"Are we going to tell California what it has to consider unconscionable?"

That was the question Justice Antonin Scalia posed during oral arguments today in AT&T Mobility LLC v. Concepcion. In one of the most closely watched cases of the new session, which some half-jokingly refer to as Arbitrations v. Class Actions, the Supreme Court will decide whether California law governing unconscionable contracts is preempted by the Federal Arbitration Act when a consumer contract specifies that the parties must arbitrate any disputes, and that the arbitration cannot include any claims on behalf of a class. All indications were that a majority of the justices were not interested in telling states that unconscionable agreements had to be enforced even if they fell under the scope of the FAA.

Andrew Pincus of Mayer Brown, who represents AT&T, argued that the California standard for determining unconscionability discriminated against arbitration and therefore ran afoul of the FAA. He called the lower court ruling "[making] up a special rule for arbitration." Justice Ruth Bader Ginsburg didn't buy it. "The rule is the same whether it's litigation or arbitration," she said.

If Justice Antonin Scalia and Justice Ruth Bader Ginsburg are suggesting that they hold the same position on the issue, it's a good bet that theirs is the majority position. If you want to read the transcript and draw your own inferences, click this link.

http://www.supremecourt.gov/oral_arguments/argument_transcripts/09-893.pdf

It looks like class actions are going to be with us a while longer.

Comments

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[Gia@LA Defense Lawyer]

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It's entirely possible that one or more of these ideas could have been a big success had we given it the college try. Instead, these ideas died on the vine -- usually in one minute of a 1:1, a couple minutes before a different meeting got a quorum, or in a hallway conversation on the way to lunch. Generating good ideas is only as important as getting buy in for them. If you come up with ideas no one wants to act on, you're about as useful as someone who doesn't come up with any ideas (but you'll be a lot more frustrated and bitter).

[General Liability Insurance Blog]

Thanks for the link to the transcript on this case. Interesting reading.