AT&T Mobility LLC v. Concepcion

Case Updates

The U.S. Supreme Court overturned a Ninth Circuit decision that class action waivers in arbitration agreements are not enforceable under California law. The Supreme Court’s ruling once again vindicates the primacy of federal arbitration laws over inconsistent state laws that attempt to limit the availability of private arbitration as a fast, fair, and efficient alternative to costly litigation in the courts. The Supreme Court found that California’s Discover Bank rule, which found an arbitration provision unconscionable because it disallowed classwide proceedings, is preempted by the Federal Arbitration Act.

NCLC urged the Supreme Court to uphold a class arbitration waiver contained in AT&T Mobility's customer agreement. Plaintiffs accuse AT&T of defrauding consumers when it charged tax for a phone described to be “free.” In exchange for the phone, consumers signed the customer agreement featuring the class arbitration waiver. The Ninth Circuit held that the class arbitration waiver was unconscionable and reasoned that class arbitration must be available to deter unlawful conduct. In its brief, NCLC argued that class arbitration does not deter misconduct, but rather forces parties into costly litigation. NCLC also argued that California's unconscionability doctrine for class arbitration waivers is preempted by the Federal Arbitration Act. NCLC warned that the Ninth Circuit's decision redefines arbitration and compels businesses to engage in expensive court battles.

Click here to view the Chamber's brief.