Coneff v. AT & T CORP.
2012 U.S. App. LEXIS 5520
| 9th Cir. | 2012Background
- Plaintiffs are current and former AT&T customers from eight states bringing a putative nationwide class action.
- Arbitration clause in service agreements requires individualized arbitration and prohibits class actions/arbitrations.
- District court applied Washington law and held the class-action waiver substantively unconscionable, voiding the arbitration agreement.
- AT&T moved to compel arbitration; district court denied, assuming FAA did not preempt state unconscionability.
- This court now holds Concepcion preempts Washington’s unconscionability ruling, reversing the district court’s substantive ruling and remanding for procedural unconscionability/choice-of-law analysis.
- The case may involve multiple states’ choice-of-law rules; remand to address any actual conflicts among state procedural unconscionability standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA preempts state unconscionability law on class-action waivers. | Concepcion controls; FAA preempts state rule. | State law can invalidate class-action waivers. | FAA preempts; class-action waiver not substantively unconscionable. |
| Whether procedural unconscionability and choice of law require further conflict-of-law analysis on remand. | States may address adhesion and procedural issues. | Choose-law conflicts must be identified and resolved on remand. | Remand to apply Washington choice-of-law rules for procedural unconscionability. |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (Sup. Ct. 2011) (FAA preempts state rule against class-action waivers in consumer arbitration)
- Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir. 2009) (FAA preemption of state unconscionability rule questioned by Concepcion)
- Green Tree Financial Corp.-Ala. v. Randolph, 531 U.S. 79 (Sup. Ct. 2000) (fee costs can affect vindication of rights; discussed in context of arbitration)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (Sup. Ct. 1985) (vindication of statutory rights and arbitration)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (Sup. Ct. 1991) (arbitration of statutory rights; contract defenses apply)
- Discover Bank v. Superior Court, 36 Cal.4th 148 (Cal. 2005) (state unconscionability rule for class waivers (discussed and distinguished))
- Cruz v. Cingular Wireless, LLC, 648 F.3d 1205 (11th Cir. 2011) ( Eleventh Circuit applied Concepcion to distinguish vindication concerns)
- Scott v. Cingular Wireless, 160 Wash.2d 843, 161 P.3d 1000 (Wash. 2007) (Washington rule on unconscionability of class-action waivers)