I’ve recently co-authored an article with Lisa Tripp on the U.S. Supreme Court’s decision in AT&T v. Concepcion. It’s currently available for download from SSRN. Here’s the abstract:
The Supreme Court’s 2011 decision in AT&T v. Concepcion is the first case where the Supreme Court explores the interplay between state law unconscionability doctrine and the vast preemptive power of the Federal Arbitration Act (FAA). Although it is considered by many to be a landmark decision which has the potential for greatly expanding the already impressive preemptive power of the FAA, something is amiss with Concepcion.
AT&T v. Concepcion is ostensibly a 5-4 majority decision with a concurring opinion. However, the differences in the majority and concurring opinions are so profound that it appears that Justice Thomas actually concurred in the judgment only, even though he joined the putative majority opinion. This raises serious philosophical questions about jurisprudence, what is necessary to create a rule of law in the American legal system, and the precedential value of Concepcion itself.
Justice Thomas joined the majority opinion and provided the fifth vote, but wrote a concurring opinion that explicitly rejected the legal reasoning of the majority opinion in its entirety. The putative majority opinion authored by Justice Scalia allows that unconscionability can be a valid defense to the enforcement of an agreement to arbitrate, but in Concepcion, allowing California to apply its unconscionability doctrine (the Discover Bank rule) would frustrate the purposes and objectives of Congress in enacting the FAA. For these reasons the Scalia opinion found the law was preempted.
Justice Thomas, in contrast, does not believe that unconscionability can ever be a basis to invalidate an agreement to arbitrate and he reaffirmed his emphatic position articulated in Wyeth v. Levine that “[t]his Court’s entire body of purposes and objectives preemption jurisprudence is inherently flawed. The cases improperly rely on legislative history, broad atextual notions of congressional purpose, and even congressional inaction in order to pre-empt state law.”
Justice Thomas’s conclusion that the law was preempted turned on the text of the statute which he interprets as not allowing unconscionability-based defenses to preemption. Justice Thomas has reaffirmed his rejection of purposes and objectives preemption in cases decided after Concepcion. This means, looking at the substance of the opinions, that there are but four votes for the deciding rationale articulated in the Scalia opinion and there is not a single common denominator that the Scalia and Thomas opinions share, except that they agree on the result.
The Concepcion Court is, in substance, equally divided. Four members found that California’s unconscionability doctrine frustrated the purposes and objectives of the FAA, four in the dissent thought the law did not frustrate the purposes and objectives of the FAA, and one found that the purposes and objectives of Congress were immaterial to the resolution of the case.
How should lower courts react to an equally divided court in this situation? Does a Justice’s decision to join an opinion create a governing rule of law under these unusual circumstances? Can governing rules of law be created in the absence of a majority for the deciding rationale? Is a Justice’s labeling of an opinion as a regular concurrence dispositive or does its substance dictate the precedential value it is given?
The authors’ argue that the Supreme Court provided the answer to these questions over 100 years ago in Hertz v. Woodman:
Under the precedents of this court, and, as seems justified by reason as well as by authority, an affirmance by an equally divided court is, as between the parties, a conclusive determination and adjudication of the matter adjudged; but the principles of law involved not having been agreed upon by a majority of the court sitting prevents the case from becoming an authority for the determination of other cases, either in this or in inferior courts.
Under any rational reading of the opinions, there can be no doubt that “the principles of law involved [have not] been agreed upon by a majority of the court sitting” and this should “prevent the case from becoming authority for the determination of other cases, either in [the Supreme Court] or in inferior courts.” Although Hertz dealt with a situation where the votes were literally split, its point that it takes a majority to create a governing rule is inescapable.
In looking at the substance of the Scalia and Thomas opinions, there simply are not five votes for any aspect of the controlling rationale articulated by Justice Scalia in his putative majority opinion. Because of this, Concepcion should viewed as having created no rule of law outside its specific facts and should, like two other Supreme Court cases that are similar to it, Branzburg v. Hayes and United States v. Verdugo-Urquidez, be treated as not having a majority opinion for precedential purposes.