Concepcion does not apply in state court?
Last December, I reported on the Supreme Court of Kentucky's decision in Schnuerle v. Insight Communications Co., ___ S.W.3d ___,2010 WL 5129850 (Ky. Dec. 16, 2010), striking down a no-class-action arbitration clause as unconscionable under Kentucky law.
According to the docket (to pull up the case, insert year 2008, case no. 789), the defendants filed a rehearing petition in January 2011. That petition was still pending when the U.S. Supreme Court handed down Concepcion on April 27, 2011. Two days later, on April 29, 2011, the defendants filed a motion for leave to file a notice of supplemental authority.
On May 10, 2011, the plaintiffs, represented by Paul Bland and Leslie Bailey of Public Justice, filed a response to that motion addressing Concepcion.
The first argument the response brief makes (at pp. 2-5) is that Concepcion does not apply to cases pending in state court rather than in federal court. The brief points out that Justice Clarence Thomas has consistently held, in every case in which the issue has come up since 1995, that the FAA does not apply in state-court actions. Accordingly, had the Concepcion case itself been a state-court action rather than a federal case, his vote likely would have aligned him with the dissenters. (See this blog post for more on Justice Thomas's concurrence.)
The brief cites federal appellate-level precedents, including a Ninth Circuit decision, in support of the idea that lower courts should consider how the votes would have been cast if the procedural posture of a case had been different.
The brief also argues that Kentucky law is narrower than the Discover Bank rule found preempted in Concepcion, and that the defendants waived the argument that the FAA applies.
On May 11, 2011, the Kentucky Supreme Court granted the defendants' motion and accepted their supplemental filing. It stands to reason that both the supplemental filing and the response would be considered. It will be interesting to see how this case turns out.