On January 22, 2008, the 9th Circuit Court of Appeals affirmed a lower court decision that T-Mobile’s arbitration agreement in its Washington State wireless contracts is tainted by substantive unconscionability and is not enforceable.
From the court:
“The issues on appeal are whether the arbitration provisions in Defendant T-Mobile’s service agreements with two of its customers are enforceable under Washington state law and, if not, whether the state law is preempted by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16. After two consumers of T-Mobile’s cellular phone service brought a class action against T-Mobile in state court for breach of contract and violation if the Washington Consumer Protection Act (the “CPA”), Wash. Rev. Code § 19.86.010-19.86.920, T-Mobile removed the case to federal district court and moved to compel arbitration per its service agreements. The district court denied T-Mobile’s motion to compel arbitration, holding that the arbitration agreements were tainted by substantive unconscionability and thus were unenforceable. We conclude that the Washington State Supreme Court’s decision in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), establishes that T-Mobile’s arbitration provision is substantively unconscionable and unenforceable under Washington state law, and that there is no federal preemption in light of our decision in Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976 (9th Cir. 2007). We therefore affirm.”
Full Decision in Louden v. T-Mobile USA
