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I was reading about forced arbitration clauses, or class action wavers, which are a type of contract of adhesion which can come with some products and services. Historically, these were deemed unenforceable;

for good reason, I think, because if eventually every service or product came with a contract which prevented consumers from filing a lawsuit or class action if, say, for instance, the product or service caused injury or death, like a car with braking system flaws, or a child's toy that causes cancer, etc, then we'd live in a world where corporations could shove whatever they wanted down our throats, cause injuries and death, and we could do nothing about it, because we "agreed to a contract" by using their product or service in the first place (and in this scenario there would be no alternatives, so you either risk using products that could kill you, or you go live in a cave or something).

So while I was reading about arbitration clauses, I learned about "ATT Mobility vs Concepcion", which is the case which changed the precedent, and allowed these kinds of clauses to be enforced.

What I want to know is, does this mean that arbitration clauses will always be enforced now? or does it simply mean that in certain cases they can be enforced?

Does a supreme court case set the precedent for how all similar cases from that point forward will be decided? because I've always heard supreme court cases referred to in such situations; as if they mean that such cases have already been settled due to one supreme court case involving a similar subject.

ohwilleke
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Sebastian Hahn
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2 Answers2

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Mandatory arbitration clauses specify a particular type of dispute resolution, excluding resort to the court system. A class arbitration waiver prohibits more than one similarly situated person from joining forces - in arbitration - to pursue their claims together. The former may exist without the latter, though this is less common than before the holding in AT&T v. Concepcion.

Mandatory arbitration clauses were already commonplace (and frequently enforceable) before AT&T v. Concepcion. The key issue in that case was whether the class arbitration waiver was enforceable: indeed, it was.

The customers suing AT&T had been successful in the lower courts by relying on California case law, under which some class arbitration waivers were not enforceable. The U.S. Supreme Court held that such case law was inconsistent with, and thus preempted by federal law--the Federal Arbitration Act.

The calculus for whether an arbitration clause is enforceable did not change much in light of AT&T v. Concepcion. However, now, when it is enforceable, it may require that each person with a complaint pursue it individually.

emanon
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We have an answer on stare decisis and precedent.

After the Supreme Court decides a case, if a lower court rules on a case with the same fact pattern as the previously decided Supreme Court case, they are bound to come to the same outcome.

They can arrive at a different outcome only if they find aspects of the new case that materially distinguish it from the Supreme Court case.

Regarding the specific case you mention, my reading of AT&T Mobility LLC v. Concepcion 563 U.S. ___ (2011) is that it holds that consumer contracts can include clauses that prohibit class-wide-arbitration.

Community
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K-C
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