AT&T Mobility v. Concepcion
| AT&T Mobility v. Concepcion | |
|---|---|
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| Argued November 9, 2010 Decided April 27, 2011 |
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| Full case name | AT&T Mobility LLC, Petitioner v. Vincent Concepcion, et ux. |
| Docket nos. | 09-893 |
| Citations | 563 U.S. 333 (more)
131 S. Ct. 1740, 179 L.Ed. 2d 742
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| Prior history | Motion to compel arbitration denied sub nom. Laster v. T-Mobile USA, Inc., 2008 WL 5216255 (S.D. Cal., 2008); affirmed sub nom. Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir., 2009); certiorari granted, 560 U. S. ___ (2010) |
| Holding | |
| The Discover Bank test adopted by California to invalidate certain arbitration agreements with class action waivers is preempted by the Federal Arbitration Act. | |
| Court membership | |
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| Case opinions | |
| Majority | Scalia, joined by Roberts, Kennedy, Thomas, Alito |
| Concurrence | Thomas |
| Dissent | Breyer, joined by Ginsburg, Sotomayor, Kagan |
| Laws applied | |
| Federal Arbitration Act | |
AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), is a legal dispute that was decided by the United States Supreme Court. On April 27, 2011, the Court ruled, by a 5–4 margin, that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-wide arbitration, such as the law previously upheld by the California Supreme Court in the case of Discover Bank v. Superior Court. As a result, businesses that include arbitration agreements with class action waivers can require consumers to bring claims only in individual arbitrations, rather than in court as part of a class action. The decision was described by Jean Sternlight as a "tsunami that is wiping out existing and potential consumer and employment class actions" and by law professor Myriam Gilles as "the real game-changer for class action litigation". By April 2012, Concepcion was cited in at least 76 decisions sending putative class actions to individual arbitration. After the decision, several major businesses introduced or changed arbitration terms in their consumer contracts (some of which were based on the consumer-friendly terms found in the AT&T Mobility agreement), although the hypothesis of massive adoption of consumer arbitration clauses following the decision has been disputed.
In 2006, Vincent and Liza Concepcion sued AT&T Mobility over contract, contending that the cell phone company had engaged in deceptive advertising by falsely claiming that their wireless plan included free cell phones. Their suit became a class action. AT&T asked the U.S. District Court for Southern California to dismiss the suit, because AT&T's contract required the Concepcions to submit any disputes to individual arbitration rather than filing any class action lawsuits.
Unlike other arbitration agreements, AT&T Mobility's arbitration agreement was designed to facilitate the pursuit of small claims in arbitration. The arbitration agreement provided that AT&T Mobility would pay the entire cost of arbitration (unless the claim was determined to be frivolous). The arbitration would take place in the county where the consumer was located, by telephone, or through document submission, and forms for the arbitration were made available on AT&T Mobility's website. The arbitrator was not limited in the damages it could award to a consumer, and if the consumer received an award greater than AT&T Mobility's last written settlement offer, the award would be increased to $7,500, and the consumer would be entitled to double attorney's fees. This led the United States District Court for the Southern District of California to state that arbitration under AT&T Mobility's agreement was "quick, easy to use, and prompts full or, as described by Plaintiffs, even excess payment to the customer without the need to arbitrate or litigate."
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