Monday, November 19, 2007

Ninth Circuit Invalidates Class Arbitration Waiver Clause and Holds that the Invalidation Is Not Preempted by the FAA

Per Shroyer v. New Cingular Wireless Services, Inc., 498 F.3d 976 (9th Cir. Aug. 17, 2007):

In this case, we consider whether a class arbitration waiver in New Cingular Wireless Service Inc.'s standard contract for cellular phone services is unconscionable under California law, and whether the Federal Arbitration Act preempts a holding that the waiver is unenforceable. We hold that the waiver is unconscionable, and, thus, unenforceable, and that the invalidation of the contract provision is not preempted by the Federal Arbitration Act. Accordingly, we reverse the district court's order compelling arbitration.


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