Aug. 7, 2015 – University of Houston Law Center Professor Peter Linzer has filed a brief as a friend of the U.S. Supreme Court, urging it to take the unusual action of reconsidering its previous decision to review a consumer arbitration case and dismissing its writ of certiorari "as improvidently granted."
The case, DirecTV v. Imburgia, involves the Federal Arbitration Act and a California state court decision construing a form contract barring class actions in an arbitration set up by the contract. Class actions make it possible for consumers to police improper charges that are too small to make individual litigation economically feasible, and the plaintiffs in this case had sued on behalf of all DirecTV customers over what they characterized as improper termination fees.
Consumer advocates have criticized the increased use of arbitration agreements in form contracts to block consumer class actions, while supporters of these arbitrations have argued that the FAA preempts state unconscionability laws in these cases.
The California Court of Appeal had interpreted the form contract in favor of the class plaintiffs, and the U.S. Supreme Court granted a writ of certiorari to review the California decision. A number of amicus curiae briefs have been filed on both sides of the substantive questions involved, but Linzer has urged the court not to decide the issue, using the procedure of dismissing the writ "as improvidently granted."
Certiorari is the mechanism used by the court when it has the discretion to hear or ignore a claim that a lower court has erred, as in this case. The court always retains the power to change its mind and dismiss a writ without reaching the merits, as Linzer proposes in his friend of the court brief. His interest in the case lies in years of scholarly writing and research in the areas of contracts, denials of certiorari, and arbitration, specifically court rulings about the FAA.
Based on the court's case law on the FAA in recent years, DirecTV has argued that the court should reverse the California Court of Appeal, although that would be a further extension of federal power over state contract law.
In his amicus brief, Linzer argues the court should stay its hand by dismissing the writ because Congress, in the Dodd-Frank Act in 2010, bucked the question of the enforceability of consumer arbitration contracts to the new Consumer Financial Protection Bureau and gave it the power to study the FAA and to "prohibit or impose conditions or limitations on" consumer arbitrations. (The CFPB is largely the creation of Sen. Elizabeth Warren, D-Mass., a former contracts professor and associate dean at the UH Law Center.)
In March, the CFPB issued a more than 700-page study and report to Congress, and Linzer noted in his brief that one of the bureau’s major findings was that consumer compulsory arbitration clauses are primarily used by businesses, not as an alternative to judicial litigation, but simply as a barrier to class actions.
In his amicus brief Linzer argues that the court can avoid both an intrusion on federalism and a potential collision with the CFPB, as Congress' delegate, simply by dismissing the writ and letting the decision below stand. It is not common for the court to dismiss writs of certiorari, but the procedure is well-known and is used by the court when it changes its view on hearing a case. Linzer suggests that this is that sort of case.