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