Ninth Circuit Hears Oral Argument on Constitutional Challenge to Federal Arbitration Act
Earlier this week, the Ninth Circuit heard oral argument in Roberts v. AT&T Mobility LLC (Case No. 16-16915). In 2015, a putative class of consumers sued AT&T in the Northern District of California, alleging that AT&T misled consumers about its “unlimited” data plans by misrepresenting its data speeds and failing to disclose that it would “throttle” data after a certain point. AT&T moved to compel arbitration, and the plaintiffs raised a novel argument in opposition: The Federal Arbitration Act violates the First Amendment because, as construed by AT&T Mobility LLC v. Concepcion and its progeny, it denies consumers the right to petition the government for a redress of grievances. In 2016, the district court (Chen, J.) rejected this argument. The district court did not reach the merits of the plaintiffs’ Petition Clause argument; instead, it held as a threshold matter that the plaintiffs could not raise a constitutional challenge to the FAA because AT&T’s act of seeking to compel enforcement of an arbitration agreement did not constitute state action. No. 15-3418, 2016 WL 1660049, at *4-10 (N.D. Cal. Apr. 27, 2016). The district court nonetheless noted that the application of the state action doctrine to this argument presented “novel and difficult questions of first impression” and accordingly certified an interlocutory appeal to the Ninth Circuit on the state action issue. No. 15-3418, 2016 WL 3476099, at *2 (N.D. Cal. June 27, 2016).
Although the Ninth Circuit will likely take weeks (if not months) to issue its opinion, early coverage of the oral argument suggests that the plaintiffs’ argument may not fare well. According to Law360, one of the judges on the panel inquired whether the plaintiffs were asking the court “to tell the Supreme Court in hindsight [that] the [J]ustices were wrong in their Concepcion ruling.” We will update this post when the Ninth Circuit issues its ruling.