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DIRECTV v. Imburgia Decided, Surprises No One

posted by Mark Weidemaier

Earlier I posted about DIRECTV v. Imburgia. To recap the issue: DIRECTV's contract with subscribers (i) required arbitration, (ii) forbade class actions, and (iii) provided for litigation in court if "the law of [the subscriber's] state" refused to enforce the class action waiver. California law refuses to enforce class action waivers in some circumstances, but this law is preempted by the Federal Arbitration Act. State courts in California invalidated the class action waiver anyway, reasoning that the contract actually meant to incorporate (i.e., be governed by) invalid state law. The interpretation is so odd that, in my view, it is explicable only if one assumes that the judges simply wanted not to enforce the arbitration clause. But the Federal Arbitration Act also preempts modes of contract interpretation that discriminate against arbitration clauses, and that seems plainly true of this mode of interpretation.

Anyway, the opinion is here, along with a dissent by Justices Ginsburg and Sotomayor. Justice Thomas dissented because he believes the FAA does not apply to proceedings in state court.

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