Today, the U.S. Supreme Court announced that it will hear a case that addresses whether an arbitration provision in a DIRECTV customer agreement was properly found unenforceable under California contract law because of its bar on class claims. The Court’s decision to review the case was a surprise to both defense and consumer attorneys.

“I thought they were pretty much finished dealing with the validity of class action waivers in the aftermath of Concepcion and Italian Colors,” said Ballard Spahr partner Alan S. Kaplinsky.

He referred to AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (12 CLASS 362, 5/13/11), and Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013) (14 CLASS 739, 6/28/13).

Mr. Kaplinsky believes the top court to reverse the appeals court decision finding the arbitration clause unenforceable, and to “send it back to the California Supreme Court saying, ‘Hey, don't you know that state law includes federal law that operates by virtue of federal preemption.'”

“When you refer to state law, it also should subsume any federal law that would apply by federal preemption,” Mr. Kaplinksy said. “So I think that's the right result, I'm just surprised they took the case because it's rather unique facts.”

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Consumer Financial Services