28 April 2011
With 22 U.S. Supreme Court arguments under his belt, Mayer Brown partner Andrew Pincus can point to some major accomplishments before the high court. In just the last five years, for instance, he's won two unanimous decisions (here and here) that raised the evidentiary bar for plaintiffs in antitrust cases.
Pincus scored his latest victory this week, convincing the Court to rule on Wednesday that California can't bar contract clauses that require customers to arbitrate claims individually rather than as a class. And while the ruling was far from unanimous--the Justices split 5-4 along ideological lines--it was a doozy. As we've already reported, the decision for Mayer Brown client AT&T gives companies the power to block costly class arbitration or litigation preemptively through contracts with customers and employees.
The majority explicitly endorsed AT&T's position that the Federal Arbitration Act preempts a California law that effectively invalidates class action waivers in arbitration agreements. Wednesday's ruling reverses a 2009 decision by the U.S. Court of Appeals for the Ninth Circuit, which concluded that AT&T's arbitration clause with cell phone customers was "unconscionable" under the California law and allowed the plaintiffs to join class action litigation against AT&T.
As far back as the cert petition stage, Pincus told us, he thought the plaintiffs' greatest vulnerability was their position that California could mandate a specific process for customers to resolve their claims, regardless of whether AT&T's individual arbitration provisions were fundamentally fair. In AT&T's brief to the high court, Mayer Brown pointed out that the company agreed to pay all costs for nonfrivolous claims; that customers could choose to bring their claim in small claims court in lieu of arbitration; and that AT&T could be required to pay a minimum of $7,500 if the customer received an arbitration award greater than AT&T's last written settlement offer.
"That's something that we stressed in our petition and in our briefs and that I talked about at the argument, because it seemed to me that they really had no answer," Pincus said. "California was saying you have to use our procedure even if you have another one that meets the fairness test. What the Court said is that the imposition of specified procedures, especially when they come right out the judicial system, is antithetical to the fundamental idea of arbitration." (You can read a transcript of the oral argument here.)
Pincus told us the ruling was especially gratifying because Mayer Brown had not only litigated the case in the lower courts, but had also helped AT&T develop the underlying arbitration clause. "When your colleagues and you have spent time really thinking through an issue and developing it and litigating through the lower courts, and then to have your position vindicated in the Supreme Court, it's a great thing both for the lawyers and for the client," he said.