The lead-up to the Supreme Court’s oral argument last fall in AT&T v. Concepcion inspired extensive conjecture regarding a potentially alarming outcome: that retailers and employers could avoid class actions altogether. Although the Ninth Circuit had invalidated as unconscionable a class action waiver that was part of the arbitration clause in the service agreement between AT&T and the plaintiff, legal observers speculate that, were the Supreme Court to reverse the Ninth Circuit—by holding that the Federal Arbitration Act preempts the state-law unconscionability doctrine that was the basis for invalidating the AT&T arbitration clause/class action waiver—then that could provide the impetus for consumer and employment contracts alike to include class action waivers immune to an unconscionability challenge. At least in the realm of consumer and employment law, that outcome could significantly impact the availability of the class action procedure.
In sizing up the Supreme Court oral argument, the plaintiff’s bar naturally looked to the Court’s progressive wing for support, as well as to signals from Justice Anthony Kennedy, the closest the Roberts Court has to a swing vote. However, it was a potential defection from the conservative bloc, and from perhaps its most ardent member, Justice Antonin Scalia, that produced hope that a worst-case scenario would be avoided. Justice Scalia, likely motivated by a desire for procedural continuity and an aversion to encroaching on state autonomy, asked: “Are we going to tell the State of California what it has to consider unconscionable?” Similarly, one Wall Street Journal blog following the oral argument was headlined “Class-Action Lawyers Breathing Easier After Oral Argument,” giving particular emphasis to Scalia’s apparent receptiveness to this version of states’ rights.
A decision in AT&T v. Concepcion is expected late this spring.