Kinkel v. Cingular Wireless LLC, 223 Ill. 2d 1

Summary

The Illinois Supreme Court considered whether a class-arbitration limitation in Cingular Wireless's standard service agreement was unconscionable and unenforceable. The court held that a later revision to Cingular's arbitration provision did not apply to the plaintiff's already-terminated agreement and rejected Cingular's federal preemption arguments. The opinion addresses arbitration agreements, class-action waivers, contract modification, unconscionability, and the Federal Arbitration Act.

Holdings

1. Cingular could not unilaterally modify the arbitration provision after Kinkel had terminated the service agreement. The unconscionability analysis therefore had to focus on the original arbitration clause.
2. The FAA did not expressly or impliedly preempt an Illinois-law determination that the class-action waiver was unconscionable, so long as the state-law analysis applied generally applicable contract principles and did not treat arbitration clauses differently merely because they involved arbitration.
3. Under the circumstances of this case, the class-action waiver was unconscionable and unenforceable.
4. Class-action waivers are not per se unconscionable; their enforceability must be determined case by case based on the totality of the circumstances.
5. The unconscionable class-action waiver was severable from the remainder of the arbitration clause, which remained enforceable.

Questions Presented

1. Whether Cingular's 2003 revised arbitration provision could be applied to Kinkel's claim after she had terminated her service agreement.
2. Whether the Federal Arbitration Act expressly or impliedly preempted an Illinois-law determination that the class-action waiver was unconscionable.
3. Whether the class-action waiver in the original arbitration provision was unconscionable under generally applicable Illinois contract law.
4. Whether the unconscionable class-action waiver was severable from the remainder of the arbitration clause.

Disposition

affirmed