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Thursday, January 14, 2016

DIRECTV, Inc. v. Imburgia: SCOTUS Rules on Concepcion and the "Law of Your State"

A quick word on DIRECTV, Inc. v. Imburgia (SCOTUS 12/14/15), in which the Supreme Court held that a California Court of Appeal erred in refusing to enforce a class action waiver in a somewhat unique arbitration clause. The clause provided that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable, but also declared that the arbitration clause was governed by the Federal Arbitration Act (FAA).

The Court held that the FAA preempted the Court of Appeal's decision. As explained in this article by Ronald Mann on SCOTUSblog, the opinion rests on three basic premises: "First, the Court concludes that the contract unambiguously refers to valid state law, not to the doctrine preempted by the Court’s decision in Concepcion." Second, "references to the 'law' of a state refer to 'valid law,' rather than 'the law as it would be in the absence of federal preemption.'" Third, the Court of Appeal relied on the fact that the language at issue was in an arbitration clause and failed to provide "any real non-arbitration justification for the ruling...."

The opinion is available here, and the SCOTUSblog page on the opinion is here.

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