On December 14th, the United States Supreme Court ruled in DirecTV v. Imburgia, in a 6-3 decision, that California consumers can be bound by the satellite-TV provider's mandatory arbitration clause, which includes a class action waiver. The clause itself provides that it will be unenforceable where class action waivers are unenforceable under "the law of your state." When the provision was drafted, class action waivers were impermissible in California under Discover Bank v. Superior Court. But then the Supreme Court issued its landmark ruling in AT&T Mobility LLC v. Concepcion, invalidating Discover Bank as preempted by the Federal Arbitration Act. This decision left the enforceability of DirecTV's arbitration clause in flux in California, with an appellate court in California holding that the law at the time of drafting (i.e., Discover Bank) should control. But the Supreme Court rejected that notion, stating that it can "find nothing in that opinion (nor in any other California case) suggesting that California would generally interpret words such as 'law of your state' to include state laws held invalid..." This decision, the latest in a series of federal and state rulings lawfully and legally upholding class waivers in arbitration agreements, will have application beyond the consumer context and to employer–employee agreements.
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