Concepcion and Preemption Under the Federal Arbitration Act

The Supreme Court held in AT&T Mobility LLC v. Concepcion that a California law declaring class arbitration waivers unconscionable was preempted because it stood as an 'obstacle to the accomplishment and execution of the full purposes and objectives' of the Federal Arbitration Act. The Court’s Concepcion decision was necessarily based on implied preemption, because the FAA contains no express preemption clause and because there was no textual conflict between the FAA and the California law. Concepcion illustrates two fundamental problems with implied preemption: it violates federalism principles by permitting significant federal encroachment on state laws, and it violates separation-of-powers principles by permitting the Court to re-write federal statutes in accordance with the Court’s inferred (and arguable) interpretation of statutory purpose. This article argues that the Court’s preemption analysis in the FAA is wrong and that the FAA should preempt only textually inconsistent state laws.