The U.S. Supreme Court today remanded three class action waiver cases for reconsideration in light of the landmark decision it issued last week in AT&T Mobility LLC v. Concepcion. In a fourth case, the Court granted certiorari in a case holding that Credit Repair Organizations Act (CROA) claims are not subject to arbitration.

On April 27, 2011, the Court issued its decision in AT&T Mobility LLC v. Concepcion, holding that the Federal Arbitration Act (FAA) preempts state laws that invalidate class action waivers in consumer arbitration agreements. Today, the Court granted certiorari in, and summarily vacated, three additional cases in which the courts had refused to enforce class action waivers in consumer arbitration agreements.

The three "grant, vacate and remand" cases were Missouri Title Loans, Inc. v. Brewer, No. 10-1027 (auto title loan contract; vacating Missouri Supreme Court decision); Sonic Automotive v. Watts, No. 10-315 (car purchase agreement; vacating South Carolina Supreme Court decision); Cellco Partnership v. Litman, No. 10-551 (cell phone contract; vacating federal Third Circuit decision).  In each case, the deciding court had ruled that the class action waiver was unconscionable and unenforceable under state law.

Ballard Spahr was co-counsel for petitioner Missouri Title Loans, Inc., in the Brewer case. The Missouri Supreme Court had held that there must either be class arbitration or no arbitration at all. Missouri Title Loans, Inc., argued that the state Supreme Court’s ruling was preempted by the FAA because it was inconsistent with the language of and the policies underlying the FAA.

Ballard Spahr also submitted an amicus brief in support of AT&T Mobility LLC in Concepcion on behalf of several industry groups.

The CROA decision that the Supreme Court agreed to review is Greenwood v. CompuCredit Corporation and Synovus Bank, 615 F. 3d 1204 (9th Cir. 2010). A divided panel of the Ninth Circuit held that CROA claims are not subject to arbitration pursuant to an arbitration agreement between a credit repair organization and a consumer. The Ninth Circuit acknowledged that its decision was in conflict with the opinions of the Third and the Eleventh Circuits. The petition for certiorari was filed in January 2011 at No. 10-948.

Click here to read Ballard Spahr’s amicus brief in Concepcion. Click here to read  earlier Ballard Spahr legal alert on CompuCredit. Click here to listen to a related interview with Alan S. Kaplinsky, Chair of Ballard Spahr’s Consumer Financial Services Group, on American Public Media's Marketplace.

Ballard Spahr's Consumer Financial Services Group is nationally recognized for its skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs), its guidance in structuring and documenting new consumer financial services products, and its experience with the full range of federal and state consumer credit laws throughout the country. For further information, please contact Group Chair Alan S. Kaplinsky, 215.864.8544 or kaplinsky@ballardspahr.com; Vice Chair Jeremy T. Rosenblum, 215.864.8505 or rosenblum@ballardspahr.com; Mark J. Levin, 215.864.8235 or levinmj@ballardspahr.com; or Martin C. Bryce, Jr., 215.864.8238 or bryce@ballardspahr.com.


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