Coneff v. AT & T Corp.

The Federal Arbitration Act preempts the Washington State law that invalidates a class-action waiver in arbitration agreements.

AT&T appealed the district court’s denial of a motion to compel arbitration. Coneff filed a class action against AT&T for breach of contract, unjust enrichment, violation of the Federal Communications Act, and several state consumer protection laws. Coneff alleged that the arbitration agreement in the service agreement “was unenforceable due to both substantive and procedural unconscionability.” The district court refused to enforce the arbitration agreement, finding that, under Washington State law, the arbitration agreement was substantively unconscionable, and therefore void. The Ninth Circuit concluded that the Federal Arbitration Act preempts Washington State law and the Supreme Court decision in AT&T Mobility LLC v. Concepcion governs. Therefore, the Court reversed the district court’s findings regarding the procedural and substantive unconscionability of the arbitration agreement. Additionally, because the plaintiffs reside in different states, the Court held that the district court must apply Washington choice-of-law rules to the plaintiffs’ procedural unconscionability claims. REVERSED and REMANDED.