Supreme Court to Review Whether FAA Preempts California Arbitration Agreement Rules
By Ryan McCoy
Recently, in AT&T Mobility LLC v. Concepcion (Laster), the 9th Circuit held that the phone company's consumer class action waiver clause was unconscionable under California law, and that the Federal Arbitration Act ("FAA") does not preempt California law. Both conclusions are significant given the Supreme Court's prior holding in in Stoltt-Nielsen v. Animal Feeds, which held that the FAA does not authorize arbitrators to require class action arbitration when an arbitration agreement is silent on the issue.
The United States Supreme Court granted certiorari and will hear the case in the upcoming term. The Court is expected to decide whether the 9th Circuit was correct in holding that the FAA does not preempt state law. This decision has the potential to impact the enforceability of class action waivers in arbitration agreements in California. We will continue to keep you updated with respect to this case.