Amicus Curiae Brief — Directv, Inc. v. Imburgia, 135 S. Ct. 1547 (2015) (No. 14-462)

No. 14-462

In The

Supreme Court of the Anited States

+

DIRECTV, INc.,

Petitioner,

v.

AMY IMBURGIA, ET AL.,

Respondents.

+

On Writ of Certiorari to the

California Court of Appeal,

Second District

S

BRIEF OF AMICUS CURIAE

DRI—THE VOICE OF THE DEFENSE BAR

IN SUPPORT OF PETITIONER DIRECTV, INC.

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HORVITZ & LEVY LLP

David M. AXELRAD nee of Record)

FELIX SHAFIR

JOHN F. QUERIO

15760 VENTURA BOULEVARD, 18TH FLOOR

ENCINO, CALIFORNIA 91436-3000

(818) 995-0800

daxelrad@horvitzlevy.com

fshafir@horvitzlevy.com

jquerio@horvitzlevy.com

Counsel for Amicus Curiae

DRI—The Voice of the Defense Bar

TABLE OF AUTHORITIES

INTEREST OF AMICUS CURIAE

Il.

Ii.

IV. THE CALIFORNIA COURT OF

APPEAL’S DECISION IN THIS CASE IS

SIMPLY THE LATEST ATTEMPT TO

EVADE CONCEPCION AND THE FAA..

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i

TABLE OF CONTENTS

THE CALIFORNIA SUPREV | COURT

HAS LONG RESISTED THE FAA’S

PREEMPTIVE EFFECT. ..................c00s00-

IN CONCEPCION AND ITALIAN

COLORS, THIS COURT CLARIFIED

THE BROAD PREEMPTIVE SCOPE OF

THE FAA, CRITICIZED STATE COURT

EFFORTS TO RESIST ARBITRATION,

AND REJECTED THE COST OF

VINDICATING STATUTORY RIGHTS

IN ARBITRATION AS A REASON FOR

NOT ENFORCING CLASS

ARBITRATION WAIVERS. ................0:0000-

SINCE CONCEPCION, STATE COURTS

HAVE CONTINUED TO RESIST THE

PREEMPTIVE EFFECT OF THE FAA....

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12

.. 27

‘i

TABLE OF AUTHORITIES

Page(s)

Cases

Am. Express Co. v. Italian Colors Rest.,

570 U.S. __, 133 S. Ct. 2304 (2013)........... passim

Armendariz v. Foundation Health

Psychcare Services, Inc.,

24 Cal. 4th 83, 6 P.3d 669

RA ISS as vee Mae 7, 8, 9, 10, 17

AT&T Mobility LLC v. Concepcion,

563 U.S. _. 131 S. Ct. 1740 (2011)............ passim

Atalese v. U.S. Legal Services Group, L.P.,

219 N.J. 430, 99 A.3d 306 (2014),

petition for cert. filed, U.S.L.W. __

(U.S. Jan. 21, 2015) (No. 14-882) .............000..... 26

Brewer v. Missouri Title Loans, ,

364:/S.W.3d 486 (Mo. 2012) ......0............00000. 24, 25

Broughton v. Cigna Healthplans of Cal.,

21 Cal. 4th 1066, 988 P.2d 67 (1999) ......... 5, 6, 7

Coleman v. Prudential Bache Sec., Inc.,

802 F.2d 1350 (11th Cir. 1986)......................... 19

Cruz v. PacifiCare Health Sys., Inc.,

30 Cal. 4th 303, 66 P.3d 1157 (2003) ................. 6

Discover Bank v. Superior Court,

36 Cal. 4th 148, 113 P.3d 1100

IE rrccensccspssencencscsensnnusnnsntnesssiss 9, 10, 11, 13, 28

Ex parte McNaughton,

On i 19

Ferguson v. Corinthian Colls., Inc.,

733 F.3d 928 (Sth Cir. 20193)....................cc0ccce00e0s 6

Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta,

I UIT heccicneistindesiainibinniesisinpnainnians 4, 29

Gandee v. LDL Freedom Enterprises, Inc.,

176 Wash. 2d 598, 293 P.3d 1197 (2013) ... 23, 24

Gentry v. Superior Court,

42 Cal. 4th 443, 165 P.3d 556 (2007) ... 10, 11, 20

Gilmer v. Interstate/Johnson Lane Corp.,

SESE PR eenmconae 6, 7

Hauenstein v. Lynham,

EEE REIS ARE eR aD 29

In re Am. Express Merchs.’ Litig.,

667 F.3d 204 (2d Cir. 2012) .......0...cccccccccoeeeee00e 14

Iskanian v. CLS Transportation Los Angeles, LLC,

59 Cal. 4th 348, 327 P.3d 129 (2014) ......... 20, 21

Kelker v. Geneva-Roth Ventures, Inc.,

369 Mont. 254, 303 P.3d 777 (2013)................. 25

Little v. Auto Stiegler, Inc.,

29 Cal. 4th 1064, 63 P.3d 979 (2003) ....... 8, 9, 10

Marmet Health Care Ctr., Inc. v. Brown,

eG hidbsdssdidiccenindannsemeneionnenens 4, 21, 22, 29

iv

Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, Inc.,

i] | Gf 6, 17, 23

Morales v. Sun Constructors, Inc.,

541 F.3d 218 (Gd Cir. 2006) .......ccccccccccccccccesseees 26

Mortensen v. Bresnan Commc’ns, LLC,

722 F.3d 1161 (Oth Cir. 20138)...........ccccccccceeeeses 25

Murphy v. DIRECTV, Inc.,

724 F.3d 1218 (9th Cir. 2013)..................004. 4, 28

Nitro-Lift Techs., L.L.C. v. Howard,

Perry v. Thomas,

I acai ininiaiiaitiiiciidinieentiing 8, 23

Reed Elsevier, Inc. ex rel. LexisNexis Div.

v. Crockett,

734 F.3d 504 (Gth Cir. 2013)................ccccccccceses 19

Schnuerle v. Insight Communications Co.,

376 S.W.3d 561 (Ky. 2012)............sccccecccccccccerees 23

Shearson/Am. Express, Inc. v. McMahon,

ST icnasdeiineinitibisitnbiabennionnidinean 6, 18

Sonic-Calabasas A, Inc. v. Moreno (Sonic J),

51 Cal. 4th 659, 247 P.3d 130 (2011) ......... 11, 16

Sonic-Calabasas A, Inc. v. Moreno,

665 US. __. 182 S. Ct. 496 (2011) ................2... 16

Vv

Sonic-Calabasas A, Inc. v. Moreno (Sonic IJ),

57 Cal. 4th 1109, 311 P.3d 184

Teel scicncnsnhnnenensignntnnesssncinioennedens 16, 17, 18, 19, 21

Southland Corp. v. Keating,

EE 23

Sutherland v. Ernst & Young LLP,

847 F. Supp. 2d 528 (S.D.N.Y. 2012),

rev d, 726 F.3d 290 (2d Cir. 2013) .................... 14

Testa v. Katt,

I ae cslaa ieee 29

THI of N.M. at Hobbs Ctr., LLC v. Patton,

741 F.3d 1162 (10th Cir. 2014).....00...0000000.0000.. 20

Truly Nolen of Am. v. Superior Court,

208 Cal. App. 4th 487,

145 Cal. Rotr. 3d 432 (2012)..................0000..0000 13

Constitutions

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INTEREST OF AMICUS CURIAE!

