At issue in this ongoing case was whether the decision of the Massachusetts Supreme Judicial Court (SJC) in Feeney v. Dell, Inc., 454 Mass. 192 (2009), remains valid after AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011), discussed above. NELF had filed an amicus brief in the 2009 Feeney case, arguing that the consumer class-arbitration waiver at issue should be upheld under general Massachusetts contract law.
In Feeney the SJC invalidated any class arbitration waiver in a consumer form agreement based on a fundamental Massachusetts public policy, embodied in Mass. G. L. c. 93A, favoring the aggregation of small-value consumer claims. In Concepcion, however, the Supreme Court held that the Federal Arbitration Act, 9 U.S.C. § 2 (“FAA”), preempted a similar categorical rule of decision, announced in Discover Bank v. Superior Court, 113 P.3d 1100 (Cal. 2005), that effectively declared as unconscionable all consumer class-arbitration waivers. Of key importance to this case, the Supreme Court explained that the FAA preempts California’s Discover Bank rule because it effectively requires all consumer arbitration agreements to offer class arbitration, and that class arbitration is antithetical to the “[t]he overarching purpose of the FAA . . . to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.” Id., 131 S.Ct. at 1748.
In the latest stage of this case, NELF filed an amicus brief supporting Dell in its direct interlocutory appeal before the SJC from the Superior Court’s denial of Dell’s motion to confirm the original arbitral award enforcing the class arbitration waiver. The Superior Court had interpreted Concepcion as preempting only categorical rules of decision invalidating class waivers, but as leaving intact generally applicable contract defenses to waivers under the FAA’s saving clause. In its SJC amicus brief, NELF argues that Concepcion requires courts to enforce class action waivers under the FAA. Invalidation of a class waiver, even under a generally applicable contract defense, would defeat the FAA’s core purpose of enforcing the parties’ agreement in order to ensure streamlined individual arbitration. The FAA forbids compulsory class arbitration, under any circumstances.
In its initial decision, decided before the Supreme Court’s American Express case, discussed above, the SJC agreed with the lower court and invalidated the class waiver. The Court concluded that Concepcion does not preclude a case-specific invalidation of a waiver based on a plaintiff’s proof of the prohibitive costs of arbitrating on an individual basis. But then the Supreme Court decided Amex, above, in which the Court, agreeing with NELF, explained that the FAA does not permit any invalidation of a class waiver, even when it is case-specific. Dell then filed a petition for rehearing, and the SJC reversed itself, in light of Amex. Dell’s arbitration agreement has finally been enforced.