Opinion ID: 2541602
Heading Depth: 1
Heading Rank: 5

Heading: Application of Concepcion

Text: Concepcion instructs clearly that a court cannot invalidate an arbitration agreement on the sole basis that it contains a class waiver. Id. at 1748. As such, Concepcion invalidates this Court's reasoning in Brewer I that concluded that the unconscionable aspects of the arbitration agreement in that case were a result of the class arbitration waiver. See Brewer I, 323 S.W.3d at 24; see also Ruhl v. Lee's Summit Honda, 322 S.W.3d 136 (Mo. banc 2010) (citing Brewer I 's unconscionability reasoning and invalidating an entire arbitration agreement when the class waiver was found unconscionable). Concepcion, however, does not require that courts simply must declare that an arbitration agreement containing a class waiver is enforceable. Concepcion reiterates that courts assessing the enforceability of an arbitration agreement must continue to consider the enforceability of an arbitration agreement in light of the section 2 saving clause. See 131 S.Ct. at 1746-48. As such, arbitration agreements are tested through a lens of ordinary state-law principles that govern contracts, and consideration is given to whether the arbitration agreement is improper in light of generally applicable contract defenses. See Cruz v. Cingular Wireless, LLC, 648 F.3d 1205, 1210 (11th Cir.2011) (indicating that the FAA's section 2 saving clause and Concepcion permit the analysis of whether a class waiver in an arbitration agreement is enforceable to include consideration of whether the arbitration agreement is valid in light of generally applicable contract defenses). An arbitration agreement could be declared unenforceable if a generally applicable contract defense, such as fraud, duress, or unconscionability, applied to concerns raised about the agreement. Cf. 131 S.Ct. at 1746 (saving clause permits agreements to arbitrate to be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability (internal quotations omitted)). Concepcion, however, will not allow an arbitration agreement to be invalidated by any defense that is applied in a way that singles out or disfavors arbitration, as Concepcion instructs that no state-law rule that is an obstacle to the accomplishment of the FAA's objectives should be applied to invalidate an arbitration agreement. See 131 S.Ct. at 1748; see also Cruz, 648 F.3d at 1210-11 (noting that Concepcion rejected the  Discover Bank rule because it was cast as an application of unconscionability doctrine, [but] in effect, it set forth a state policy placing bilateral arbitration categorically off-limits for certain categories of consumer fraud cases, upon the mere ex post demand by any consumer). Any state-law rule testing the enforceability of an arbitration agreement cannot interfer[e] with fundamental attributes of arbitration or creat[e] a scheme inconsistent with the FAA. See Concepcion, 131 S.Ct. at 1748. As such, post- Concepcion, a court should not invalidate an arbitration agreement in a consumer contract simply because it is contained in a contract of adhesion or because the parties had unequal bargaining power, as these are hallmarks of modern consumer contracts generally. See id. at 1750 (noting that the times in which consumer contracts were anything other than adhesive are long past); Cruz, 648 F.3d at 1215 (reasoning that, post-Concepcion, the fact that an arbitration agreement is contained in an adhesion contract is not alone sufficient to invalidate the agreement). Moreover, post-Concepcion, courts may not apply state public policy concerns to invalidate an arbitration agreement even if the public policy at issue aims to prevent undesirable results to consumers. See Concepcion, 131 S.Ct. at 1753 (rejecting consumers' public policy concerns about small-dollar claims slipping through the legal system because states cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons); see also Cruz, 648 F.3d at 1212-13 (discussing that Concepcion does not permit the decision about the viability of the class waiver in the arbitration agreement to rest on sympathies for arguments that class arbitration is the best mechanism to protect the small-value claims of numerous consumers; rejecting applying Florida law in a way that would require availability of class arbitration to guard consumers against the risks that small-dollar claims will not be brought unless plaintiffs can proceed as a class; and declaring that such a state rule would be inconsistent with and preempted by the FAA). [12] Applying state-law policy considerations as the basis for invalidating an arbitration agreement is preempted by the FAA because it creates an impermissible obstacle to the FAA's objective of enforcing arbitration agreements according to their terms. Cruz, 648 F.3d at 1212-13. As noted in this Court's companion opinion in Brewer II, this Court's conclusion that the FAA does not allow state-law policy considerations to be used to invalidate an arbitration agreement recently was confirmed by the Supreme Court's holding in Marmet Health Care Center, Inc., v. Brown, ___ U.S. ___, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012) (reversing a state court ruling holding that the FAA did not preempt the state's public policy against predispute arbitration agreements related to personal injury and wrongful death claims against nursing homes; finding that the state court's application of a public policy rationale was contrary to Concepcion and the terms of the FAA; and remanding for additional findings regarding whether, absent a public policy rationale, the arbitration clause at issue was unenforceable under state common law principles that are not specific to arbitration and pre-empted by the FAA).