Amicus curiae DRI—the Voice of the Defense

Bar (DRI) is an international organization that

includes more than 21,000 members involved in the

defense of civil litigation. DRI has long been a voice in

the ongoing effort to make the civil justice system more

fair and efficient. To that end, DRI regularly

participates as amicus curiae in cases that raise issues

of vital concern to its members, their clients, and the

judicial system.

This case is of significant interest to DRI

because its members routinely represent clients

seeking to compel arbitration of claims brought under

consumer protection, wage and hour, or other state

laws that are subject to binding arbitration clauses.

Accordingly, DRI’s members are familiar with the

common occurrence of state courts refusing to enforce

arbitration clauses (including in class action litigation)

because of state public policy, unconscionability

principles, or other tenets of state law.

This case represents the latest in a long line of

state court cases refusing to enforce the preemptive

1 This brief was authored by amicus curiae and its

counsel listed on the front cover, and was not authored in whole or

in part by counsel for a party. No one other than amicus curiae,

its members, or its counsel has made any monetary contribution

to the preparation or submission of this brief. Amicus curiae has

notified the parties of its intention to file this brief. All parties

provided written consent to the filing of amicus curiae briefs, and

this written consent is on file with this Court.

2

mandate of the Federal Arbitration Act (FAA) that

arbitration clauses be enforced according to their

terms. Of particular concern to DRI and its members

is the California Court of Appeal’s refusal to

acknowledge the basic constitutional principle,

embodied in the Supremacy Clause of the U.S.

Constitution, that federal law is part of the law of

every state and that state law to the contrary is

invalid.

DRI and its members seek uniform application

of the FAA across the nation in order to ensure that

arbitration can achieve its basic purpose of resolving

disputes efficiently, predictably, and at minimal cost.

The California Court of Appeal’s decision in this case

thwarts that goal. This Court should reverse the

California Court of Appeal’s decision.

s

SUMMARY OF ARGUMENT

Enacted “in response to widespread judicial

hostility to arbitration,” the Federal Arbitration Act

(FAA) requires courts to “rigorously enforce’

arbitration agreements according to their terms,”

including the terms setting “the rules under which

that arbitration will be conducted.” Am. Express Co. v.

Italian Colors Rest. (Italian Colors), 570 U.S.__, 1338S.

Ct. 2304, 2308-09 (2013).

As this Court has recognized, “[s]tate courts

rather than federal courts are most frequently called

upon to apply the [FAA], including the Act’s national

policy favoring arbitration. It is a matter of great

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importance, therefore, that state supreme courts

adhere to a correct interpretation of the legislation.”

Nitro-Lift Techs., L.L.C. v. Howard, 568 U.S. __, 133 S.

Ct. 500, 501 (2012) (per curiam). Unfortunately, state

courts have long exhibited the very “judicial hostility

towards arbitration that prompted the FAA” decades

ago, and have employed “a great variety’ of ‘devices

and formulas” to avoid enforcing arbitration

agreements. AT&T Mobility LLC v. Concepcion, 563

U.S. __, 131 S. Ct. 1740, 1747 (2011). “California’s

courts” in particular “have been more likely” to apply

their own state laws to preclude the enforcement of

arbitration agreements. /d.

Before this Court’s seminal decision in

Concepcion, the California Supreme Court used various

devices to evade the preemptive force of the FAA.

Beginning in 1999, in an effort to ensure that plaintiffs

could vindicate state statutory rights that California

had deemed essential as a matter of state public policy,

California's high court held that the FAA did not

preempt state public policies that prohibited

enforcement of certain types of arbitral procedures or

arbitration of particular types of claims. But

Concepcion made clear that state courts had been

wrong in so narrowly construing the preemptive scope

of the FAA, holding that “[t]he ‘principal purpose’ of

the FAA is to ‘ensurfe] that private arbitration

agreements are enforced according to their terms” and

that states cannot—whether in the guise of

unconscionability, public policy, or some other state

law defense—“require a procedure that is inconsistent

with the FAA, even if it is desirable for unrelated

reasons.” Jd. at 1747-48, 1753.

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Despite Concepcion’s sharp rebuke, California

and other state courts have persisted in using

unconscionability, vindication of state public policy,

and similar rationales to resist the mandate of the

FAA. The California Court of Appeal’s opinion in this

case is simply the latest example of this continuing

trend. That court interpreted the arbitration clause in

DIRECTV’s customer agreement by looking to

California law directly overruled by Concepcion. Pet.

App. 6a-10a. This reading violates the Supremacy

Clause of the U.S. Constitution, as there is no such

thing as state law divorced from the preemptive effect

of federal law. Fid. Fed. Sav. & Loan Ass'n v. de la

Cuesta, 458 U.S. 141, 157 & n.12 (1982); see also

Murphy v. DIRECTV, Inc., 724 F.3d 1218, 1225-26 (9th

Cir. 2013). California may not “opt out” of the

Supremacy Clause, no matter how important its

contrary state policy may be. “When this Court has

fulfilled its duty to interpret federal law, a state court

may not contradict or fail to implement the rule so

established. See U.S. Const., Art. VI, cl. 2.” Marmet

Health Care Ctr., Inc. v. Brown, 565 U.S. __, 1382S. Ct.

1201, 1202 (2012) (per curiam).

This brief will trace the history of California and

other state courts’ efforts to avoid enforcing arbitration

agreements according to their terms, as mandated by

the FAA, and will show how that unfortunate trend

continues to this day. As this historical overview

confirms, this Court’s ongoing vigilance is necessary to

ensure that state courts do not thwart the FAA’s

purpose as they have so often done in the past. This

Court should hold that state courts cannot divorce

their own laws from the FAA and should direct

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California courts in particular—with their long history

of attempts to evade the FAA’s mandate—to enforce

arbitration agreements according to their terms, as

federal arbitration law commands.

