The Supreme Court recently issued a decision in AT&T Mobility LLC v. Concepcion.  The majority upheld the use of a class action waiver in an arbitration provision in cell phone contracts.  The Court held that the Federal Arbitration Act preempted California state law on unconscionability.  The Ninth Circuit had held that under California law the arbitration provision was unconscionable because it prohibited class arbitrations.  The Supreme Court reversed, concluding that “[r]equiring the availability of classwide arbitrations interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.”  (Opinion, at 9.)

Notably, AT&T’s arbitration clause had various procedures favorable to claimants – AT&T would pay all the costs for non-frivolous claims, the arbitration would be held where the claimant resides or by telephone, and if the claimant receives an award higher that AT&T’s last settlement offer, they get a minimum of $7,500 plus twice their attorneys’ fees.

Justice Scalia’s opinion has a lengthy discussion about how class arbitrations are unworkable because: (a) they require lengthy proceedings and procedural formality that detracts from the advantage of arbitration; and (b) the stakes are too high to resolve class-wide disputes without meaningful appellate review.  Justice Scalia writes:

We find it hard to believe that defendants would bet the company with no effective means of review, and even harder to believe that Congress would have intended to allow state courts to force such a decision.  (Opinion, at 16-17.) 

An article in the New York Times said this decision:

appeared to provide businesses with a way to avoid class-action lawsuits in court. All they need do, the decision suggested, is use standard-form contracts that require two things: that disputes be raised only through the informal mechanism of arbitration and that claims be brought one by one.

I think that goes a little too far. The Court clearly said that an arbitration provision cannot be invalidated simply because it does not provide for a class arbitration.  But that does not mean that companies can write arbitration clauses any way they please.  Not every arbitration clause is as favorable to claimants as AT&T’s clause in this case, and courts will always need to address every provision on its own with respect to its enforceability against individual claimants.

Here is where I see the impact of this decision on insurance class actions: 

  • When a class action is filed, insurance companies sometimes demand an arbitration (under an auto policy) or appraisal (under property coverage) on the named plaintiffs’ claims, asserting that the dispute must be resolved by those mechanisms rather than in a lawsuit.  Courts, including an Eleventh Circuit opinion, have held that plaintiffs seeking to bring a class action must submit their claims to arbitration or appraisal.  This Supreme Court decision further supports that result.  Insurance class actions will not disappear, however, because not every dispute raised in a proposed class action falls within the scope of an arbitration or appraisal clause.


  • I wonder if any insurer will try to include an express class action waiver in an arbitration provision.  I have never seen a policy with such a provision.  Unlike consumer contracts used by most other large companies, provisions used in homeowners and auto policies generally require insurance department approval.  Will insurance departments approve such class action waivers?  Would the Federal Arbitration Act preempt a regulatory refusal to approve such a provision, or would the McCarran-Ferguson Act override that?


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Photo of Wystan Ackerman Wystan Ackerman

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you…

I am a partner at the law firm of Robinson+Cole in Hartford, Connecticut, USA.  My contact information is on the contact page of my blog.  I really enjoy receiving questions, comments, suggestions and even criticism from readers.  So please e-mail me if you have something to say.  For those looking for my detailed law firm bio, click here.  If you want a more light-hearted and hopefully more interesting summary, read on:

People often ask about my unusual first name, Wystan.  It’s pronounced WISS-ten.  It’s not Winston.  There is no “n” in the middle.  It comes from my father’s favorite poet, W.H. (Wystan Hugh) Auden.  I’ve grown to like the fact that because my name is unusual people tend to remember it better, even if they don’t pronounce it right (and there is no need for anyone to use my last name because I’m always the only Wystan).

I grew up in Deep River, Connecticut, a small town on the west side of the Connecticut River in the south central part of the state.  I’ve always had strong interests in history, politics and baseball.  My heroes growing up were Abraham Lincoln and Wade Boggs (at that time the third baseman for the Boston Red Sox).  I think it was my early fascination with Lincoln that drove me to practice law.  I went to high school at The Williams School in New London, Connecticut, where I edited the school newspaper, played baseball, and was primarily responsible for the installation of a flag pole near the school entrance (it seemed like every other school had one but until my class raised the money and bought one at my urging, Williams had no flag pole).  As a high school senior, my interest in history and politics led me to score high enough on a test of those subjects to be chosen as one of Connecticut’s two delegates to the U.S. Senate Youth Program, which further solidified my interest in law and government.  One of my mentors at Williams was of the view that there were far too many lawyers and I should find something more useful to do, but if I really had to be a lawyer there was always room for one more.  I eventually decided to be that “one more.”  I went on to Bowdoin College, where I wrote for the Bowdoin Orient and majored in government, but took a lot of math classes because I found college math interesting and challenging.  I then went to Columbia Law School, where I was lucky enough to be selected as one of the minions who spent their time fastidiously cite-checking and Blue booking hundred-plus-page articles in the Columbia Law Review.  I also interned in the chambers of then-Judge Sonia Sotomayor when she was a relatively new judge on the Second Circuit, my only connection to someone who now has one-ninth of the last word on what constitutes the law of our land.  I graduated from Columbia in 2001, then worked at Skadden Arps in Boston before returning to Connecticut and joining Robinson+Cole, one of the largest Connecticut-based law firms.  At the end of 2008, I was elected a partner at Robinson+Cole.

I’ve worked on class actions since the start of my career at Skadden.  Being in the insurance capital of Hartford, we have a national insurance litigation practice and I was fortunate to have the opportunity to work on some prominent class actions arising from the 2004 hurricanes in Florida and later Hurricane Katrina, including cases involving the applicability of the flood exclusion, statutes known as valued policy laws, and various other issues.  My interest and experience in class actions gradually led me to focus on that area.

In Connecticut courts I’ve defended various kinds of class actions that go beyond insurance, including cases involving products liability, securities, financial services and consumer contracts.

My insurance class action practice usually takes me outside of Connecticut.  I’ve had the pleasure of working on cases in various federal and state courts and collaborating with great lawyers across the country.  While class actions are an increasingly large part of my practice, I don’t do exclusively class action work.  The rest of my practice involves litigating insurance coverage cases, often at the appellate level.  That also frequently takes me outside of Connecticut.  A highlight of my career thus far was working on Standard Fire Ins. Co. v. Knowles, the U.S. Supreme Court’s first Class Action Fairness Act case.  I was Counsel of Record for Standard Fire on the cert petition, and had the pleasure of working with Ted Boutrous on the merits briefing and oral argument.

I started this blog because writing is one of my favorite things to do and I enjoy following developments in class action law, writing about them and engaging in discussion with others who have an in interest in this area.  It’s a welcome break from day-to-day practice, keeps me current, broadens my network and results in some new business.

When I’m not at my desk or flying around the country trying to save insurance companies from the plaintiffs’ bar, or attending a conference on class actions or insurance litigation (for more on those, see the Seminars/Programs page of this blog), I often can be found playing or reading with my young daughter, helping my wife with her real estate and mortgage businesses, reading a book about history or politics, or watching the Boston Red Sox (I managed to find bleacher seats for Game 2 of the 2004 World Series when Curt Schilling pitched with the bloody sock).  When the weather is good I also love to take the ferry to Block Island, Rhode Island and ride a bike or walk the trails there. If you go, I highly recommend the Clay Head Trail.