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.