+

ARGUMENT

I. THE CALIFORNIA SUPREME COURT HAS

LONG RESISTED THE FAA’S

PREEMPTIVE EFFECT.

The California Court of Appeal’s effort to

circumvent the FAA in this case is not a unique

occurrence. Rather, it is part of a long-standing

hostility among state courts towards the FAA.

California in particular has a history of aggressively

refusing to enforce arbitration agreements,

notwithstanding this Court’s rulings to the contrary.

See Concepcion, 131 S. Ct. at 1747. To illustrate the

point, we provide a brief history of the California

Supreme Court’s longstanding resistance to this

Court’s FAA precedents.

1. Broughton. In a 1999 opinion, the

California Supreme Court recognized that this Court’s

decisions had previously discussed “whether Congress

had intended federal statutory claims to be exempt

from arbitration.” Broughton v. Cigna Healthplans of

Cal., 21 Cal. 4th 1066, 1082-83, 988 P.2d 67, 78 (1999)

(second emphasis added). Broughton, however, applied

this Court’s “vindication” of federal claims to claims

asserting state statutory rights under California’s

Consumers Legal Remedies Act, in order to avoid a

6

perceived potential for “the vitiation through

arbitration of the substantive rights afforded by” state

statutes. Jd. at 1083, 988 P.2d at 79; see also Cruz v.

PacifiCare Health Sys., Inc., 30 Cal. 4th 303, 307, 66

P.3d 1157, 1159 (2003) (reaffirming Broughton’s

holding and extending it to forbid arbitration of public

injunctive relief claims brought under California's

Unfair Competition Law and False Advertising Law).

The California Supreme Court failed to

appreciate that while Congress is free to enact federal

laws that override or limit earlier federal laws,

including the FAA, the states are not. The federal

rights vindication exception posited by this Court

derives from “the congressional intention expressed in

some other [federal] statute” in which “Congress itself

has evinced an intention” to exempt federal statutory

rights from arbitration. Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 627-28

(1985) (emphases added). In that narrow context, this

Court has suggested that, where a party cannot

effectively vindicate a federal statutory claim in the

arbitral forum, an inherent conflict may exist between

arbitration and the underlying purpose of a federal

statute sufficient to override the FAA’s mandate. See

Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20,

27-28 (1991); Shearson/Am. Express, Inc. v. McMahon,

482 U.S. 220, 226-27, 242 (1987).

In short, the so-called “vindication” exception to

the FAA is “reserved for claims brought under federal

statutes” because it “rest[s] on the principle that other

federal statutes stand on equal footing with the FAA.”

Ferguson v. Corinthian Colls., Inc., 733 F.3d 928, 936

(9th Cir. 2013); see also Nitro-Lift, 133 S. Ct. at 504

7

(“[T]he ancient interpretive principle that the specific

governs the general. . applies only to conflict between

laws of equivalent dignity. Where a specific statute,

for example, conflicts with a general constitutional

provision, the latter governs. And the same is true

where a specific state statute conflicts with a general

federal statute. There is no general-specific exception

to the Supremacy Clause a

But, in Broughton, the California Supreme

Court held a vindication defense may be applied to

hold that state statutory claims survive FAA

preemption because arbitration is inappropriate where

the arbitral forum “cannot necessarily afford” al] the

procedural “advantages” available in court. 21 Cal. 4th

at 1083, 988 P.2d at 78-79.

2. Armendariz. One year after it decided

Broughton, the California Supreme Court held, in

Armendariz v. Foundation Health Psychcare Services,

Inc., 24 Cal. 4th 83, 90-91, 99-103, 6 P.38d 669, 674,

679-82 (2000), that courts can, as a matter of state

public policy, refuse to enforce mandatory employment

agreements to arbitrate unwaivable state statutory

claims for employment discrimination if the procedures

the parties adopted in their contract threaten the

ability of a party to fully and effectively vindicate a

state statutory claim in the arbitral forum. Jd. at 99-

103, 6 P.3d at 680-82 (citing Broughton, 21 Cal. 4th at

1087, 988 P.2d at 81-82, and Gilmer, 500 U.S. at 27-

28). Armendariz reasoned that this refusal to enforce

was not preempted by the FAA because federal cases

permitted courts not to enforce arbitration agreements

where the “arbitral forum” would not be “adequate” to

8

vindicate certain statutory rights. See Armendariz, 24

Cal. 4th at 98-99, 6 P.3d at 679-80.

Armendariz also held the arbitration clause at

issue to be unconscionable. Rather than apply general

principles of unconscionability law, the court invented

arbitration-specific rules mandating a “modicum of

bilaterality” in arbitration—i.e., that an arbitration

clause required as a condition of employment must

apply to both claims more likely to be brought by an

employer and claims more likely to be brought by an

employee. Jd. at 117-18, 6 P.3d at 692-93. In reaching

this conclusion, the California Supreme Court rejected

the notion that its version of unconscionability law

impermissibly “takes its meaning precisely from the

fact that a contract to arbitrate is at issue,” Perry v.

Thomas, 482 U.S. 483, 492 n.9 (1987), and thus was

preempted by the FAA. Instead, it held that “ordinary

principles of unconscionability may manifest

themselves in forms peculiar to the arbitration

context.” Armendariz, 24 Cal. 4th at 119, 6 P.3d at

693.

3. Little. Next, in Little v. Auto Stiegler,

Inc., 29 Cal. 4th 1064, 1076-81, 63 P.3d 979, 987-90

(2003), the California Supreme Court reiterated

Armendariz’s state public policy limitation on the

enforceability of arbitration agreements governed by

the FAA. Little emphasized that California’s public

policy against exculpatory contracts renders certain

state-law claims unwaivable, and that this policy

would be violated unless the parties’ agreed-upon

arbitration procedures matched up with the procedures

that Armendariz said were “necessary to enable an

9

employee to vindicate these unwaivable rights in an

arbitration forum.” Jd. at 1076-77, 63 P.3d at 987.

Little acknowledged that Armendariz’s

vindication of state public policy “specifically

concern|ed] arbitration agreements” and was “unique”

to the “context of arbitration.” Jd. at 1079, 63 P.3d at

989. Little nonetheless maintained that this

vindication defense was not preempted by the FAA.

