October 29, 2020

Another consumer class action battle heads to Supreme Court


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DirecTVBy Scott Flaherty, From The Litigation Daily

Four years after holding that federal law trumps California’s ability to block class action waivers, the U.S. Supreme Court plunged back into the consumer arbitration debate on Monday in a case involving the satellite television provider DirecTV Inc.

Granting a petition filed by Christopher Landau of Kirkland & Ellis, the justices agreed to review a California appellate ruling that cleared the way for a class action on behalf of DirecTV customers. The plaintiffs, who allege that DirecTV’s cancellation fees violated California’s Consumers Legal Remedies Act, were allowed to proceed with the case despite clauses in their contracts with DirecTV that required them to arbitrate disputes individually.

DirecTV’s petition asserted that the California decision contradicted the Supreme Court’s 2011 ruling in AT&T Mobility v. Concepcion. In Concepcion, the justices held that AT&T could enforce mandatory arbitration clauses in its customer agreements, concluding that the Federal Arbitration Act preempted a California law cracking down on class action waivers.

Named plaintiffs Amy Imburgia and Kathy Greiner, represented at the Supreme Court by Paul Stevens of Milstein Adelman, both signed customer agreements with DirecTV in 2007 that included an arbitration clause and a waiver of class action rights. After they sued in 2008, DirecTV sought to compel arbitration in light of Concepcion.

A California trial court denied DirecTV’s request, and California’s Second District Court of Appeals affirmed in April 2014, blocking DirecTV from forcing the fee dispute into individual arbitration.

The state appellate panel found that specific provisions in the 2007 customer contract voided the arbitration clause because the applicable state law—the CLRA—bars consumers from giving up their class action rights.

DirecTV asked the U.S. Supreme Court to review state court’s ruling in October, arguing that it ran counter to Concepcion. The company also cited a 2013 decision by the U.S. Court of Appeals for the Ninth Circuit, which applied Concepcion and determined the same DirecTV customer arbitration clause was enforceable.

“The California Court of Appeal’s decision in this case does precisely what Concepcion prohibits: it applies state law to invalidate an arbitration agreement solely because that agreement includes a class-action waiver,” Kirkland’s Landau wrote in DirecTV’s petition.

Milstein Adelman’s Stevens filed an opposition brief in January, arguing that DirecTV had overstated the potential conflict between the California state appeals court’s ruling and the Ninth Circuit’s decision.

“The two opinions conflict only marginally,” Stevens wrote. “To the extent that they do, the conflict comes down to a question concerning the interpretation of seldom-used language in an unnecessary class waiver provision.”

In addition to Landau, DirecTV’s legal team includes Kirkland’s Melissa Ingalls and Robyn Bladow. For the plaintiffs, Stevens is joined by F. Edie Mermelstein of FEM Law Group and others.

A DirecTV spokesman said the company’s pleased the Supreme Court will consider the case. We also reached out to Stevens on Monday but didn’t immediately hear back.

Photo: Wmachine via Wikimedia Commons.

For more on this story go to: http://www.litigationdaily.com/id=1202721393499/Another-Consumer-Class-Action-Battle-Heads-to-Supreme-Court#ixzz3VIxXq7Ev


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