AT&T Mobility LLC v. Concepcion (09-893)

argument 09-893

AT&T Mobility LLC v. Concepcion

Supreme Court of the United States 1h 0m 7 speakers 8 chapters transcribed 4 days ago official recording ↗

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What is the central dispute over the Federal Arbitration Act’s savings clause?

John G. Roberts 0:02

We'll hear argument first this morning in case 09893, AT&T Mobility v. Concepcion. Mr. Pincus.

Mr. Pincus 0:10

Thank you, Mr. Chief Justice, and may it please the Court. The Ninth Circuit concluded in this case that a State law may mandate the use of a particular procedure in arbitration as long as the law also requires the use of that same procedure in litigation. That interpretation- Section 2 of the Federal Arbitration Act would permit a State to oppose an arbitration any procedure employed in court and thereby require arbitration to be a carbon copy of litigation, precisely what the Act was designed to prevent. Section 2 of the Federal Arbitration Act provides that an arbitration agreement may be held unenforceable under State law only if the State law rule being invoked to invalidate the agreement qualifies as a ground that exists in law or equity for the revocation of any contract.

Mr. Pincus 0:55

Respondent argues that because California's Discover Bank rule does not facially discriminate against arbitration, it falls within the savings clause. But the plain language of the savings clause makes clear that it is not limited to statutes that discriminate facially against arbitration. By referring to any contract, it makes clear that, as this Court has said, the rule must be applicable to contracts generally.

Antonin Scalia 1:18

What if a State finds it unconscionable to have a an arbitration clause in an adhesion contract which requires the arbitration to be held at a great distance from where the other party is and requires that party to pay the cost of the arbitration. Can a State not find that to be unconscionable? MR. It can, Your Honor, and — JUSTICE BREYER. Well, that wouldn't apply to other — to other contracts.

Mr. Pincus 1:51

But the legal doctrine that the State is applying there, as States have and as we discussed in our brief, is a doctrine that applies a general principle of unconscionability with principles elucidating how it applies. Are we going to sit in

Antonin Scalia 2:04

judgment? Are we going to sit in judgment? I know you say it has to shock the conscience. But if a State wants to apply a lesser standard of unconscionability, can we strike that down?

Mr. Pincus 2:19

If it wants to apply a lesser standard to arbitration clauses, yes, absolutely you can, because that would violate what is at the core of the provision, which is discrimination against state law. If the state enacted a legislature enacted a statute and it was headed arbitration, unconscionability, rather, and Section 1 of that statute had general principles to be applied to all contractual provisions to determine unconscionability. It must shock the conscience. The question is addressed with respect to the party before the Court against whom the contract is going to be applied. And the third principle is unconscionability is decided ex ante. And then Section B said — I'm sorry.

Elena Kagan 3:01

What's the difference then with the act that you're positing? A State comes in — or I should ask you, is there no difference between a State saying these terms in a contract are unconscionable, making — the petitioner always pay the fees and making him or her arbitrate in a different State. That's unconscionable. Or a general rule of State law that says in a contract of adhesion, the stronger party can't impose undue costs or expenses on the other side to vindicate their rights, whether it's in litigation and or arbitration. In your mind, there's no difference between those two things, between those two approaches to the issue?

Mr. Pincus 3:57

I don't think so, Justice Sotomayor. Maybe if I could finish with my example, it may elucidate the

Elena Kagan 4:01

distinction that I'm trying to draw. So then how do you address, Justice Scalia, if you're saying there's no difference between those two things, then how can a State find those terms unconscionable? Under what theory, general theory of law, would they be provisioned? I

Mr. Pincus 4:14

think the critical question is, is the State applying the same principles to arbitration of unconscionability to arbitration agreements as to other agreements? And in my example, I was positing a first provision that laid out three principles that would be applied.