In At&T Mobility both the majority and dissenting opinions made good points. You are to analyze the case from a legal and ethical standpoint. Your objective is to show an understanding of the procedures and process that brought the case to the US Supreme Court, the facts of the case, the decision and dissent and the importance of the case to both business and the consumer. This paper should have 5 pages of analysis (body) and should meet the following requirements. I will concede some of the requirements are a little extreme for such a short paper, but you must know how to do these when you are in a work situation.The body of the paper should be about 5 pages long. All papers will be8 ½ x 11 paperPapers must be submitted in electronic format through Blackboard.Margins shall be 1 inch on each sideFont Times New Roman 12 pointsEach page number shall be in the bottom centerPapers must have:Title pageTable of contentsExecutive summaryTable of acronymsBody of paper (should be at least five pages)The document should be prepared in accordance with APA style guide, the style guides are available on the internetBibliography
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(Slip Opinion)
OCTOBER TERM, 2010
1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
AT&T MOBILITY LLC v. CONCEPCION ET UX.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE NINTH CIRCUIT
No. 09–893.
Argued November 9, 2010—Decided April 27, 2011
The cellular telephone contract between respondents (Concepcions) and
petitioner (AT&T) provided for arbitration of all disputes, but did not
permit classwide arbitration. After the Concepcions were charged
sales tax on the retail value of phones provided free under their ser
vice contract, they sued AT&T in a California Federal District Court.
Their suit was consolidated with a class action alleging, inter alia,
that AT&T had engaged in false advertising and fraud by charging
sales tax on “free” phones. The District Court denied AT&T’s motion
to compel arbitration under the Concepcions’ contract. Relying on
the California Supreme Court’s Discover Bank decision, it found the
arbitration provision unconscionable because it disallowed classwide
proceedings. The Ninth Circuit agreed that the provision was uncon
scionable under California law and held that the Federal Arbitration
Act (FAA), which makes arbitration agreements “valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract,” 9 U. S. C. §2, did not preempt its
ruling.
Held: Because it “stands as an obstacle to the accomplishment and exe
cution of the full purposes and objectives of Congress,” Hines v.
Davidowitz, 312 U. S. 52, 67, California’s Discover Bank rule is pre
empted by the FAA. Pp. 4–18.
(a) Section 2 reflects a “liberal federal policy favoring arbitration,”
Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S.
1, 24, and the “fundamental principle that arbitration is a matter of
contract,” Rent-A-Center, West, Inc. v. Jackson, 561 U. S. ____, ____.
Thus, courts must place arbitration agreements on an equal footing
with other contracts, Buckeye Check Cashing, Inc. v. Cardegna, 546
U. S. 440, 443, and enforce them according to their terms, Volt In
2
AT&T MOBILITY LLC v. CONCEPCION
Syllabus
formation Sciences, Inc. v. Board of Trustees of Leland Stanford Jun
ior Univ., 489 U. S. 468, 478. Section 2’s saving clause permits
agreements to be invalidated by “generally applicable contract de
fenses,” but not by defenses that apply only to arbitration or derive
their meaning from the fact that an agreement to arbitrate is at is
sue. Doctor’s Associates, Inc. v. Casarotto, 517 U. S. 681, 687. Pp. 4–
5.
(b) In Discover Bank, the California Supreme Court held that class
waivers in consumer arbitration agreements are unconscionable if
the agreement is in an adhesion contract, disputes between the par
ties are likely to involve small amounts of damages, and the party
with inferior bargaining power alleges a deliberate scheme to de
fraud. Pp. 5–6.
(c) The Concepcions claim that the Discover Bank rule is a ground
that “exist[s] at law or in equity for the revocation of any contract”
under FAA §2. When state law prohibits outright the arbitration of a
particular type of claim, the FAA displaces the conflicting rule. But
the inquiry is more complex when a generally applicable doctrine is
alleged to have been applied in a fashion that disfavors or interferes
with arbitration. Although §2’s saving clause preserves generally
applicable contract defenses, it does not suggest an intent to preserve
state-law rules that stand as an obstacle to the accomplishment of
the FAA’s objectives. Cf. Geier v. American Honda Motor Co., 529
U. S. 861, 872. The FAA’s overarching purpose is to ensure the en
forcement of arbitration agreements according to their terms so as to
facilitate informal, streamlined proceedings. Parties may agree to
limit the issues subject to arbitration, Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 628, to arbitrate accord
ing to specific rules, Volt, supra, at 479, and to limit with whom they
will arbitrate, Stolt-Nielsen, supra, at ___. Pp. 6–12.
