AT&T Mobility v. Concepcion

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AT&T Mobility v. Concepcion
Seal of the United States Supreme Court.svg
Argued November 9, 2010
Decided April 27, 2011
Full case name AT&T Mobility LLC, Petitioner v. Vincent Concepcion, et ux.
Docket nos. 09-893
Citations 563 U.S. 321 (more)
131 S. Ct. 1740
Prior history Motion to compel arbitration denied sub nom. Laster v. T-Mobile USA, Inc., 2008 WL 5216255 (S.D. Cal., 2008); affirmed sub nom. Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir., 2009); certiorari granted, 560 U. S. ___ (2010)
Holding
The Discover Bank test adopted by California to invalidate certain arbitration agreements with class action waivers is preempted by the Federal Arbitration Act.
Court membership
Case opinions
Majority Scalia, joined by Roberts, Kennedy, Thomas, Alito
Concurrence Thomas
Dissent Breyer, joined by Ginsburg, Sotomayor, Kagan
Laws applied
Federal Arbitration Act

AT&T Mobility v. Concepcion, 563 U.S. 321 (2011), is a legal dispute that was decided by the United States Supreme Court.[1][2] On April 27, 2011, the Court ruled, by a 5–4 margin, that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-wide arbitration, such as the law previously upheld by the California Supreme Court in the case of Discover Bank v. Superior Court.[3] By permitting contracts that exclude class action arbitration, the high court's decision will make it much harder for consumers to file class action lawsuits.[4][5][6][7]

Background[edit]

In 2006, Vincent and Liza Concepcion sued AT&T Mobility over their mobile phone contract, contending that the cell phone company had engaged in deceptive advertising by falsely claiming that their wireless plan included free cell phones. Their suit became a class action. AT&T asked the U.S. District Court for Southern California to dismiss the suit, because in their contract with the company, the Concepcions had agreed to use an individual arbitration process, rather than filing any class action lawsuits. The district court declined to dismiss the suit, ruling that California law prohibits contracts that unfairly exculpate one party from its wrongdoing, such as clauses that do not allow class action lawsuits in consumer adhesion contracts where the individual damages are small. AT&T appealed the case, saying that the Federal Arbitration Act should preempt state law. On October 27, 2009, the Ninth Circuit Court of Appeals upheld the lower court decision. AT&T, represented by Andrew J. Pincus of Mayer Brown, then appealed to the Supreme Court.[4][5] After the Supreme Court granted review, appellate lawyer Deepak Gupta of Washington, D.C. was brought in to represent the Concepcions.

The Court heard oral arguments on November 9, 2010.[2][8] Justices Scalia and Sotomayor questioned Pincus (attorney for AT&T Mobility) about when unconscionability doctrines are made under state law.[9] Pincus argued that the California law was not being applied uniformly. Scalia challenged that assertion when he asked, "Are we going to tell the State of California what it has to consider unconscionable?".[10] Other justices questioned different procedural issues arising from the unconscionability discussion and the scope of the rule AT&T was proposing. Deepak Gupta, representing the Concepcions, argued that the contract AT&T imposed on Respondents was clearly unfair. He asserted that state law should be a guidepost in these questions. Some of his arguments drew criticism from Chief Justice John Roberts. Gupta concluded by arguing that California "has made a judgment that if you preclude class-wide relief... that will gut the State's substantive consumer protection laws..."[10]

Opinion of the Court[edit]

The majority opinion was written by Justice Antonin Scalia, and joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito. "Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration," Scalia wrote. "We find it hard to believe that defendants would bet the company with no effective means of review, and even harder to believe that Congress would have intended to allow state courts to force such a decision."[6][7] Justice Scalia focused on the impact California's unconscionability law was having on arbitration clauses - since the rule was invalidating a large proportion of arbitration agreements, the rule must violate the policy in favor of arbitration.[11] Therefore, it was preempted by the FAA.

The dissent was written by Justice Stephen Breyer, and joined by Justices Ruth Bader Ginsburg, Sonia Sotomayor, and Elena Kagan. Breyer stated that class arbitrations are appropriate ways to resolve claims that are minor individually but significant in the aggregate. "Where does the majority get its contrary idea — that individual, rather than class, arbitration is a fundamental attribute of arbitration?" He said that without class actions, minor frauds would not be remedied. "What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?"[6][7]

References[edit]

  1. ^ "AT&T Mobility LLC, Petitioner v. Vincent Concepcion, et ux.". Supreme Court of the United States web site. Archived from the original on 27 September 2010. Retrieved November 8, 2010. 
  2. ^ a b "AT&T Mobility v. Concepcion". SCOTUSblog. Archived from the original on 11 November 2010. Retrieved November 8, 2010. 
  3. ^ Slip Opinion. Retrieved April 27, 2011.
  4. ^ a b Lazarus, David (November 5, 2010). "Consumers' Right to File Class Actions is in Danger". Los Angeles Times. Archived from the original on 7 November 2010. Retrieved November 8, 2010. 
  5. ^ a b Fitzpatrick, Brian T. (November 7, 2010). "Supreme Court Case Could End Class-Action Suits". San Francisco Chronicle. Archived from the original on 10 November 2010. Retrieved November 8, 2010. 
  6. ^ a b c Liptak, Adam (April 27, 2011). "Supreme Court Allows Contracts That Prohibit Class-Action Arbitration". New York Times. Archived from the original on 29 April 2011. Retrieved April 28, 2011. 
  7. ^ a b c Savage, David G. (April 28, 2011). "Companies Can Block Customers' Class-Action Lawsuits, Supreme Court Rules". Los Angeles Times. Retrieved April 28, 2011. 
  8. ^ Liptak, Adam (November 9, 2010). "Supreme Court Weighs Class-Action Suits". New York Times. Archived from the original on 11 November 2010. Retrieved November 10, 2010. 
  9. ^ Howe, Amy (November 10, 2010). "Argument Recap: AT&T v. Concepcion". SCOTUSblog. Archived from the original on 10 January 2011. Retrieved December 28, 2010. 
  10. ^ a b "Oral Argument Transcript: AT&T Mobility LLC, Petitioner, v. Vincent Concepcion, et. ux.". November 9, 2010. Retrieved December 28, 2010. 
  11. ^ Tracey, Ann Marie; McGill, Shelley (2012). "Seeking a Rational Lawyer for Consumer Claims After the Supreme Court Disconnects Consumers in AT&T Mobility LLC v. Concepcion". Loyola of Los Angeles Law Review 45: 435–475, 454.