Id., 63 P.3d at 988-89. Little relied on the FAA saving

clause permitting courts not to “enforce an arbitration

agreement based on ‘generally applicable contract

defenses.” Id., 63 P.3d at 989. According to Little, one

such defense is California’s public policy against

exculpatory contracts that “force a party to forgo

unwaivable public rights.” Jd. at 1079-80, 63 P.3d at

989.

Little also further developed California’s

arbitration-specific unconscionability rules. Little held

that one type of substantively unconscionable

arbitration clause originates with “the party imposing

arbitration [who] mandates a _ post-arbitration

proceeding, either judicial or arbitral, wholly or largely

to its benefit at the expense of the party on which the

arbitration is imposed.” Jd. at 1072, 63 P.3d at 984.

The court then invalidated a contractual term

authorizing either party to appeal to a second

arbitrator from an arbitral award exceeding $50,000,

concluding it would unduly favor defendants over

plaintiffs. Jd. at 1071-74, 63 P.3d at 983-85.

4. Discover Bank. Two years later, in

Discover Bank v. Superior Court, 36 Cal. 4th 148, 160-

73, 113 P.3d 1100, 1108-17 (2005), the California

10

Supreme Court invoked the vindication of state law

principle applied in Armendariz and Little, this time

under the rubric of unconscionability.

Discover Bank addressed whether courts may

invalidate class arbitration waivers pursuant to an

unconscionability defense. Jd. at 152-53, 160-63, 113

P.3d at 1103, 1108-10. The California Supreme Court

held that, since class actions and arbitrations are

“often inextricably linked to the vindication” of

substantive state rights, such waivers are contrary to

California public policy and therefore unconscionable

when class actions are the only effective way to halt

and redress wrongful conduct. Jd. at 160-63, 113 P.3d

at 1108-10. As with the vindication of state public

policy defense against arbitration adopted in

Armendariz and Little, Discover Bank held that the

FAA did not preempt its unconscionability holding

because, while it was tailored to arbitration

agreements, the finding of unconscionability could be

traced to a general state public policy against

exculpatory contracts. See id. at 163-67, 113 P.3d at

1110-13.

5. Gentry. Gentry v. Superior Court, 42 Cal.

4th 443, 456-63, 165 P.3d 556, 563-68 (2007), held that,

where employees assert unwaivable state statutory

wage claims subject to an arbitration agreement that

precludes any attempt to pursue those claims on a

classwide basis, this preclusion of a class procedure is

unenforceable as a matter of California public policy if

the dispute resolution method specified in the

employment contract—i.e., individual arbitration—

could not as effectively vindicate the employee's

substantive rights under the state’s Labor Code.

11

Gentry held that applying this vindication of

state public policy defense to invalidate class

arbitration waivers was not preempted by the FAA

because the FAA permitted courts to limit the

enforcement of arbitration procedures based on state

public policy where those procedures “significantly

undermine the ability of employees to vindicate” their

state statutory rights. Jd. at 465 & n.8, 165 P.3d at

569 & n.8.

6. Sonic I. In Sonic-Calabasas A, Inc. v.

Moreno (Sonic J), 51 Cal. 4th 659, 668-69, 679, 681 n.4,

247 P.3d 130, 133-34, 140-41, 142 n.4 (2011), the

California Supreme Court concluded that an

agreement to resolve disputes through arbitration

impermissibly waived the “advantages” of certain

procedures that California laws made available to

employees who pursue state statutory wage claims in

an administrative proceeding before the state Labor

Commissioner's office. Id. at 671-72, 247 P.3d at 135.

Applying its vindication of state public policy

defense, the California Supreme Court concluded that

substituting arbitration as an alternative to the Labor

Commissioner procedures violated California public

policy and rendered the agreement unconscionable as

written. Jd. at 678-84, 686-87, 247 P.3d at 140-44, 145-

46. Applying’ the reasoning of Discover Bank and

Gentry, the court also held that this result was not

preempted by the FAA. /d. at 687-95, 247 P.3d at 146-

52.

12

Il. IN CONCEPCION AND ITALIAN COLORS,

THIS COURT CLARIFIED THE BROAD

PREEMPTIVE SCOPE OF THE FAA,

CRITICIZED STATE COURT EFFORTS TO

RESIST ARBITRATION, AND REJECTED

THE COST OF VINDICATING STATUTORY

RIGHTS IN ARBITRATION AS A REASON

FOR NOT ENFORCING CLASS

ARBITRATION WAIVERS.

Concepcion explained that, under the FAA,

parties may agree “to arbitrate according to specific

rules” and courts must “enforce [those agreements]

according to their terms.” Concepcion, 131 S. Ct. at

1745, 1748-49 (emphases added). Congress was careful

to temper the FAA’s mandate to respect parties’

freedom of contract by including in the FAA a saving

clause that preserves generally applicable contract

defenses from preemption. Id. at 1748.

But even a defense that a state court

characterizes as generally applicable to all contracts is

preempted by the FAA if the defense “stand[s} as an

obstacle to the accomplishment of the FAA’s

objectives.” Id. at 1747-48. When, as a practical

matter, a nominally arbitration-neutral contract

defense disproportionately invalidates arbitration

agreements, the defense erects a barrier to the FAA’s

objective of allowing parties the freedom to structure

contractual terms for dispute resolution—or not to

contract at all if those terms are unacceptable. See id.

(generally applicable state contract defenses are

preempted by the FAA where they “disfavor |

arbitration” by having a “disproportionate impact” on

arbitration agreements and frustrating the FAA’s

13

“overarching purpose” of “ensur[ing] the enforcement of

arbitration agreements according to their terms”).

Concepcion applied these principles to hold that

the FAA preempted the unconscionability standard

adopted by the California Supreme Court in Discover

Bank. Id. at 1746-53. This Court rejected the

assertion that California’s policy against exculpatory

contracts—California’s state law version of the

vindication exception to the FAA—could override the

FAA’s principal objective of enforcing arbitration

agreements according to their terms. Concepcion

acknowledged that the FAA’s “saving clause permits

agreements to arbitrate to be invalidated by ‘generally

applicable contract defenses.” Jd. at 1746. But

Concepcion determined that where courts hold

arbitration procedures to be “unconscionable or

unenforceable as against public policy” based on their

“general principle of unconscionability or public-policy

disapproval of exculpatory agreements,” such state-law

defenses “[ijn practice .have a disproportionate

impact on arbitration agreements” even though they

“presumably apply” to all contracts. Jd. at 1747

(emphasis added). Concepcion therefore held that such

state-law unconscionability or public policy standards

are preempted by the FAA. Id. at 1747-48.

