I am delighted to post this blog courtesy of Professor Richard Reuben of the University of Missouri School of Law:
I finally had occasion to take a close look at AT&T v. Concepcion, which will be argued on Nov. 9, and think it could be a real sleeper.
There is a lot of spin in the briefs, but if you look at the 9th Circuit opinion, you can better see what is going on. In short, in Discover Bank the California Supreme Court applied general state unconscionability law to a claim that an arbitration provision that barred class actions and found that the clause was unconscionable. That opinion has been used to strike down other similar arbitration provisions, including the one struck down by the 9th Circuit in the AT&T case. At the U.S. Supreme Court, AT&T is essentially arguing that the Discover Bank standard is an arbitration-specific law that is preempted by the FAA. If that’s true and the 9th Circuit is reversed, one may reasonably question what is left of Section 2’s savings clause. After all, all Discover Bank did was apply general unconscionability law to the class arbitration context, and all the “Discover Bank standard” was was other cases using it as precedent. If that’s preempted, then how would any application of general contract law to arbitration be able to withstand preemption?
Much of course depends on what the Supreme Court does and says, but this could be a big one.
That’s my take. Thoughts?
I think it is quite possible the Court’s final resolution of this case will be a “sleeper” – the Court’s *disposition* of arbitration cases in recent years has often been quite unpredictable.
But I would argue that the *issue* presented to the Court on the merits is anything but a sleeper, for reasons that may only become clear to most of us in the years to come. Christopher Drahozal, the foremost expert on FAA preemption, has referred to it as the case that academics and practitioners have been “waiting for the Court to take for years. ” The case has also attracted 26 amicus briefs, including from the following distinguished academics:
ADR:
Bob Mnookin
Karen Halverson Cross
Amy Schmitz
Katherine VW Stone
Jeff Stempel
Deborah Hensler
Procedure/Federalism:
Bill Rubenstein
Judith Resnik
Erwin Chemerinsky
Ted Eisenberg
John Coffee
Arthur Miller
Contracts:
Randy Barnett
Omri Ben-Shahar
Richard Epstein
Larry Ribstein
Charles Knapp
Stewart Macaulay
Harry Prince
So I would argue that this case does indeed have the potential to be “a big one.” In my humble opinion, anyone interested in the future of mandatory binding arbitration, the unconscionability defense, and federal preemption in the ADR area should take another serious look.