In this non-employment case, broadband internet subscribers brought a class action against the provider. ?The provider asserted the arbitration provisions in the subscriber agreements.? ?The district court refused to enforce the arbitration agreement based on a Montana public policy invalidating contracts of adhesion that run contrary to the reasonable expectations of the parties. ?The court held that the U.S. Supreme Court?s decision in AT&T Mobility v. Concepcion preempted application of the Montana public policy.?? Even though the Federal Arbitration Act preserves generally applicable contract defenses such as unconscionability, Concepcion holds that even general ?contract ?defenses? such ?as unconscionability are preempted if they stand as an obstacle of ensuring that private arbitration agreements are enforced according to their terms.

The Ninth Circuit interpreted Concepcion ?to ?be ?broader ?than ?a ?restriction ?on ?the ?use ?of unconscionability to end-run FAA preemption?. Any general state-law contract defense, based in unconscionability?? ?or?? ?otherwise,?? ?that?? ?has?? ?a disproportionate effect on arbitration is displaced by the FAA.? ?The court held the FAA preempted application of Montana?s reasonable expectations rule? ?because? ??it? ?disproportionately? ?applies? ?to arbitration ?agreements,?? invalidating ?them ?at?? a higher rate than other contract provisions.? Mortensen v. Bresnan Communications LLC, 777 F.3d? ?1151? ?(9th?? ?Cir.? ?July? ?15,? ?2013)? ?(Gould, Schroeder, Rakoff (S.D.N.Y.))