As previously reported, in AT&T Mobility LLC v. Concepcion the U.S. Supreme Court on April 27, 2011, held that the Federal Arbitration Act (FAA) preempts California law classifying most class action waivers in arbitration agreements as unconscionable. Since then, scores of federal and state courts throughout the country have followed Concepcion and have enforced class action waivers. Very few courts have distinguished Concepcion. For an up-to-date list of opinions, click here.
The U.S. Court of Appeals for the 11th Circuit on August 11, 2011, issued its opinion in Cruz v. Cingular Wireless LLC. Cingular Wireless is now known as AT&T Mobility LLC and the arbitration provision at issue in Cruz is substantially identical to the one in Concepcion.
The District Court had granted Cingular’s motion to compel individual arbitration, holding that the arbitration provision did not violate Florida public policy and was enforceable under State law. Cruz v. Cingular Wireless, LLC, No. 2:07-cv-FtM-29 DNF, 2008 WL 4279690 (M.D. Fla. Sept. 15, 2008).
In the aftermath of, and in reliance upon, Concepcion, the 11th Circuit affirmed the District Court based on FAA preemption rather than Florida law: “[T]o the extent that Florida law would be sympathetic to the Plaintiffs’ argument here, and would invalidate the class action waiver simply because the claims are of small value, the potential claims are numerous, and many consumers might not know about or pursue their potential claims absent class procedures, such a state policy stands as an obstacle to the FAA’s objective of enforcing arbitration agreements according to their terms, and is preempted.”
The opinion is very significant because the plaintiffs “presented a factual record not present in Concepcion—the affidavits of three Florida consumer law attorneys who attested that they would not represent consumers on an individual basis in pursuing their … claims against [Cingular]. All three examined both [Cingular’s] arbitration agreement (including its allegedly pro-consumer features) and the Plaintiffs’ complaint, and concluded that it would not be cost-effective for them to pursue such claims against [Cingular] except on an aggregated basis.”
The 11th Circuit refused to distinguish this case from Concepcion notwithstanding the evidence in the record, which arguably precluded the plaintiffs from vindicating their rights. Although the court left open the door to consider whether such evidence in other cases lacking the features of Cingular’s arbitration provision might change the result, the logic of the Concepcion opinion would appear to shut that door.
Plaintiffs’ attorneys such as Paul Bland of Public Justice continue to urge courts to distinguish the Concepcion opinion in cases where a factual record evidences that the plaintiffs cannot vindicate their rights absent a class action. See “How Courts Can and Should Limit AT&T Mobility v. Concepcion.” The Cruz opinion goes a long way toward rejecting that argument.