- Court: U.S. Supreme Court Certiorari Granted
- Area(s) of Law: Arbitration
- Date Filed: March 23, 2015
- Case #: 14-462
- Judge(s)/Court Below: Court Below: 225 Cal. App. 4th 338 (2d Dist. 2014)
- Full Text Opinion
Respondents filed a class action complaint against Petitioner, based on claims that Petitioner improperly charges its customers early termination fees. Petitioner moved to stay, pending the outcome of a multidistrict litigation involving similar claims. Petitioner’s motion was denied.
The United States Supreme Court then decided Concepcion, which held that the Federal Arbitration Act (FAA) preempts the earlier decision of Discover Bank, which held that class action waivers in consumer contracts are unconscionable and unenforceable.
Petitioner then moved to stay or dismiss Respondents’ class action and to compel arbitration of Respondents’ claims, explaining that it—Petitioner—had not moved to compel arbitration because it believed that a motion to stay or dismiss would be futile under Discover Bank. Petitioner’s motion was denied and Petitioner appealed.
On appeal, the California Court of Appeal affirmed, explaining that state law forbids agreements that waive customer rights to bring a class action. The California Supreme Court affirmed.
The United States Supreme Court granted certiorari to determine whether the California Court of Appeal erred when it held that California state law forbids Petitioner’s customer agreements. Petitioner argues that California law is preempted by the FAA.