(d) Class arbitration, to the extent it is manufactured by Discover
Bank rather than consensual, interferes with fundamental attributes
of arbitration. The switch from bilateral to class arbitration sacri
fices arbitration’s informality and makes the process slower, more
costly, and more likely to generate procedural morass than final
judgment. And class arbitration greatly increases risks to defen
dants. The absence of multilayered review makes it more likely that
errors will go uncorrected. That risk of error may become unaccept
able when damages allegedly owed to thousands of claimants are ag
gregated and decided at once. Arbitration is poorly suited to these
higher stakes. In litigation, a defendant may appeal a certification
decision and a final judgment, but 9 U. S. C. §10 limits the grounds
on which courts can vacate arbitral awards. Pp. 12–18.
584 F. 3d 849, reversed and remanded.
Cite as: 563 U. S. ____ (2011)
3
Syllabus
SCALIA, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and KENNEDY, THOMAS, and ALITO, JJ., joined. THOMAS, J., filed a
concurring opinion. BREYER, J., filed a dissenting opinion, in which
GINSBURG, SOTOMAYOR, and KAGAN, JJ., joined.
Cite as: 563 U. S. ____ (2011)
1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 09–893
_________________
AT&T MOBILITY LLC, PETITIONER v. VINCENT
CONCEPCION ET UX.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
[April 27, 2011]
JUSTICE SCALIA delivered the opinion of the Court.
Section 2 of the Federal Arbitration Act (FAA) makes
agreements to arbitrate “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract.” 9 U. S. C. §2. We
consider whether the FAA prohibits States from conditioning the enforceability of certain arbitration agreements on
the availability of classwide arbitration procedures.
I
In February 2002, Vincent and Liza Concepcion entered
into an agreement for the sale and servicing of cellular
telephones with AT&T Mobility LCC (AT&T).1 The contract provided for arbitration of all disputes between the
parties, but required that claims be brought in the parties’
“individual capacity, and not as a plaintiff or class member
in any purported class or representative proceeding.” App.
——————
1 The
Concepcions’ original contract was with Cingular Wireless.
AT&T acquired Cingular in 2005 and renamed the company AT&T
Mobility in 2007. Laster v. AT&T Mobility LLC, 584 F. 3d 849, 852,
n. 1 (CA9 2009).
2
AT&T MOBILITY LLC v. CONCEPCION
Opinion of the Court
to Pet. for Cert 61a.2 The agreement authorized AT&T to
make unilateral amendments, which it did to the arbitra
tion provision on several occasions. The version at issue in
this case reflects revisions made in December 2006, which
the parties agree are controlling.
The revised agreement provides that customers may
initiate dispute proceedings by completing a one-page No
tice of Dispute form available on AT&T’s Web site. AT&T
may then offer to settle the claim; if it does not, or if
the dispute is not resolved within 30 days, the customer
may invoke arbitration by filing a separate Demand for
Arbitration, also available on AT&T’s Web site. In the
event the parties proceed to arbitration, the agreement
specifies that AT&T must pay all costs for nonfrivolous
claims; that arbitration must take place in the county in
which the customer is billed; that, for claims of $10,000 or
less, the customer may choose whether the arbitration
proceeds in person, by telephone, or based only on submis
sions; that either party may bring a claim in small claims
court in lieu of arbitration; and that the arbitrator may
award any form of individual relief, including injunctions
and presumably punitive damages. The agreement, more
over, denies AT&T any ability to seek reimbursement of
its attorney’s fees, and, in the event that a customer re
ceives an arbitration award greater than AT&T’s last
written settlement offer, requires AT&T to pay a $7,500
minimum recovery and twice the amount of the claimant’s
attorney’s fees.3
The Concepcions purchased AT&T service, which was
advertised as including the provision of free phones; they
——————
2 That provision further states that “the arbitrator may not consoli
date more than one person’s claims, and may not otherwise preside
over any form of a representative or class proceeding.” App. to Pet. for
Cert. 61a.
3 The guaranteed minimum recovery was increased in 2009 to
$10,000. Brief for Petitioner 7.
Cite as: 563 U. S. ____ (2011)
3
Opinion of the Court
were not charged for the phones, but they were charged
$30.22 in sales tax based on the phones’ retail value. In
March 2006, the Concepcions filed a complaint against
AT&T in the United States District Court for the Southern
District of California. The complaint was later consoli
dated with a putative class action alleging, among other
things, that AT&T had engaged in false advertising and
fraud by charging sales tax on phones it advertised as free.