In short, Concepcion held Discover Bank to be

preempted because Discover Bank’s unconscionability

standard “allowed courts to ignore and refuse to

enforce the clear terms of the parties’ agreement, and

instead employ a judicial policy judgment” that a

procedure to which the parties did not contractually

agree “would better promote the vindication of the

parties’ rights in certain cases.” Truly Nolen of Am. v.

14

Superior Court, 208 Cal. App. 4th 487, 506, 145 Cal.

Rptr. 3d 432, 445 (2012).

Some courts have suggested that Concepcion did

not address whether the FAA prevents courts from

refusing to enforce agreements to arbitrate statutory

claims where the plaintiff could establish the agreed-

upon arbitration procedures were insufficient to

vindicate statutory rights. See, e.g., Sutherland v.

Ernst & Young LLP, 847 F. Supp. 2d 528, 535-36

(S.D.N.Y. 2012), rev'd, 726 F.3d 290 (2d Cir. 2013). But

this Court’s intervening decision in Italian Colors

confirmed that Concepcion addressed precisely that

vindication rationale.

In Italian Colors, the defendants sought to

compel arbitration of the plaintiffs’ federal antitrust

claims on an individual basis pursuant to the

arbitration agreement’s class arbitration waiver.

Italian Colors, 133 S. Ct. at 2307-08. The Second

Circuit held that this waiver was unenforceable under

the vindication exception because’ evidence

“establishe[d], as a matter of law, that the cost of

plaintiffs’ individually arbitrating” their federal

antitrust claims “would be prohibitive.” Jn re Am.

Express Merchs.’ Litig., 667 F.3d 204, 217-19 (2d Cir.

2012). The Second Circuit distinguished Concepcion on

the ground that it dealt with the FAA’s preemption of

state-law defenses to arbitration rather than with a

vindication analysis. Jd. at 212-13.

This Court reversed and held that “the fact that

it is not worth the expense involved in proving a

statutory remedy does not constitute the elimination of

the right to pursue that remedy.” Jtalian Colors, 133 S.

15

Ct. at 2311. The Court thus rejected the notion that

the vindication. principle, if it exists at all, allows a

court to invalidate a class arbitration waiver on the

ground that it would be uneconomical for the plaintiff

to proceed with her claims on an individual, rather

than a class-wide, basis. Jd. at 2310-11.

In rejecting the plaintiff's arguments under the

vindication exception, this Court held that Concepcion

“all but resolves this case” and expressly rejected the

dissenting opinion’s view that Concepcion did not

involve the vindication rationale. Jd. at 2312 & n.5.

Moreover, while Justice Kagan’s dissenting opinion

disagreed with the majority's view that Concepcion

dealt with a vindication analysis, even the dissent

acknowledged that states could not circumvent the

FAA’s mandate based on a concern for the vindication

of state law, explaining that the FAA has “no earthly

interest (quite the contrary) in vindicating that law.

Our effective-vindication rule comes into play only

when the FAA is alleged to conflict with another

federal law.” Id. at 2320 (Kagan, J., dissenting).

Il. SINCE CONCEPCION, STATE COURTS

HAVE CONTINUED TO RESIST THE

PREEMPTIVE EFFECT OF THE FAA.

In the years since this Court decided Conce;. ion,

the California Supreme Court and other state high

courts have continued to resist the FAA’s preemptive

mandate.

16

1. Sonic II. Sonic-Calabasas A, Inc. v.

Moreno (Sonic I}, 57 Cal. 4th 1109, 311 P.3d 184

(2013)2 addressed whether the plaintiff could

“vindicate his right to recover unpaid wages” under

California law and, in particular, “whether any barrier

to vindicating such rights would make the arbitration

agreement unconscionable or otherwise

unenforceable. . and, ifso, whether such a rule would

be preempted by the FAA.” 7d. at 1142, 311 P.3d at

200.

The California Supreme Court noted that, when

an employee elects to pursue his state statutory right

to recover unpaid wages before the Labor

Commissioner rather than in court, state law affords

the employee certain hearing and posthearing

procedures that are designed to “reduc[e] the costs and

risks of pursuing a wage claim in several ways.” Jd. at

1129, 311 P.3d at 191. The court held it appropriate to

consider whether agreed-upon arbitration procedures

fail to include these statutory procedures, and whether

the absence of these procedures fails to “provide an

employee with an accessible and affordable arbitrable

forum for resolving wage disputes.” Jd. at 1146, 311

P.3d at 203.3

2 This Court vacated Sonic I and remanded for

reconsideration in light of Concepcion. See Sonic-Calabasas A,

Inc. v. Moreno, 565 U.S. __, 132 S. Ct. 496 (2011).

3 The Sonic I/ court did not suggest that the arbitration

agreement actually waived the employee’s right to pursue unpaid

wages. Instead, the court emphasized that the unconscionability

inquiry focuses on whether the arbitral scheme, in failing to

(continued...)

17

The court insisted that this unconscionability

standard survived FAA preemption even after

Concepcion and Italian Colors. Citing Armendariz’s

discussion of the vindication of state statutory rights,

the majority maintained that the FAA allows state

courts to refuse to enforce agreements to arbitrate

state statutory claims where arbitration would not

afford procedural benefits that plaintiffs would have

received outside arbitration. Jd. at 1150-52, 311 P.3d

at 206-08 (citing Armendariz, 24 Cal. 4th at 98-99, 6

P.3d at 679-80, and Mitsubishi Motors, 473 U.S. at

626-28). The majority reasoned that those procedures

would help “vindicate” a state statutory right. Sonic II,

57 Cal. 4th at 1155, 311 P.3d at 209.

Justice Chin’s dissenting opinion emphasized

that under Concepcion and its progeny, the FAA

precludes state courts from refusing to enforce

arbitration agreements based on a concern that

arbitration procedures prevent vindication of state

statutory rights. See id. at 1184-92, 311 P.3d at 230-36

(Chin, J., dissenting). Justice Chin also explained that

the majority's decision impermissibly applied a state-

law contract defense to an arbitration agreement based

on the uniqueness of that agreement. Jd. at 1190-91,

311 P.3d at 235. The Sonic I majority insisted that

the FAA authorizes the vindication of state statutory

(...continued)

provide these statutory procedures, “imposes costs and risks on a

wage claimant that make the resolution of the wage dispute

inaccessible and unaffordable” by creating “practical impediments

to the use of arbitration to resolve wage disputes.” Jd. at 1148,

1168, 311 P.3d at 204, 219.

