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Ninth Circuit Court Dismisses Challenge to Consumer Arbitration in AT&T Case

In the case of Roberts v. AT&T Mobility, the Ninth Circuit court made a quick dismissal of a First Amendment challenge to consumer arbitration, finding there was no state action in this circumstance.

The plaintiffs in the case filed a class action lawsuit stating AT&T was guilty of falsely advertising its phone service as “unlimited,” despite its practices of throttling data speeds. AT&T moved to compel arbitration, and in response, the plaintiffs claimed to have a First Amendment right to bring the claim to court under the Petitions Clause.

However, the Ninth Circuit ruled this claim failed because no state action was involved in the case. According to this decision, parties have a private choice to arbitrate under the FAA, and that choice cannot be attributed to the state.

Analyzing the court’s decision

Critics of the decision say the Ninth Circuit’s rationale does not necessarily apply to all FAA cases. There are some circumstances in which meaningful consent could be lacking, and parties are forced to arbitrate under state action compulsion. While there are many appellate opinions that find a lack of state action in private arbitration cases, courts do occasionally apply some due process concepts to private arbitration processes.

If courts require due process standards in private arbitration cases, then it could be argued that these courts essentially are assuming the arbitration involves some form of state action.

For more information on this case and the Ninth Circuit’s decision, contact a knowledgeable Dallas whistleblower attorney at Whistleblower Law for Managers.

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