AT&T Mobility v. Concepcion

AT&T customers (plaintiffs) brought a class action alleging false advertising and fraud. Their contracts contained an arbitration clause, governed by the Federal Arbitration Act (FAA), that required disputes to be arbitrated individually. AT&T moved to compel arbitration. Under California's Discover Bank rule, class-action waivers in consumer adhesion contracts were deemed unconscionable where a party with superior bargaining power allegedly cheated many consumers out of small individual sums, and the plaintiffs invoked that rule to strike the waiver.

Whether the Federal Arbitration Act preempts California's Discover Bank rule invalidating class-action waivers in consumer arbitration agreements.