radon, Washington, D.C., for Appellee.", "Fredericks Peebles & Morgan LLP, Conly J. Schulte, Joseph V. Messineo, Omaha, NE, Fredericks Peebles & Morgan LLP, Frances C. Bassett, Louisville, CO, for Appellant CLK Management, Inc. J7k/a Bat Services, Inc.", "Modrall, Sperling, Roehl, Harris & Sisk, P.A., Jennifer G. Anderson, Emil J. Kiehne, Albuquerque, NM, Weir & Partners, LLP, Susan Verbonitz, Philadelphia, PA, for Appellant Cash Advance Network, Inc.", "Gary K. King, Attorney General, Karen J. Myers, Assistant Attorney General, Santa Fe, NM, for Amicus Curiae." ], "corrections": "", "head_matter": "2011-NMCA-062\n254 P.3d 124\nAndrea J. FELTS, on behalf of herself and all others similarly situated, Plaintiff-Appellee, v. CLK MANAGEMENT, INC. f/k/a Bat Services, Inc. and Cash Advance Network, Inc., Defendants-Appellants.\nNos. 30,142, 29,702.\nCourt of Appeals of New Mexico.\nApril 8, 2011.\nCertiorari Granted, June 8, 2011, Nos. 33,011, 33,013.\nFeferman Warren & Tremen, P.A., Rob Treinen, Albuquerque, NM, Schaefer Law Firm, L.L.C., Richard J. Fuller, Douglas L. Micko, Minneapolis, MN, Public Justice, P.C., F. Paul Bland, Jr., Amy Radon, Washington, D.C., for Appellee.\nFredericks Peebles & Morgan LLP, Conly J. Schulte, Joseph V. Messineo, Omaha, NE, Fredericks Peebles & Morgan LLP, Frances C. Bassett, Louisville, CO, for Appellant CLK Management, Inc. J7k/a Bat Services, Inc.\nModrall, Sperling, Roehl, Harris & Sisk, P.A., Jennifer G. Anderson, Emil J. Kiehne, Albuquerque, NM, Weir & Partners, LLP, Susan Verbonitz, Philadelphia, PA, for Appellant Cash Advance Network, Inc.\nGary K. King, Attorney General, Karen J. Myers, Assistant Attorney General, Santa Fe, NM, for Amicus Curiae." }, "file_name": "0681-01", "first_page_order": 707, "last_page_order": 723 }