DirecTV gets favorable Supreme Court ruling; California class-actioners can only do private arbitration

Signaling a major legal win for DirecTV (NYSE: T), or any other corporation operating in California, the U.S. Supreme Court ruled that a class-action suit against the pay-TV operator can't move forward because the complaints must be settled in private arbitration. 

In a 6-3 ruling, the high court determined that DirecTV's contract, which forbids class-action suits and calls for disputes to be settled through arbitration, is valid. 

"The ruling affirms the strong federal policy favoring arbitration agreements that efficiently allow consumers and businesses to resolve disputes without further burdening our overloaded courts," DirectTV said in a statement to FierceCable.

The class-action suit was over early-termination fees.

The court agreed to hear the case after a California appeals state court ruled that a clause in the satellite operator's subscriber contract made arbitration unenforceable. Subsequently, the Ninth U.S. Circuit Court of Appeals in San Francisco ruled that DirecTV could move forward with arbitration. 

Justice Stephen G. Breyer disented in a 2011 Supreme Court decision in AT&T v. Concepcion, a case that ruled that state laws protecting class-action suits in arbitration were preempted by federal law.

But regrading Monday's ruling, he wrote, "The fact that Concepcion was a closely divided case, resulting in a decision from which four justices dissented" has no bearing on the obligation of lower courts to follow its holding.

For more:
- read this Washington Post story
- read this Seeking Alpha report
- read this Law 360 story

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