Week in Review: SCOTUS Chides California Court & Adds Drunk Driving Case

Last week, the U.S. Supreme Court issued its opinion in DIRECTV, Inc. v. Imburgia, holding that the California Court of Appeal erred in finding an arbitration clause required the application of state law despite its preemption by the Federal Arbitration Act (FAA). The justices also added four cases to their docket, including a key Fourth Amendment case involving whether, in the absence of a warrant, a state may make it a crime for a person to refuse to take a chemical test to detect the presence of alcohol in the person’s blood.

By a vote of 6-3, the Court continued its trend of upholding arbitration provisions in consumer contracts. The case revolved around a DIRECTV service agreement that included a binding arbitration provision with a class-arbitration waiver. It specified that the entire arbitration provision was unenforceable if the “law of your state” made class-arbitration waivers unenforceable. The agreement also declared that the arbitration clause was governed by the Federal Arbitration Act.

When the agreement was executed, California law made class-arbitration waivers unenforceable. However, the Supreme Court subsequently held in AT&T Mobility LLC v. Concepcion, 563 U. S. 333, that the rule was pre-empted by the FAA. In response to the plaintiffs’ suit, DIRECTV sought to order the matter to arbitration, a request which the trial court granted. The California Court of Appeal affirmed, holding that because California law would render class-arbitration waivers unenforceable, the entire arbitration provision was unenforceable under the agreement. It reasoned that the fact that FAA pre-emption of California law did not change the because the parties were free to refer in the contract to California law as it would have been absent federal pre-emption.

The majority disagreed, holding that “the law of your state” referred only to valid state law that was not preempted by federal law, namely the FAA. As Justice Stephen Breyer explained, “The Federal Arbitration Act is a law of the United States . . . Consequently, the judges of every state must follow it.” Accordingly, the Court held that the arbitration agreement was enforceable.

In addition to issuing one opinion, the justices also agreed to consider the following cases:

Birchfield v. North Dakota: In total, 13 states make it a criminal offense for an individual arrested for impaired driving to refuse to submit to a chemical test of the person’s blood, breath, or urine to detect the presence of alcohol. The Supreme Court will consider three cases that all involve essentially the same issue — whether a person suspected of drunk driving can be criminally penalized for refusing to take a blood alcohol test. 

United States Army Corps of Engineers v. Hawkes Co., Inc.: The justices agreed to address whether the United States Army Corps of Engineers’ determination that the property at issue contains “waters of the United States” protected by the Clean Water Act, constitutes “final agency action for which there is no other adequate remedy in a court,” and is therefore subject to judicial review under the Administrative Procedure Act.

Sheriff v. Gillie: The Court also agreed to consider the legality of certain debt collection practices. The specific questions include: (1) Whether special counsel – lawyers appointed by the Attorney General to undertake his duty to collect debts owed to the state – are state “officers” within the meaning of 15 U.S.C. § 1692a(6)(C); and (2) whether it is materially misleading under 15 U.S.C. § 1692e for special counsel to use Attorney General letterhead to convey that they are collecting debts owed to the State on behalf of the Attorney General.

Ross v. Blake: The Court’s criminal law docket continues to grow. The question in the latest case is whether the Fourth Circuit misapplied this Court’s precedents in holding, in conflict with several other federal courts of appeals, that there is a common law “special circumstances” exception to the Prison Litigation Reform Act that relieves an inmate of his mandatory obligation to exhaust administrative remedies when the inmate erroneously believes that he satisfied exhaustion by participating in an internal investigation.