18

rights because courts have the power to create state

law rules “uniquely in the context of arbitration.” Id.

at 1143, 311 P.3d at 201 (majority opinion). However,

“a court may not ‘rely on the uniqueness of an

agreement to arbitrate as a basis for a state-law

holding that enforcement would be unconscionable, for

this would enable the court to effect what the state

legislature cannot.” Concepcion, 131 S. Ct. at 1747.

Such an arbitration-specific rule is preempted by the

FAA because it has “a disproportionate impact on

arbitration agreements.” Jd.

By improperly applying a vindication rationale

with a unique and disproportionate focus on

arbitration, and grounding it on an unconscionability

standard that is peculiar to arbitration, Sonic Is

development of a “unique rule” for arbitration

agreements flouted Concepcion. Sonic II, 57 Cal. 4th

at 1190, 311 P.3d at 235 (Chin, J., dissenting).

The unconscionability standard the California

Supreme Court applies to arbitration agreements turns

on whether the agreements are permeated with a

certain “degree of unfairness.” Jd. at 1160, 311 P.3d at

213 (majority opinion). But California’s assessment of

whether an arbitration agreement is sufficiently fair

embodies little more than a state policy judgment

about the efficacy of arbitration in vindicating a

plaintiff's rights.

The FAA precludes such state policy judgments

concerning the fairness of contractually agreed-upon

arbitration procedures. “[S]treamlined procedures of

arbitration do not entail any consequential restriction

on substantive rights.” McMahon, 482 U.S. at 232.

19

The FAA imposes a binding value judgment about the

merits of enforcing arbitration agreements as written,

which cannot be superseded by state public policy in

the guise of an unconscionability defense. See

Concepcion, 131 S. Ct. at 1753 (“States cannot require

a procedure that is inconsistent with the FAA, even if

it is desirable for unrelated reasons.”). “[T]here is

nothing inherently unfair or oppressive about

arbitration clauses.” Coleman v. Prudential Bache

Sec., Inc., 802 F.2d 1350, 1352 (11th Cir. 1986).

Contrary to the California Supreme Court’s

pronouncement in Sonicll, state courts cannot

evaluate arbitration agreements based on whether the

arbitration process sufficiently resembles the

advantageous litigation procedures from which one

party may benefit under state law outside the arbitral

forum, even if the court believes that this comparative

analysis may be desirable to that party (invariably, the

plaintiff as it turns out) for fairness reasons. See

Concepcion, 131 S. Ct. at 1752-53; see also Reed

Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 734

F.3d 594, 600 (6th Cir. 2013) (holding that arbitration

procedure could not be found unconscionable so as to

defeat FAA preemption, even though it was adhesive

and one-sided, since “all of these things—the one-sided

nature of the arbitration clause, and its adhesive

nature—were also present” in Jtalian Colors yet this

Court found the arbitration agreement there

enforceable, “all of those concerns notwithstanding’).

By definition, such a comparison test depends,

improperly, on the uniqueness of arbitration. See Ex

parte McNaughton, 728 So. 2d 592, 598-99 (Ala. 1998).

“(Tlhe heart of the asserted unfairness is the disparity”

20

between arbitration and litigation outside the arbitral

forum, and the supposed lack of fairness therefore

improperly derives its meaning from the fact that an

arbitration agreement is at issue. THI of N.M. at

Hobbs Ctr., LLC v. Patton, 741 F.3d 1162, 1169 (10th

Cir. 2014). Simply put, “just as the FAA preempts a

state statute that is predicated on the view that

arbitration is an inferior means of vindicating rights, it

also preempts state common law—including the law

regarding unconscionability—that bars an arbitration

agreement because of the same view.” Jd. at 1167.

2. Iskanian. In Iskanian v. CLS

Transportation Los Angeles, LLC, 59 Cal. 4th 348, 362-

66, 327 P.3d 129, 134-37 (2014), the California

Supreme Court revisited its holding in Gentry that

class waivers in mandatory employment arbitration

agreements are unenforceable as against public policy

where such waivers prevent the effective vindication of

employees’ unwaivable rights under state wage and

hour laws. The court overruled Gentry, holding that

“fuJnder the logic of Concepcion, the FAA preempts

Gentry’s rule against employment class waivers.” Id.

at 364, 327 P.3d at 136.

Nevertheless, the California Supreme Court

went out of its way to reaffirm that “an arbitration

process [must be] accessible, affordable, and consistent

with fundamental attributes of arbitration” and that

“the FAA does not prevent states through legislative or

judicial rules from addressing the problems of

affordability and accessibility of arbitration.” Jd. at

366, 327 P.3d at 137.

21

Although he concurred in the result, Justice

Chin again disagreed with the majority's reaffirmance

of the Sonic IJ standard because “an arbitration

agreement may not be invalidated based on a court’s

subjective view that the agreement’s waiver of the

[Labor Commissioner] procedures and protections

would render arbitration less ‘effective for wage

claimants’ than a ‘dispute resolution mechanism’ that

includes those procedures and protections.” /d. at 393,

327 P.3d at 156 (Chin, J., concurring).

3. Other state court cases. since

Concepcion. Other state supreme courts have

continued to resist and evade Concepcion since this

Court decided that case in 2011. Indeed, this Court

has itself twice had to summarily reverse state high

courts that have flatly refused to apply the FAA as

construed in Concepcion.

In Marmet Health Care Center, Inc. v. Brown,

565 U.S. _, 132 S. Ct. 1201 (2012) (per curiam), this

Court summarily reversed a decision of the West

Virginia Supreme Court of Appeals that refused to

enforce an arbitration agreement. The plaintiffs in

Marmet brought negligence and wrongful death actions

against nursing homes in which their relatives had

died, and the state high court refused to enforce

agreements requiring that such claims be arbitrated.

Id. at 1202-03. The state supreme court held that

“Congress did not intend for the FAA to be, in any

way, applicable to personal injury or wrongful death

suits that only collaterally derive from a written

agreement that evidences a transaction affecting

interstate commerce, particularly where the agreement

involves a service that is a practical necessity for

22

members of the public.” Jd. at 1203. In reversing that

decision, this Court reiterated that “West Virginia’s

prohibition against predispute agreements to arbitrate

personal-injury or wrongful-death claims against

nursing homes is a categorical rule prohibiting

arbitration of a particular type of claim, and that rule

is contrary to the terms and coverage of the FAA.” Jd.

at 1203-04.

Shortly after Marmet, this Court summarily

reversed another state high court decision refusing to

compel arbitration, this time from Oklahoma. See

Nitro-Lift Techs., L.L.C. v. Howard, 568 U.S. __, 133 S.

