Supreme Court Hears Argument in Significant Consumer Arbitration Case

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On November 9, 2010, the U.S. Supreme Court heard the much-anticipated oral argument in AT&T Mobility LLC v. Concepcion. The Concepcions, who entered into a wireless service contract with AT&T, filed a class action against the company in 2006 alleging various violations of California’s consumer protection statutes. AT&T moved to compel individual arbitration of the dispute pursuant to the contract’s arbitration agreement, which contained a class action waiver. The U.S. District Court for the Southern District of California denied the motion, finding the agreement unconscionable under California law because it precluded class actions. The Ninth Circuit affirmed. Certiorari was granted to decide “[w]hether the Federal Arbitration Act [“FAA”] preempts States from conditioning the enforceability 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.” Sutherland’s Legal Alert on the grant of certiorari is available here.

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