Feeney v. Dell Inc., SJC–11133a.

• Court: United States State Supreme Judicial Court of Massachusetts
• Citation: 993 N.E.2d 329,466 Mass. 1001
• Docket Number: SJC–11133a.
• Parties: John A. FEENEY & another v. DELL INC. & others.
• Decision Date: 01 August 2013

466 Mass. 1001
993 N.E.2d 329

John A. FEENEY & another ¹
v.
DELL INC.² & others.³

SJC–11133a.

Supreme Judicial Court of Massachusetts.

Aug. 1, 2013.

John A. Shope, Boston, for the defendants.

Edward D. Rapacki, Boston, for the plaintiffs.

RESCRIPT.

[466 Mass. 1001]Following the United States Supreme Court's decision in AT&T Mobility LLC v. Concepcion, ––– U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011)( Concepcion ), we held in Feeney v. Dell Inc., 465 Mass. 470, 472, 989 N.E.2d 439 (2013)( Feeney II ), that the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq. (2006), does not foreclose a court “from invalidating an arbitration agreement that includes a class action waiver where a plaintiff can demonstrate that he or she effectively cannot pursue a claim against [a] defendant in individual arbitration according to the terms of the agreement, thus rendering his or her claim nonremediable.” Having concluded that the plaintiffs in Feeney II had indeed made such a demonstration, we affirmed the ruling of a judge in the Superior Court invalidating a class action waiver in the parties' arbitration agreement. Feeney II, supra. Just eight days after the release of our decision in Feeney II, the Supreme Court issued an opinion in American Express Co. v. Italian Colors Restaurant, ––– U.S. ––––, 133 S.Ct. 2304, 2312, 186 L.Ed.2d 417 (2013) (Amex ), holding that a class action waiver in an arbitration agreement is enforceable under the FAA even if a plaintiff proves that the class waiver, combined with other onerous terms of the agreement, effectively precludes the plaintiff from vindicating his or her Federal

[993 N.E.2d 330]

statutory rights. Following the release of Amex, the defendants in Feeney II filed a petition for rehearing on the grounds that Amex abrogated Feeney II. We stayed the issuance of the rescript in Feeney II and invited the plaintiffs to submit a response, which they did. We conclude that following Amex, our analysis in Feeney II no longer comports with the Supreme Court's interpretation of the FAA.

In Feeney II, supra, we were asked to interpret and apply Concepcion, which held that the FAA preempted a California rule that “classif[ied] most collective-arbitration waivers in consumer contracts as unconscionable” because it stood “as an obstacle to the accomplishment and execution of the full purposes and objectives of [the FAA]” to ensure the enforcement of agreements to arbitrate according to their terms. Id. at 1746, 1753. Our holding in Feeney II derived, at least in part, from our belief that Concepcion, while severely constraining the grounds on which a court could invalidate a class waiver in an arbitration agreement as unconscionable or against public policy, [466 Mass. 1002]permitted the invalidation of a class waiver where that waiver “operate[s] in practice to deny a willing plaintiff any and all practical means of pursuing a claim against a defendant.” Feeney II, supra at 491, 989 N.E.2d 439. After all, we observed, Concepcion went “to great length to demonstrate the overall fairness of [the parties' arbitration agreement] and the Court's belief that a consumer could successfully pursue a remedy under the regime it established.” Feeney II, supra at 495, 989 N.E.2d 439, citing Concepcion, supra at 1753.

In Amex, the Supreme Court explicitly rejected our reading of Concepcion. As we observed in Feeney II (based on an earlier decision of the United States Court of Appeals for the Second Circuit in the Amex case), apart from the fact the plaintiffs in Amex asserted Federal statutory rights, the one critical difference between Amex and Concepcion was that the plaintiffs in Amex had actually demonstrated that “the cost of ... individually arbitrating their dispute with Amex would be prohibitive, effectively depriving [them] of the statutory protections of the antitrust laws.” Feeney II, supra at 500, 989 N.E.2d 439, quoting In re Am. Express Merchants' Litig., 634 F.3d 187, 197–198 (2d Cir.2011), aff'd en banc, 667 F.3d 204 (2d Cir.2012), rev'd sub nom. Amex, supra. Yet when Amex reached the Supreme Court, the Court remarked: “Truth to tell, our decision in [Concepcion ] all but resolves this case.... We specifically rejected the argument that class arbitration was necessary to prosecute claims ‘that might otherwise...