Ct. 500, 501 (2012) (per curiam). In that case, the

Oklahoma Supreme Court refused to enforce an

arbitration clause in a noncompetition agreement

between Nitro-Lift and two former employees, holding

that Oklahoma law embodying a state public policy

against noncompetition agreements trumped the FAA’s

mandate that an arbitrator decide whether the

noncompetition agreements were valid. Id. at 501-02.

In reversing, this Court emphasized that “State courts

rather than federal courts are most frequently called

upon to apply the [FAA] , including the Act’s

national policy favoring arbitration. It is a matter of

great importance, therefore, that state supreme courts

adhere to a correct interpretation of the legislation.”

Id. at 501. The Oklahoma Supreme Court disregarded

the FAA in “assum[ing] the arbitrator’s role by

declaring the noncompetition agreements null and

void”; “the FAA forecloses precisely this type of ‘judicial

hostility towards arbitration.” Id. at 503.

Other state supreme court opinions have

likewise continued resisting Concepcion in less obvious,

23

but no less troubling, ways. One example of this trend

is Schnuerle v. Insight Communications Co., 376

S.W.3d 561, 573 (Ky. 2012), where the Kentucky

Supreme Court applied Concepcion to an arbitration

agreement between a broadband Internet company and

its subscribers that contained a class arbitration

waiver. /d. at 565-66. While the state high court

reluctantly held that Concepcion compelled it to

enforce the class waiver under the FAA, id. at 569, the

court imposed a significant caveat:

Concepcion does not disturb the basic

principle that an arbitration clause is not

enforceable if it fails to provide plaintiffs

with an adequate opportunity to

vindicate their claims. Accordingly,

arbitration clauses certainly may

continue to be struck down as

unconscionable if their terms strip

claimants of a statutory right, which

cannot be vindicated by arbitration,

because, for example, the arbitration

costs on the plaintiff are prohibitively

high.

Id. at 573. Thus, the Kentucky Supreme Court

has preserved the effective vindication rationale as

applied to state law that this Court has long

condemned. See Perry, 482 U.S. at 489-90; Mitsubishi

Motors, 473 U.S. at 628; Southland Corp. v. Keating,

465 U.S. 1, 10-11, 16 & n.11 (1984).

Similarly, in Gandee v. LDL Freedom

Enterprises, Inc., 176 Wash. 2d 598, 603-10, 293 P.3d

1197, 1199-1203 (2013), the Washington Supreme

24

Court narrowly construed Concepcion in invalidating

an arbitration clause in a debt adjustment contract.

Gandee held that the venue, fee-shifting, and statute of

limitations provisions of the arbitration clause were

unconscionable because they thwaried “the [state]

legislature’s intent to encourage consumers to

vindicate their rights.” Jd. at 605, 293 P.3d at 1201. In

analyzing whether this outcome was preempted by the

FAA after Concepcion, the Washington Supreme Court

construed Concepcion as limited to its facts, id. at 609-

10, 293 P.3d at 1202-03, so that “Concepcion provides

no basis for preempting [Washington’s] relevant case

law nor does it require the enforcement of Freedom's

arbitration clause” id. at 610, 293 P.3d at 1203.

In Brewer v. Missouri Title Loans, 364 S.W.3d

486, 490-91, 493-94 (Mo. 2012), the Missouri Supreme

Court also sidestepped Concepcion in striking down as

unconscionable an arbitration clause containing a class

waiver in a car title loan agreement. The Missouri

high court explained that “[b]ecause the purpose of the

[FAA] is to ensure efficient dispute resolution, the

analysis in Concepcion assumes the availability of a

practical, viable means of individualized dispute

resolution through arbitration.” Jd. at 494. Since the

plaintiff had introduced evidence that no lawyer would

take her case to individual arbitration because of the

prohibitive costs involved, the court concluded that she

could not vindicate her state statutory rigliis in

arbitration and that the FAA therefore did not require

enforcement of the arbitration clause. Jd. at 493-94.

This result flouts the decisions in Concepcion and

Italian Colors. See Italian Colors, 133 S. Ct. at 2312

n.5 (“[T]he FAA’s command to enforce arbitration

25

agreements trumps any interest in ensuring the

prosecution of low-value claims.”); Concepcion, 131 S.

Ct. at 1753 (“States cannot require a procedure that is

inconsistent with the FAA, even if it is desirable for

unrelated reasons.”). Indeed, the dissenting opinion

condemned the majority for “engag{[ing] in intellectual

gymnastics to create ‘life after Concepcion.” Brewer,

364 S.W.3d at 504 (Price, J., dissenting).

The Montana Supreme Court refused to enforce

an arbitration clause in a payday loan agreement

based on pre-Concepcion case law requiring arbitration

clauses to clearly and conspicuously explain the

consequences of arbitrating because arbitration

inherently involves the waiver of fundamental rights to

jury trial and access to the courts. Kelker v. Geneva-

Roth Ventures, Inc., 369 Mont. 254, 259, 303 P.3d 777,

781 (2013). While the Montana high court portrayed

its “clear and conspicuous’ test as generally applicable

to all contracts, this state-law contract defense is

preempted by the FAA because it “appliies] only to

arbitration [and] derive{s] [its] meaning from the fact

that an agreement to arbitrate is at issue.”

Concepcion, 131 S. Ct. at 1746.4

4 The Ninth Circuit has disagreed with the Montana

Supreme Court on this point and held that its “reasonable

expectations/fundamental rights rule runs contrary to the FAA as

interpreted by Concepcion because it disproportionally applies to

arbitration agreements, invalidating them at a higher rate than

other contract provisions.” Mortensen v. Bresnan Commce'ns, LLC,

722 F.3d 1151, 1161 (9th Cir. 2013).

26

The New Jersey Supreme Court has followed the

same erroneous course. In Atalese v. U.S. Legal

Services Group, L.P., 219 N.J. 430, 446-48, 99 A.3d

306, 315-16 (2014), petition for cert. filed, _ U.S.L..W.

_. (US. Jan. 21, 2015) (No. 14-882), that court

invalidated an arbitration clause in a contract for debt

adjustment services because it did not provide the

consumer sufficiently clear and unambiguous notice

that she was giving up her right to have her statutory

claims adjudicated in court. The court explained that

“because arbitration involves a waiver of the right to

pursue a case in a judicial forum, ‘courts take

particular care in assuring the knowing assent of both

parties to arbitrate, and a clear mutual understanding

of the ramifications of that assent.” Id. at 442-43, 99

A.3d at 313. As the Third Circuit held in a similar

case, the New Jersey Supreme Court was wrong

because “applying a heightened ‘knowing and

voluntary’ standard to arbitration agreements would

be inconsistent with the FAA.” Morales v. Sun

Constructors, Inc., 541 F.3d 218, 224 (3d Cir. 2008).

