9th Circuit reaffirms consumer arbitration pact enforceability

An appellate panel on Monday shot down a different plaintiffs’ legal theory to make a familiar conclusion: AT&T’s arbitration contracts with its customers are enforceable.

In a published ruling for AT&T Mobility LLC and against a putative class of cellphone owners, the 9th U.S. Circuit Court of Appeals opinion harkened back to the U.S. Supreme Court’s 2011 decision, AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

Concepcion reversed a 9th Circuit decision, and, in a seminal ruling, said that contracts making plaintiffs individually arbitrate complaints, as opposed to pursuing class claims, are not unconscionable but as enforceable as any other contract.

In the latest challenge to AT&T’s pact, 9th Circuit Judge Richard C. Tallman’s unanimous opinion deferred to Concepcion. Roberts v. AT&T Mobility LLC, 16-16915.

Tallman also took a dim view of the cell phone users’ argument that individual arbitration violated their First Amendment rights.

“Plaintiffs’ argument also assumes the FAA [Federal Arbitration Act] violates citizens’ constitutional rights,” Tallman wrote, before partly quoting Concepcion: “But the FAA declares that arbitration agreements are ‘valid, irrevocable, and enforceable, save upon which grounds as exist at law or in equity for the revocation of any contract.’”

“Plaintiffs disagree with this case law, but we are bound by it,” Tallman added.

Judges William A. Fletcher and Michael Daly Hawkins concurred.

Plaintiffs and defendants each were represented by a small army of out-of-state lawyers.

Alexander H. Schmidt, a lawyer at Lubiner Schmidt & Palumbo LLC in Colts Neck, New Jersey was top lawyer for the plaintiffs and did not return messages seeking comment Monday.

Head defense attorney Andrew J. Pincus of Mayer Brown LLP referred questions to AT&T, which responded with a statement, “We agreed with the U.S. District Court’s ruling compelling arbitration, and are pleased with the Ninth Circuit’s affirmation of that ruling.”

Marcus A. Roberts and three other named plaintiffs sued, stating they represented a class of people who bought unlimited data plans. AT&T deceived these mobile phone users, the plaintiffs alleged, because they would slow data speed down after a certain usage level, effectively mitigating the advantages of unlimited data.

AT&T moved to compel individual arbitration, stating that each of these consumers signed arbitration contracts, and U.S. District Judge Edward M. Chen granted AT&T’s motion.

Plaintiffs appealed, arguing that the U.S. Supreme Court’s Concepcion decision and, other such cases that encourage arbitration, represent an overreach of judicial power. Courts, in other words, plaintiffs argued, rendered a particular kind of speech — here, class claims — vulnerable.

Felix A. Shafir, a defense lawyer at Horvitz & Levy LLP, said that such plaintiff arguments cropped up in 1990s arbitration cases.

But they have not resurfaced post-Concepcion until now, Shafir noted, hypothesizing that was why the panel published its decision.

Roberts comes as the U.S. Supreme Court is revisiting the enforceability of individual arbitration contracts as plaintiffs’ lawyers have contended that such pacts run afoul of concerted activity protections in the National Labor Relations Act.

But that battle, Shafir pointed out, is not applicable to the consumer context.