02-2667 Boomer v. AT&T Corp.

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“[I]n passing the Communications Act Congress sought to ensure that consumers would receive uniform rates and that consumers would not be discriminated against based on their locality. Allowing state law challenges to the validity of the terms and conditions contained in longdistance contracts, however, results in the very discrimination Congress sought to prevent.

Moreover, the arbitration clause serves to lower customers’ rates, and thus an indirect result will be price discrimination, either directly or indirectly (i.e. because customers paying the same price receive different contractual rights). Finally, Section 201(b) clearly demonstrates Congress’s intent that federal law determine the fairness and reasonableness of contractual terms, as opposed to state law principles such as unconscionability. For all of these reasons, we conclude that Boomer’s state law challenges to the validity of the arbitration clause are impliedly preempted by the Communications Act.”

Reversed.

Appeal from the United States District Court for the Northern District of Illinois, Darrah, J., Manion, J.