(CN) – The 9th Circuit on Monday sent a class action against AT&T Mobility back to a California District Court in the wake of a U.S. Supreme Court finding that federal arbitration law trumps the state’s ban on unconscionable contracts.
Vincent and Liza Concepcion brought a class action against AT&T Mobility for allegedly fraudulent taxes on their cellphone contract.
A San Diego federal judge held that AT&T’s arbitration clause blocking class actions was unconscionable and so unenforceable. The 9th Circuit affirmed, but that decision was soon overturned by the high court.
A five-justice majority ruled in April that AT&T could block the class action by enforcing the arbitration clause because the Federal Arbitration Act pre-empts California’s law on unconscionable contracts.