The San Francisco-based Ninth Circuit Court of Appeals said court...

percent of the nation’s population. The decision came in Shroyer v. New Cingular Wireless Services. The court effectively threw out a provision in the contracts subscribers sign that says they agree to arbitrate all dispute and claims rather than take AT&T to court. “In sum, we hold that Cingular’s class arbitration waiver is unconscionable under California law, and that refusing to enforce such a provision, as California courts would, is not expressly or impliedly preempted by the Federal Arbitration Act,” said the opinion by Judge Stephen Reinhardt. The case was the most recent from California, where state courts have refused to enforce arbitration provisions in consumer contracts. The opinion was strictly procedural and did not touch on the merits of the case against AT&T. “The decision is limited to contracts in California that have the same provisions as the Cingular contract that was before the court,” CTIA General Counsel Mike Altschul told us. “Beginning with a case involving Discover Bank a few years ago, the California courts have been narrowing the scope of arbitration clauses in consumer contracts. At least for now, the effect of this decision is limited to contracts that are governed by California law and it’s also limited to the specific language that Cingular had in its contracts at the time.” Altschul added: “"Carriers and their customers benefit from the streamlined procedures of arbitration. Today’s decision provides a roadmap for carriers who wish to adopt contract provisions that support arbitration as an alternative to costly litigation.”