Supreme Court Enforces Mandatory Arbitration Provision in California

The Consumer Financial Protection Bureau (CFPB) and many consumer advocates may not be big fans of arbitration provisions in consumer contracts, but yesterday the United States Supreme Court issued an opinion in favor of DirecTV Inc., backing the satellite television provider’s efforts to enforce arbitration agreements signed by its customers in California.

In a 6-3 vote, the Supreme Court overturned a state appeals court decision in California that had previously found consumers were not bound by a provision in DirecTV’s customer agreement preventing disputes from being resolved on a class-wide basis.

The case, Directv, Inc. v. Imburgia, 2015 U.S. LEXIS 7999, has been ongoing for seven years. In 2008, the two respondents brought this lawsuit against DirecTV in a California state court. They sought damages for early termination fees that they believe violated California law.

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