Contract After Concepcion: Some Lessons from the State Courts

In AT&T Mobility LLC v. Concepcion, the United States Supreme Court held that the Federal Arbitration Act (FAA) preempts the use of unconscionability doctrine to invalidate arbitration clauses that foreclose classwide remedies.'The Court found that requiring the availability of classwide arbitration raises costs and prolongs disputes, thereby interfering with the "fundamental attributes of arbitration" at the core of the FAA. 2 The majority construed the FAA to allow for the invalidation of arbitration clauses "by 'generally applicable contract defenses, such as fraud, duress, or unconscionability,' but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.' 3 The five-to-four decision in Concepcion was quickly lambasted as brazenly conservative 4 and anti-consumer.5 More recently, some scholars have raised a different concern: that Concepcion signals the federal colonization of state contract law.6 Casting aside Justice Brandeis's observation that "a single courageous state" must sometimes be permitted to "serve as a laboratory," 7 the Supreme Court has instead insisted that the presence of an arbitration clause 1. 131 S. Ct.