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U.S. Supreme Court grants cert. in class arbitration case: AT&T Mobility LLC v. Concepcion

By Kimberly A. Kralowec

Last week, on May 24, 2010, the U.S. Supreme Court granted cert. in AT&T Mobility LLC v. Concepcion, no. 09-893. 

The Ninth Circuit's opinion in this case was Laster v. AT&T Mobility LLC, 584 F.3d 849 (2009), affirming an order striking down a no-class-action arbitration provision as unconscionable under California law (namely, Discover Bank).  (See my very brief blog post on the case from last October.) 

This is the question presented as stated in the cert. petition:

Whether the Federal Arbitration Act preempts States from conditioning the enforcement of an arbitration agreement on the availability of particular procedures--here, class-wide arbitration--when those procedures are not necessary to ensure that the parties to the arbitration agreement are able to vindicate their claims.

In other words, does the FAA preempt state-law unconscionability principles as applied to no-class-action arbitration clauses in consumer contracts of adhesion? 

The briefs have been collected at ScotusBlog (scroll down). Of particular interest is a short supplemental brief filed by the respondents (i.e., the consumers) on Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. ___ (Apr. 27, 2010):

Stolt-Nielsen concerned whether parties could be compelled to arbitrate on a classwide basis where they had not agreed to do so. That issue is not remotely present in this case, and does not bear on the question presented. Here, there is no dispute that AT&T?s agreement forecloses all classwide proceedings. The issue here is not (as in Stolt-Nielsen) whether a party may be compelled to participate in class arbitration in the face of an agreement that does not authorize it, but rather whether the agreement itself may be held invalid, under generally applicable state contract law, because it excludes class remedies. See 9 U.S.C. § 2 (arbitration agreements are valid and enforceable, ?save upon such grounds as exist in law or equity for the revocation of any contract?).

Supp. Brief of Respondents, May 7, 2010, at 1. 

Full post as published by The UCL Practitioner on June 02, 2010 (boomark / email).