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Dale Mortensen v. Bresnan Communications
722 F.3d 1151
9th Cir.
2013
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Background

  • Arbitration clause in Bresnan service agreement governs disputes with customers in Montana.
  • Contract is adhesive; New York law chosen for arbitration substantive issues, with New York/federal law governing arbitration process.
  • District court declined to enforce arbitration and applied Montana public policy forcing litigation, citing Montana reasonable expectations/fundamental rights rule.
  • NebuAd trial raised privacy/advertising issues; Bresnan argued for arbitration under FAA preemption.
  • Concepcion (2011) and Marmet (2012) guide FAA preemption scope, potentially displacing state defenses that undermine arbitration.
  • This appeal reviews FAA preemption of Montana rule and appropriate choice-of-law after preemption.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Montana rule is preempted by FAA. Mortensen argues Montana rule structurally disfavours arbitration. Bresnan argues rule protects public policy but is narrowly applied. FAA preempts the Montana rule.
What law applies to the arbitration agreement after preemption. New York law should apply per choice-of-law clause. Montana policy should govern due to greater local interest. New York law applies to the arbitration agreement.

Key Cases Cited

  • Concepcion, 131 S. Ct. 1740 (U.S. 2011) (FAA preemption of state defense that disfavored arbitration; savings clause limited)
  • Marmet Health Care Center, Inc. v. Brown, 132 S. Ct. 1201 (U.S. 2012) (FAA preempts state rules that prohibit arbitration of certain claims)
  • Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468 (U.S. 1989) (FAA policy to enforce arbitration agreements over general contract defenses)
  • Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (U.S. 1967) (Savings clause preserves generally applicable defenses to arbitration)
  • Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (Federal policy favoring arbitration)
Read the full case

Case Details

Case Name: Dale Mortensen v. Bresnan Communications
Court Name: Court of Appeals for the Ninth Circuit
Date Published: Jul 15, 2013
Citation: 722 F.3d 1151
Docket Number: 11-35823
Court Abbreviation: 9th Cir.