Marcus Roberts v. At&t Mobility LLC
877 F.3d 833
| 9th Cir. | 2017Background
- Plaintiffs (Roberts, Cheweys, Krenn) are AT&T wireless customers who signed service contracts containing arbitration clauses and sued in putative class action alleging AT&T falsely advertised “unlimited” data but throttled speeds after secret caps.
- AT&T moved to compel arbitration under the Federal Arbitration Act (FAA); Plaintiffs opposed asserting a First Amendment Petition Clause challenge and argued they did not knowingly waive court access.
- The district court compelled arbitration, concluding there was no state action and therefore did not reach the constitutional merits; it certified the order for interlocutory appeal under 28 U.S.C. § 1292(b).
- On appeal Plaintiffs raised two theories for state action: (1) Denver Area creates state action whenever a direct constitutional challenge targets a permissive statute; and (2) the FAA and Supreme Court decisions “encourage” arbitration such that private arbitration clauses are attributable to the state.
- The Ninth Circuit reviewed de novo, held Plaintiffs failed to show AT&T’s conduct was attributable to the state, rejected both theories, and affirmed the order compelling arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a direct constitutional challenge to a permissive federal statute (FAA) makes the government the relevant state actor | Denver Area means state action exists when a plaintiff directly challenges a permissive statute, so private actors need not be shown to be state actors | Precedent (Lugar, Flagg Bros., American Mfrs.) requires showing private party conduct is fairly attributable to the state | Rejected; Denver Area is narrow and does not eliminate the Lugar two‑part test; plaintiffs must show the private party is a state actor |
| Whether judicial enforcement of arbitration agreements constitutes state action | Judicial enforcement of the FAA and Supreme Court interpretations transform private arbitration into state action | Judicial enforcement alone does not convert private contractual arbitration into state action (controlling precedent) | Rejected; judicial enforcement does not by itself constitute state action |
| Whether the FAA and Supreme Court decisions sufficiently “encourage” arbitration to render private parties state actors under the encouragement/close‑nexus test | The FAA and decisions like Concepcion created strong governmental preference that effectively compelled firms to adopt arbitration clauses, so the State is responsible | The FAA places arbitration on equal footing and does not wield coercive power or provide significant encouragement comparable to Skinner; mere permission or subtle encouragement is insufficient | Rejected; no sufficiently close nexus or coercive/encouraging state action was shown |
| Whether the First Amendment Petition Clause claim can be reached absent state action | Plaintiffs asked the court to address the Petition Clause infringement resulting from compelled arbitration | Defendant: threshold state action requirement not met, so constitutional claim fails for lack of state action | Court did not reach Petition Clause merits; claim fails at threshold because no state action was shown |
Key Cases Cited
- Denver Area Educ. Telecomm. Consortium v. FCC, 518 U.S. 727 (1996) (plurality/fragmented opinions addressing state action in context of permissive cable statute)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state-law doctrines that invalidate arbitration agreements)
- Lugar v. Edmondson Oil Co., 457 U.S. 922 (1982) (two-part test for state action: deprivation caused by state-created right and conduct attributable to state)
- Am. Mfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40 (1999) (private conduct relying on permissive statute not necessarily state action; must show private actor is attributable to state)
- Flagg Bros., Inc. v. Brooks, 436 U.S. 149 (1978) (refusal to attribute private warehouseman’s conduct to state despite statutory framework)
- Duffield v. Robertson Stephens & Co., 144 F.3d 1182 (9th Cir. 1998) (judicial enforcement of arbitration does not constitute state action; close‑nexus/encouragement analysis)
- Skinner v. Ry. Labor Execs.’ Ass’n, 489 U.S. 602 (1989) (government regulations that coerce private action can create state action under encouragement test)