In March 2008, AT&T moved to compel arbitration
under the terms of its contract with the Concepcions. The
Concepcions opposed the motion, contending that the ar
bitration agreement was unconscionable and unlawfully
exculpatory under California law because it disallowed
classwide procedures. The District Court denied AT&T’s
motion. It described AT&T’s arbitration agreement fa
vorably, noting, for example, that the informal dispute
resolution process was “quick, easy to use” and likely to
“promp[t] full or . . . even excess payment to the customer
without the need to arbitrate or litigate”; that the $7,500
premium functioned as “a substantial inducement for the
consumer to pursue the claim in arbitration” if a dispute
was not resolved informally; and that consumers who were
members of a class would likely be worse off. Laster v.
T-Mobile USA, Inc., 2008 WL 5216255, *11–*12 (SD Cal.,
Aug. 11, 2008). Nevertheless, relying on the California
Supreme Court’s decision in Discover Bank v. Superior
Court, 36 Cal. 4th 148, 113 P. 3d 1100 (2005), the court
found that the arbitration provision was unconscionable
because AT&T had not shown that bilateral arbitration
adequately substituted for the deterrent effects of class
actions. Laster, 2008 WL 5216255, *14.
The Ninth Circuit affirmed, also finding the provision
unconscionable under California law as announced in
Discover Bank. Laster v. AT&T Mobility LLC, 584 F. 3d
849, 855 (2009). It also held that the Discover Bank rule
was not preempted by the FAA because that rule was
4
AT&T MOBILITY LLC v. CONCEPCION
Opinion of the Court
simply “a refinement of the unconscionability analysis
applicable to contracts generally in California.” 584 F. 3d,
at 857. In response to AT&T’s argument that the Con
cepcions’ interpretation of California law discriminated
against arbitration, the Ninth Circuit rejected the conten
tion that “ ‘class proceedings will reduce the efficiency and
expeditiousness of arbitration’ ” and noted that “ ‘Discover
Bank placed arbitration agreements with class action
waivers on the exact same footing as contracts that bar
class action litigation outside the context of arbitration.’ ”
Id., at 858 (quoting Shroyer v. New Cingular Wireless
Services, Inc., 498 F. 3d 976, 990 (CA9 2007)).
We granted certiorari, 560 U. S. ___ (2010).
II
The FAA was enacted in 1925 in response to widespread
judicial hostility to arbitration agreements. See Hall
Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576,
581 (2008). Section 2, the “primary substantive provision
of the Act,” Moses H. Cone Memorial Hospital v. Mercury
Constr. Corp., 460 U. S. 1, 24 (1983), provides, in relevant
part, as follows:
“A written provision in any maritime transaction or
a contract evidencing a transaction involving com
merce to settle by arbitration a controversy thereafter
arising out of such contract or transaction . . . shall be
valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation
of any contract.” 9 U. S. C. §2.
We have described this provision as reflecting both a
“liberal federal policy favoring arbitration,” Moses H.
Cone, supra, at 24, and the “fundamental principle that
arbitration is a matter of contract,” Rent-A-Center, West,
Inc. v. Jackson, 561 U. S. ____ , ____ (2010) (slip op., at 3).
In line with these principles, courts must place arbitration
Cite as: 563 U. S. ____ (2011)
5
Opinion of the Court
agreements on an equal footing with other contracts,
Buckeye Check Cashing, Inc. v. Cardegna, 546 U. S. 440,
443 (2006), and enforce them according to their terms, Volt
Information Sciences, Inc. v. Board of Trustees of Leland
Stanford Junior Univ., 489 U. S. 468, 478 (1989).
The final phrase of §2, however, permits arbitration
agreements to be declared unenforceable “upon such
grounds as exist at law or in equity for the revocation of
any contract.” This saving clause permits agreements to
arbitrate to be invalidated by “generally applicable con
tract defenses, such as fraud, duress, or unconscionabil
ity,” but not by defenses that apply only to arbitration or
that derive their meaning from the fact that an agreement
to arbitrate is at issue. Doctor’s Associates, Inc. v.
Casarotto, 517 U. S. 681, 687 (1996); see also Perry v.
Thomas, 482 U. S. 483, 492–493, n. 9 (1987). The question
in this case is whether §2 preempts California’s rule clas
sifying most collective-arbitration waivers in consumer
contracts as unconscionable. We refer to this rule as the
Discover Bank rule.
Under California law, courts may refuse to enforce any
contract found “to have been unconscionable at the time it
was made,” or may “limit the application of any uncon
scionable clause.” Cal. Civ. Code Ann. §1670.5(a) (West
1985). A finding of unconscionability requires “a ‘proce
dural’ and a ‘substantive’ element, the former focusing on
‘oppression’ or ‘surprise’ due to unequal bargaining power,
the latter on ‘overly harsh’ or ‘one-sided’ results.” Armen
dariz v. Foundation Health Pyschcare Servs., Inc., 24 Cal.
