Enforceability of Class Action Waiver Under the FAA

Ninth Circuit Rules on Enforceability of Class Action Waiver Under the Federal Arbitration Act

In Coneff v. AT&T, No. 09-35563 (9th Cir. March 16, 2012), Plaintiffs are current and former customers of defendants, New Cingular Wireless Services, Inc., and AT&T Mobility, LLC (“AT&T”). Plaintiffs filed a class action against AT&T, which responded by seeking to enforce an arbitration agreement contained in its contracts with Plaintiffs.

The service agreement requires individualized arbitration of “all disputes and claims,” and it prohibits both class actions and class arbitrations. It also contained a choice-of-law clause that selected the law of the state in which an individual plaintiff ’s billing address is located.

The district court refused to enforce the arbitration agreement on state-law unconscionability grounds, relying primarily on the agreement’s class-action waiver provision. AT&T now appeals.

The Ninth Circuit reversed the district court’s substantive unconscionability ruling and remanded for further proceedings related to Plaintiffs’ procedural unconscionability claims.

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by Victoria Vanburen