While these cases represent only a handful of

the many state court cases that have sought to evade

the FAA’s preemptive mandate after Concencion, they

show that the problem of enforcement of the FAA in

state courts persists—particularly in California—and

requires this Court’s ongoing supervision. As we

explain in the next section, the California Court of

Appeal’s decision in this case is but another example of

this trend.

27

IV. THE CALIFORNIA COURT OF APPEAL’S

DECISION IN THIS CASE IS SIMPLY THE

LATEST ATTEMPT TO EVADE

CONCEPCION AND THE FAA.

The court below continued the trend of state

court evasion of FAA preemption, this time under the

guise of contract interpretation. The result is of a piece

with prior state court cases refusing to apply

arbitration clauses as written and continues “the

judicial hostility towards arbitration that prompted the

FAA [wnich has] manifested itself in ‘a great variety’ of

‘devices and formulas’ declaring arbitration against

public policy.” Concepcion, 131 S. Ct. at 1747.

DIRECTV’s customer agreement contained an

arbitration clause that included a class arbitration

waiver. Pet. App. 4a-5a. That provision concluded

with the following sentence: “If, however, the law of

your fi.e., the customer’s] state would find this

agreement to dispense with class arbitration

procedures unenforceable, then this entire Section 9

fi.e., the entire arbitration clause] is unenforceable.”

Pet. App. 5a. Imburgia sought to bring a class action

against DIRECTV in state court alleging that

DIRECTV violated various state consumer protection

laws by improperly charging early termination fees to

its customers. Pet. App. 3a. After the state trial court

denied DIRECTV’s motion to compel arbitration, the

California Court of Appeal affirmed by applying state

law preempted by the FAA. Pet. App. 3a-4a.

The Court of Appeal reasoned that the

arbitration clause’s reference to “the law of your state”

meant “the law of your state without considering the

28

preemptive effect, if any, of the FAA”—i.e., California

law before Concepcion. Pet. App. 8a. In doing so, the

court relied on contractual interpretation principles

under state law (e.g., the specific controls the general,

contract language should be construed against the

drafter) and rejected contrary holdings of federal

courts. Pet. App. 8a-15a; but see Nitro-Lift, 133 S. Ct.

at 504 (“There is no general-specific exception to the

Supremacy Clause.”). In particular, the court rejected

a Ninth Circuit opinion construing the same provision

in DIRECTV’s arbitration clause in exactly the

opposite way. Pet. App. 12a-15a; see Murphy, 724 F.3d

at 1225-28. The Ninth Circuit held in Murphy that, for

purposes of interpreting the phrase “the law of your

state” in DIRECTV’s arbitration clause, the FAA (as

construed in Concepcion) “is the law of California and

of every other state” and that “[i]t follows that, under

the doctrine of preemption, the Discover Bank rule is

not, and indeed never was, California law.” Murphy,

724 F.3d at 1226. The Ninth Circuit concluded that

“(pjlaintiffs’ contention that the parties intended for

state law to govern the enforceability of DIRECTV’s

arbitration clause, even if the state law in question

contravened federal law, is nonsensical.” Jd. The

Court of Appeal here brushed Murphy aside as

“unpersuasive.” Pet. App. 13a.

The California Court of Appeal fundamentally

erred. It is bedrock constitutional law that “the

incorporation of state law does not signify the

inapplicability of federal law, for ‘a fundamental

principle in our system of complex national polity’

mandates that ‘the Constitution, laws, and treaties of

the United States are as much a part of the law of

29

every State as its own local laws and Constitution.”

de la Cuesta, 458 U.S. at 157 (quoting Hauenstein v.

Lynham, 100 U.S. 483, 490 (1880)); see also Testa v.

Katt, 330 U.S. 386, 390-92 (1947). There is no such

thing as California law shorn of the FAA’s preemptive

effect after Concepcion. Federal law (including

Concepcion’s interpretation of the FAA) is the law of

California and always has been, and the reference to

“the law of your state” in the DIRECTV arbitration

clause incorporates the effect of FAA preemption. No

matter how much California courts may wish to apply

the anti-arbitration policy animating California law

prior to Concepcion to invalidate arbitration clauses

containing class action waivers, they cannot “opt out”

of the Supremacy Clause.

The Court of Appeal’s opinion in this case is but

the latest example of a regrettable trend this Court

noted in Concepcion—that “California’s courts have

been more likely to hold contracts to arbitrate

unconscionable than other contracts.” Concepcion, 131

S. Ct. at 1747. The transparency of the Court of

Appeal’s error is striking, confirming that the judicial

hostility to arbitration that the FAA was enacted to

extinguish is still alive and well in California.

Twice in recent years, this Court has been forced

to summarily reverse state court rulings refusing to

obey the Supremacy Clause and apply the FAA to

invalidate state laws that are preempted by the FAA

after Concepcion. See Nitro-Lift, 133 S. Ct. at 503 (“It

is this Court’s responsibility to say what a statute

means, and once the Court has spoken, it is the duty of

other courts to respect that understanding of the

governing rule of law.”); Marmet, 132 S. Ct. at 1202

30

(“When this Court has fulfilled its duty to interpret

federal law, a state court may not contradict or fail to

implement the rule so established.”). This Court

should again reverse in this case and instruct the lower

court and other state courts to follow the Supremacy

Clause and the policy of the FAA by enforcing

arbitration agreements as written, even when this

leads to a result at odds with state public policy, state

unconscionability doctrine, or other principles of state

law.

+

CONCLUSION

For the foregoing reasons and for the reasons

stated in DIRECTV’s opening brief on the merits, this

Court should reverse the California Court of Appeal’s

decision and remand for further proceedings not

inconsistent with this Court’s opinion.

Respectfully submitted,

HORVITZ & LEVY LLP

DAVID M. AXELRAD

Counsel of Record

FELIX SHAFIR

JOHN F. QUERIO

15760 Ventura Boulevard,

18th Floor

Encino, California 91436-3000

(818) 995-0800

daxelrad@horvitzlevy.com

fshafir@horvitzlevy.com

jquerio@horvitzlevy.com

Counsel for Amicus Curiae

DRI-The Voice of the Defense Bar

June 4, 2015