Feeney v. Dell Inc.
989 N.E.2d 439
Mass.2013Background
- Feeney and Dedham Health sued Dell in 2003, alleging Dell charged a state tax on optional service contracts in violation of G. L. c. 93A.
- Dell moved to compel arbitration under its terms, which required individual arbitration and barred class actions.
- Arbitration proceeded; arbitrator denied class certification and ruled in Dell's favor on the merits; claims dismissed with prejudice.
- Feeney I invalidated the arbitration clause, holding class-action waiver contravened Massachusetts public policy and should be voided.
- Concepcion (2011) held FAA preempts California Discover Bank rule, limiting state unconscionability defenses to invalidate arbitration for class waivers where class relief is needed to vindicate federal rights.
- On remand, the court evaluated whether Concepcion allows invalidating the Dell clause when the class waiver effectively eliminates remediability for state-law claims, and whether Randolph-style nonremediability can survive under state law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Concepcion preempt invalidating a class waiver in state consumer arbitration? | Feeney contends Concepcion does not allow voiding a class waiver where it denies remediability. | Dell argues Concepcion precludes state-law unconscionability defenses to invalidate class waivers in consumer arbitration. | Concepcion precludes automatic invalidation; but fails to foreclose case-specific nonremediability findings. |
| May a state court void an arbitration agreement with a class waiver if it renders claims nonremediable under state law? | Plaintiffs show they cannot pursue their 93A claims via individual arbitration under the terms. | Arbitration agreements should be enforced per FAA savings clause unless preempted. | Yes, where nonremediability is shown; the clause may be invalidated despite FAA principles. |
| What burden of proof governs nonremediability under Randolph after Concepcion? | Plaintiffs must prove the arbitration terms foreclose meaningful individual relief. | Defendant bears burden to show viability of individual arbitration under FAA. | Plaintiffs satisfied burden on remand; the Dell clause provides de facto immunity for state-law claims. |
| Is Feeney I still viable post-Concepcion? | Feeney I’s rationale against class waivers remains persuasive where they immunize from private liability. | Concepcion undermines Feeney I's core rationale by limiting state defenses to enforce arbitration. | Feeney I is partially viable; arbitration may be invalidated when the class waiver causes nonremediability conflicting with FAA. |
| Should the arbitration agreement be invalidated entirely or severed to permit court-ordered relief? | Class waiver destroys remedial framework; complete invalidation is warranted. | Inability to class-arbitrate should not undermine overall arbitration framework; severance could suffice. | Arbitration agreement invalidated in full to allow remediable litigation pathway. |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. (2011)) (FAA preempts state Discover Bank rule; class waivers not per se enforceable)
- Feeney v. Dell Inc., 454 Mass. 192 (Mass. 2009) (Massachusetts public policy favors class actions; initial invalidation of arbitration clause)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (U.S. (2010)) (Class arbitration requires contractual basis; cannot compel absent consent)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. (1985)) (Arbitration of statutory claims permitted; remedies may be arbitral if effectively vindicated)
- Randolph v. Green Tree Financial Corp., 531 U.S. 79 (U.S. (2000)) (Costs of arbitration as a factor in enforceability; vindication of rights in arbitral forum)