Wisconsin Auto Title Loans v. Jones: Another Round in the Fight Over Concepcion and Federal Arbitration Act Preemption

06 February 2013 Wisconsin Appellate Law Blog

Last year, around this time in fact, we wrote about the Federal Arbitration Act and the effect of AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), on an argument under Wisconsin law about the unconscionability of an arbitration clause that waived a right to classwide proceedings. That case was Cottonwood Financial, Ltd. v. Estes, 2012 WI App 12, and, after an order from Wisconsin’s Supreme Court summarily disposing of the petition for review in the wake of Concepcion, the court of appeals held that the FAA preempted the unconscionability argument, ensuring that those arbitration clauses would be enforceable. Now Wisconsin’s Supreme Court has another opportunity to address Concepcion and FAA preemption in a recent certification from Wisconsin’s court of appeals.The case is Wisconsin Auto Title Loans, Inc. v. Jones, 2011 AP 2482, and it concerns the unconscionability of an arbitration clause in a series of loan contracts. The trial court in Milwaukee County (Judge Pocan) held that the contracts were unconscionable, despite Concepcion. Wisconsin Auto, for its part, asserts that the trial court relied on grounds for unconscionability rejected by Concepcion and Cottonwood — namely, that the arbitration clauses contained class-action waivers and made the award of attorneys’ fees optional.

This fight appears to be far from over. In a decision filed yesterday, the court of appeals asked the Supreme Court in Madison to answer two questions: first, whether an order denying a motion to compel arbitration is an immediately appealable final order under Wis. Stat. § 808.03(1); and, second (if the answer to number one is “yes,” that it is a final order), whether Concepcion held that the FAA preempts the arguments that the loan contracts in this case were unconscionable. The first question is of particular interest to appellate practitioners in light of the court of appeals’ persistent refusal — earlier in this case and in several others over the last year — to grant leave to appeal such orders by permission under Wis. Stat. § 808.03(2).

In any event, both are interesting questions, and any answer from the court is worth watching for.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services

Insights