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AT&T Mobility, LLC v. Concepcion

(2011)

Supreme Court of the United States - 131 S.Ct. 1740, 563 U.S. 333,, 563 U.S. 333, 179 L. Ed. 2d 742, 131 S. Ct. 1740, 2011 U.S. LEXIS 3367, SCDB 2010-040

tl;dr:

Free phone came with a fee. Arbitration agreement was enforceable because FAA preempted state rule against class waivers in such agreements as unconscionable.

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ICRAIssue, Conclusion, Rule, Analysis for AT&T Mobility, LLC v. Concepcion

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Facts & HoldingAT&T Mobility, LLC v. Concepcion case brief facts & holding

Facts:Plaintiff Concepcion entered into a contract with Defendant AT&T for...

Holding:Ninth Circuit judgment is reversed and remanded. Section 2 of...

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AT&T Mobility, LLC v. Concepcion | Case Brief DeepDive
Majority opinion, author: Justice Scalia
Level 1
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The case involves whether the Federal Arbitration Act (FAA) preempts California's Discover Bank rule, which considers most collective-arbitration waivers in consumer contracts as unconscionable. The dispute concerns a contract between Vincent and Liza Concepcion and AT&T Mobility LLC that provided for arbitration of disputes but prohibited claims from being brought as a plaintiff or class member in any purported class or representative proceeding. The District Court denied AT&T's motion to compel arbitration, citing the California Supreme Court's decision in Discover Bank v. Superior Court and finding that the arbitration provision was unconscionable. The Ninth Circuit affirmed the District Court's decision, finding the arbitration provision unconscionable under California law as announced in Discover Bank. The Supreme Court granted certiorari to review the case and determine whether the FAA prohibits states from making the enforceability of certain arbitration agreements conditional on the availability of classwide arbitration procedures. Consumer arbitration agreements that do not provide for judicially monitored discovery may be found unconscionable or unenforceable as against public policy.

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Opinion (Concurrence), author: Justice Thomas
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The legal issue in this case is whether California's Discover Bank rule, which allows for the revocation of contracts that waive class arbitration, is a valid ground for revocation under Section 2 of the Federal Arbitration Act (FAA). The FAA requires that an agreement to arbitrate be enforced unless there is a successful challenge to the formation of the agreement. The use of the word "revocation" in Section 2 suggests that the exception to the enforcement of arbitration agreements only applies to grounds related to the making of the agreement. Contract defenses unrelated to the making of the agreement, such as public policy, could not be the basis for declining to enforce an arbitration clause. The question in this case is whether California's Discover Bank rule relates to the making of an agreement, and the author believes it does not. Justice Thomas argues that Section 2 prohibits courts from refusing to enforce arbitration agreements based on a state public policy against arbitration.

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Dissenting opinion, author: Justice Breyer
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The dissenting opinion in a legal case argues that California law, which prohibits class action waivers in certain circumstances, is consistent with the Federal Arbitration Act's objective. The Discover Bank rule is consistent with the language and objective of the Federal Arbitration Act (FAA). The majority's argument that the Discover Bank rule obstructs the accomplishment of the federal law's objective is not supported by evidence. The majority's basis for pre-empting California's law is unfounded. The Discover Bank rule supports the objective of the Act if speedy resolution of disputes were the only concern. Federal arbitration law typically leaves contract defenses, such as duress and unconscionability, to the states. The state's common law is of no federal concern in this matter.

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