In what was a putative class action, a federal court recently applied the U.S. Supreme Court’s Concepcion decision and compelled arbitration on an individual basis, despite the potential prohibitive costs of asserting claims individually. A putative consumer class action was brought against AT&T Mobility by a plaintiff who had agreed to arbitrate disputes only on an individual basis – and not as a class action. The plaintiff initially prevailed in avoiding arbitration, relying on California law. Prior to class certification, however, the U.S. Supreme Court decided the Concepcion case, which held the FAA preempts state laws that preclude class action waivers. Arguing that Concepcion conflicts with the court’s initial decision in this case, AT&T renewed its motion to compel arbitration. The court granted AT&T’s motion, rejecting plaintiff’s argument that Concepcion should only be applied where arbitration on an individual basis would be cost effective, i.e., where the plaintiff had substantial individual claims. The court was not persuaded by the plaintiff’s citation to an earlier Supreme Court ruling and a Second Circuit decision predating Concepcion, and noted that plaintiff’s position that a court should conduct a case-by-case cost-benefit analysis was “unworkable.” Kaltwasser v. AT&T Mobility LLC, Case No. 5:07-cv-00411 (N.D. Cal. Sept. 20, 2011).
This post written by Michael Wolgin.
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