4th 83, 114, 6 P. 3d 669, 690 (2000); accord, Discover
Bank, 36 Cal. 4th, at 159–161, 113 P. 3d, at 1108.
In Discover Bank, the California Supreme Court applied
this framework to class-action waivers in arbitration
agreements and held as follows:
“[W]hen the waiver is found in a consumer contract of
6
AT&T MOBILITY LLC v. CONCEPCION
Opinion of the Court
adhesion in a setting in which disputes between the
contracting parties predictably involve small amounts
of damages, and when it is alleged that the party
with the superior bargaining power has carried out a
scheme to deliberately cheat large numbers of con
sumers out of individually small sums of money, then
. . . the waiver becomes in practice the exemption of
the party ‘from responsibility for [its] own fraud, or
willful injury to the person or property of another.’
Under these circumstances, such waivers are uncon
scionable under California law and should not be en
forced.” Id., at 162, 113 P. 3d, at 1110 (quoting Cal.
Civ. Code Ann. §1668).
California courts have frequently applied this rule to find
arbitration agreements unconscionable. See, e.g., Cohen v.
DirecTV, Inc., 142 Cal. App. 4th 1442, 1451–1453, 48 Cal.
Rptr. 3d 813, 819–821 (2006); Klussman v. Cross Country
Bank, 134 Cal. App. 4th 1283, 1297, 36 Cal Rptr. 3d 728,
738–739 (2005); Aral v. EarthLink, Inc., 134 Cal. App. 4th
544, 556–557, 36 Cal. Rptr. 3d 229, 237–239 (2005).
III
A
The Concepcions argue that the Discover Bank rule,
given its origins in California’s unconscionability doctrine
and California’s policy against exculpation, is a ground
that “exist[s] at law or in equity for the revocation of any
contract” under FAA §2. Moreover, they argue that even if
we construe the Discover Bank rule as a prohibition on
collective-action waivers rather than simply an application
of unconscionability, the rule would still be applicable to
all dispute-resolution contracts, since California prohibits
waivers of class litigation as well. See America Online,
Inc. v. Superior Ct., 90 Cal. App. 4th 1, 17–18, 108 Cal.
Rptr. 2d 699, 711–713 (2001).
When state law prohibits outright the arbitration of a
Cite as: 563 U. S. ____ (2011)
7
Opinion of the Court
particular type of claim, the analysis is straightforward:
The conflicting rule is displaced by the FAA. Preston v.
Ferrer, 552 U. S. 346, 353 (2008). But the inquiry becomes
more complex when a doctrine normally thought to be
generally applicable, such as duress or, as relevant here,
unconscionability, is alleged to have been applied in a
fashion that disfavors arbitration. In Perry v. Thomas,
482 U. S. 483 (1987), for example, we noted that the FAA’s
preemptive effect might extend even to grounds tradition
ally thought to exist “ ‘at law or in equity for the revocation
of any contract.’ ” Id., at 492, n. 9 (emphasis deleted). We
said that a court may not “rely on the uniqueness of an
agreement to arbitrate as a basis for a state-law holding
that enforcement would be unconscionable, for this would
enable the court to effect what . . . the state legislature
cannot.” Id., at 493, n. 9.
An obvious illustration of this point would be a case
finding unconscionable or unenforceable as against public
policy consumer arbitration agreements that fail to pro
vide for judicially monitored discovery. The rationaliza
tions for such a holding are neither difficult to imagine nor
different in kind from those articulated in Discover Bank.
A court might reason that no consumer would knowingly
waive his right to full discovery, as this would enable
companies to hide their wrongdoing. Or the court might
simply say that such agreements are exculpatory—re
stricting discovery would be of greater benefit to the
company than the consumer, since the former is more
likely to be sued than to sue. See Discover Bank, supra, at
161, 113 P. 3d, at 1109 (arguing that class waivers are
similarly one-sided). And, the reasoning would continue,
because such a rule applies the general principle of uncon
scionability or public-policy disapproval of exculpatory
agreements, it is applicable to “any” contract and thus
preserved by §2 of the FAA. In practice, of course, the rule
would have a disproportionate impact on arbitration
8
AT&T MOBILITY LLC v. CONCEPCION
Opinion of the Court
agreements; but it would presumably apply to contracts
purporting to restrict discovery in litigation as well.
Other examples are easy to imagine. The same argument might apply to a rule classifying as unconscionable
arbitration agreements that fail to abide by the Federal
Rules of Evidence, or that disallow an ultimate disposition
by a jury (perhaps termed “a panel of twelve lay arbitrators” to help avoid preemption). Such examples are not
fanciful, since the judicial …
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