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DIRECTV, Inc. v. Imburgia

DIRECTV, Inc. v. Imburgia

Supreme Court of the United States

October 6, 2015, Argued; December 14, 2015, Decided

No. 14-462

Opinion

 [*49]  Justice Breyer delivered the opinion of the Court.

The Federal Arbitration Act states that a “written provision” in a contract providing for “settle[ment] by arbitration” of “a controversy . . . arising out of” that “contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation  [**466]  of any contract.” 9 U.S.C. §2. We here consider a California court’s refusal to enforce an arbitration provision in a contract. In our [****5]  view, that decision does not rest “upon such grounds as exist . . . for the revocation of any contract,” and we consequently set that judgment aside.

DIRECTV, Inc., the petitioner, entered into a service agreement with its customers, including respondents Amy  [*50]  Imburgia and Kathy Greiner. Section 9 of that contract provides that “any Claim either of us asserts will be resolved only by binding arbitration.” App. 128. It then sets forth a waiver of class arbitration, stating that “[n]either you nor we shall be entitled to join or consolidate claims in arbitration.” Id., at 128-129. It adds that if the “law of your state” makes the waiver of class arbitration unenforceable, then the entire arbitration provision “is unenforceable.” Id., at 129. Section 10 of the contract states that §9, the arbitration provision, “shall be governed by the Federal Arbitration Act.” Ibid.

In 2008, the two respondents brought this lawsuit against DIRECTV in a California state court. They seek damages for early termination fees that they believe violate California law. After various proceedings not here relevant, DIRECTV, pointing to the arbitration provision, asked the court to send the matter to  [***370]  arbitration. The state trial court denied that request, and [****6]  DIRECTV appealed.

The California Court of Appeal thought that the critical legal question concerned the meaning of the contractual phrase “law of your state,” in this case the law of California. Does the law of California make the contract’s class-arbitration waiver unenforceable? If so, as the contract provides, the entire arbitration provision is unenforceable. Or does California law permit the parties to agree to waive the right to proceed as a class in arbitration? If so, the arbitration provision is enforceable.

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577 U.S. 47 *; 136 S. Ct. 463 **; 193 L. Ed. 2d 365 ***; 2015 U.S. LEXIS 7999 ****; 84 U.S.L.W. 4018; 166 Lab. Cas. (CCH) P61,659; 25 Fla. L. Weekly Fed. S 567; 63 Comm. Reg. (P & F) 1442

DIRECTV, INC., Petitioner v. AMY IMBURGIA, et al.

Notice: The LEXIS pagination of this document is subject to change pending release of the final published version.

Subsequent History: On remand at, Decision reached on appeal by Imburgia v. DIRECTV, Inc., 2016 Cal. App. Unpub. LEXIS 3238 (Cal. App. 2d Dist., May 4, 2016)

Prior History:  [****1] ON WRIT OF CERTIORARI TO THE COURT OF APPEAL OF CALIFORNIA, SECOND APPELLATE DISTRICT.

Imburgia v. DIRECTV, Inc., 225 Cal. App. 4th 338, 170 Cal. Rptr. 3d 190, 2014 Cal. App. LEXIS 312 (Cal. App. 2d Dist., Apr. 7, 2014)

Disposition: Reversed and remanded.

CORE TERMS

arbitration, consumers, unenforceable, parties, state law, arbitration agreement, federal arbitration, invalid, class-arbitration, customers, courts, contracts, arbitration provision, ambiguous, terms, disputes, preempted, drafted, class action, bilateral, words, adhesion contract, federal law, home state, contractual, drafter, service agreement, state court, mandatory, grounds

Business & Corporate Compliance, Arbitration, Federal Arbitration Act, Arbitration Agreements, Scope, Contracts Law, Defenses, Unconscionability, Adhesion Contracts, Constitutional Law, Supremacy Clause, Federal Preemption, Alternative Dispute Resolution, Waiver, Supreme Law of the Land, Governments, Courts, Judicial Precedent, Supremacy Clause, Civil Procedure, Preliminary Considerations, Federal & State Interrelationships, Contract Interpretation, Contract Conditions & Provisions, Contracts Law, Contract Conditions & Provisions, Legislation, Interpretation, Contract Interpretation, Ambiguities & Contra Proferentem