DIRECTV, Inc. v. Imburgia Case Brief

Facts of the Case

Petitioner DIRECTV, Inc., and its customers entered into a service agreement that included a binding arbitration provision with a class-arbitration waiver. It specified that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable. The agreement also declared that the arbitration clause was governed by the Federal Arbitration Act. At the time that respondents, California residents, entered into that agreement with DIRECTV, California law made class-arbitration waivers unenforceable. The Supreme Court of the United States subsequently held in, however, that California’srule was pre-empted by the Federal Arbitration Act,.

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CONCLUSION

“The Federal Arbitration Act preempts state law, so the court has to enforce the arbitration agreement. Justice Stephen G. Breyer delivered the opinion of the 6-3 majority. The Court held that requiring contract enforcement under California state law that the Supreme Court had held was invalid under AT&T Mobility LLC v. Concepcion would conflict with the Federal Arbitration Act. Absent any indication that the language of the contract is meant to refer to invalid state law, it should be construed as only referring to valid state law, which is consistent with California state law. The Court also noted that there was no indication that a California court would apply state law that has been held to be invalid because it conflicts with federal law to any other context. Even in the canon of cases that determine that ambiguous language in a contract should be construed against the party that drafted the language, there is no case that goes so far as to apply invalid state law.Justice Clarence Thomas wrote a dissent in which he argued that the Federal Arbitration Act did not apply to state courts and therefore did not require the court to order arbitration in this case. In her separate dissent, Justice Ruth Bader Ginsburg wrote that the provision should be construed against the drafting party so as to give the consumer the ability to pursue class-based litigation. Because the relevant question should be whether both parties agreed to be bound by relevant state law as framed by the state legislature without considering the preemptive effect of federal law, the California state court’s decision should control this case. Although the Federal Arbitration Act contains a presumption in favor of arbitration, the presumption only applies when the express agreement to arbitrate was validly formed, which is not the case when consumers lack bargaining power in the creation of such contracts. Justice Sonia Sotomayor joined in the dissent.”

Case Information

Citation: 577 US (2015)
Granted: Mar 23, 2015
Argued: Oct 6, 2015
Decided: Dec 14, 2015
Case Brief: 2015