Supreme Court upholds binding arbitration clause in DIRECTV case
Supreme Court upholds binding arbitration clause in DIRECTV case

The US Supreme Court [official website] ruled [opinion, PDF] 6-3 Monday in DIRECTV, Inc. v. Imburgia [SCOTUSblog materials] that the Federal Arbitration Act (FAA) preempts a California court’s refusal to enforce an arbitration clause in a contract. In 2008 Amy Imburgia filed a class action lawsuit against DIRECTV over early termination fees. At that point the state appeals court ruled that class action arbitration provisions in contracts were unenforceable. However, in 2011 the US Supreme Court decided in AT&T v. Concepcion [JURIST report] that the FAA preempts the state court ruling. The California Court of Appeal nevertheless refused to enforce the binding arbitration provision. Justice Stephen Breyer wrote the opinion for the Supreme Court:

The Federal Arbitration Act states that a “written provision” in a contract providing for “settle[ment] by arbitration” of “a controversy … arising out of” that “contract … shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” … We here consider a California court’s refusal to enforce an arbitration provision in a contract. In our view, that decision does not rest “upon such grounds as exist … for the revocation of any contract,” and we consequently set that judgment aside.

Justice Clarence Thomas filed a dissenting opinion noting that he remains of the view that the FAA does not apply to state court proceedings. Justice Ruth Bader Ginsburg filed a dissenting opinion, joined by Justice Sonia Sotomayor, in which she wrote that she would “give the customer, not the drafter, the benefit of the doubt.”

The court heard arguments [JURIST report] in the case in October. Certiorari was granted [JURIST report] in March.