Ninth Circuit Strikes Cingular Class Arb Waiver

Arbitration junkies will want to read today's Ninth Circuit opinion in Schroyer v. New Cingular Wireless Services, written by Judge Reinhardt. "In this case," the opinion begins, "we consider whether a class arbitration waiver in New Cingular Wireless Service Inc.'s standard contract for cellular phone services is unconscionable under California law, and whether the Federal Arbitration Act preempts a holding that the waiver is unenforceable." Building on the California Supreme Court's decision in Discover Bank, and the Ninth Circuit's prior decisions in Ingle, Ting, and Nagrampa, the court holds that the waiver is unconscionable, and, thus, unenforceable, and that the invalidation of the contract provision is not preempted by the FAA.