Document ID: ./input/supremecourt_opinions/opinions/10pdf/09-893.pdf
Page Number: 2

2 

AT&T MOBILITY LLC v. CONCEPCION 

Syllabus 

formation Sciences, Inc. v. Board of Trustees of Leland Stanford Jun-
ior  Univ.,  489  U. S.  468,  478.    Section  2’s  saving  clause  permits
agreements  to  be  invalidated  by  “generally  applicable  contract  de-
fenses,”  but  not  by  defenses  that  apply  only  to  arbitration  or  derive
their  meaning  from  the  fact  that  an  agreement  to  arbitrate  is  at  is-
sue.  Doctor’s Associates, Inc. v. Casarotto, 517 U. S. 681, 687.  Pp. 4– 
5. 

(b) In Discover Bank, the California Supreme Court held that class 
waivers  in  consumer  arbitration  agreements  are  unconscionable  if
the agreement is in an adhesion contract, disputes between the par-
ties  are  likely  to  involve  small  amounts  of  damages,  and  the  party
with  inferior  bargaining  power  alleges  a  deliberate  scheme  to  de-
fraud.  Pp. 5–6.

(c) The Concepcions claim that the Discover Bank rule is a ground
that  “exist[s]  at  law  or  in  equity  for  the  revocation  of  any  contract” 
under FAA §2.  When state law prohibits outright the arbitration of a
particular type of claim, the FAA displaces the conflicting rule.  But 
the  inquiry  is  more  complex  when  a  generally  applicable  doctrine  is
alleged to have been applied in a fashion that disfavors or interferes
with  arbitration.    Although  §2’s  saving  clause  preserves  generally 
applicable contract defenses, it does not suggest an intent to preserve
state-law  rules  that  stand  as  an  obstacle  to  the  accomplishment  of
the  FAA’s  objectives.  Cf.  Geier  v.  American  Honda  Motor  Co.,  529 
U. S.  861,  872.    The  FAA’s  overarching  purpose  is  to  ensure  the  en-
forcement of arbitration agreements according to their terms so as to
facilitate  informal,  streamlined  proceedings.    Parties  may  agree  to
limit  the  issues  subject  to  arbitration,  Mitsubishi  Motors  Corp.  v. 
Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 628, to arbitrate accord-
ing to specific rules, Volt, supra, at 479, and to limit with whom they 
will arbitrate, Stolt-Nielsen, supra, at ___.  Pp. 6–12.

(d) Class  arbitration,  to  the  extent  it  is  manufactured  by  Discover 
Bank rather than consensual, interferes with fundamental attributes 
of  arbitration.    The  switch  from  bilateral  to  class  arbitration  sacri-
fices  arbitration’s  informality  and  makes  the  process  slower,  more
costly,  and  more  likely  to  generate  procedural  morass  than  final
judgment.    And  class  arbitration  greatly  increases  risks  to  defen-
dants.  The absence of multilayered review makes it more likely that
errors will go uncorrected.  That risk of error may become unaccept-
able when damages allegedly owed to thousands of claimants are ag-
gregated  and  decided  at  once.    Arbitration  is  poorly  suited  to  these 
higher  stakes.    In  litigation,  a  defendant  may  appeal  a  certification
decision  and  a  final  judgment,  but  9  U. S. C.  §10  limits  the  grounds 
on which courts can vacate arbitral awards.  Pp. 12–18. 

584 F. 3d 849, reversed and remanded.