Reproduced with permission from The United States Law Week, 81 U.S.L.W. 1318, 03/19/2013. Copyright !2013
by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
ARBITRATION
WAIVER OF RIGHT TO ARBITRATE
To Move or Not to Move: Calculating the Risk
Of Waiving the Right to Arbitrate in a Shifting Judicial Landscape
BYSANDRA MCCALLION
The U.S. Supreme Court’s decision in AT&T Mobil-
ity LLC v. Concepcion, 131 S. Ct. 1740, 2011 BL
110648, 79 U.S.L.W. 4279 (U.S. 2011), has been
characterized as a ‘‘game changer’’ in the arbitration
arena. Concepcion overturned California’s ‘‘Discover
Bank’’ rule, which had held that arbitration provisions
that waived the consumer’s right to a class-wide arbitra-
tion in certain consumer contracts of adhesion were un-
conscionable.
1
In overruling the California practice, the
Supreme Court held that the rule was ‘‘an obstacle to
the accomplishment and execution of the full purposes
and objections of the Federal Arbitration Act.’’
2
Before
Concepcion, a motion to compel challenging state court
precedent would have been summarily denied. After the
decision, case law from both state and federal courts
suggests that the same motion will likely be granted.
3
‘‘In short, the judicial landscape remains
somewhat unsettled.’’
These motions are not simply pro forma in the post-
Concepcion world, however. The FAA’s ‘‘savings
clause,’’ which provides that common law contract de-
fenses may invalidate an arbitration provision, may still
permit a party to try its case in court so long as those
defenses are not ‘‘applied in a fashion that disfavors ar-
bitration.’’
4
Since Concepcion, some courts—although
few—have cited this language in support of their find-
ings that the arbitration provision at issue is unconscio-
nable.
5
Still other courts have questioned the scope of Con-
cepcion, holding, for example that the policy favoring
arbitration is not so broad that it requires arbitration of
claims brought by a representative action under a Pri-
1
Concepcion, 131 S. Ct. at 1753.
2
Id.
3
See, e.g., Owen v. Briston Care Inc., 702 F.3d 1050 (8th
Cir. 2013); Pendergast v. Sprint Nextel Corp., 691 F.3d 1224
(11th Cir. 2012) (81 U.S.L.W. 310); Torres v. United Healthcare
Service Inc., No. 12-cv-923, 2013 BL 28690 (E.D.N.Y. Feb. 1,
2013); Superbag Operating Co. Inc. v. Sanchez, No. 01-12-
00342-cv, 2013 BL 26258 (Tex. App., Jan. 31, 2013).
4
Concepcion, 131 S. Ct. at 1747.
5
See, e.g., Gandee v. LDL Freedom Enterprises Inc.,, No.
87674-6, 2013 BL 33094 (Wash. Feb. 7, 2013); Natalini v. Im-
port Motors Inc., A133236, 2013 BL 30491 (Cal. App. 1 Dist.
Jan. 7, 2013); Smith v. AmeriCredit Financial Services Inc., No.
09-cv-1076, 2012 BL 343559 (S.D. Cal. Mar. 12, 2012).
Sandra McCallion is a partner in Cohen &
Gresser’s Litigation & Arbitration Group. She
has substantial trial and arbitration experi-
ence and has litigated a broad array of com-
plex commercial disputes, with an emphasis
on products liability, patent and trademark
litigation, and international arbitration.
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