In a July 15, 2013 opinion, the US Court of Appeals for the Ninth Circuit held in Mortensen v. Bresnan Communications, LLC that the FAA preempted Montana's public policy against adhesive arbitration agreements that run contrary to a party's reasonable expectations. The court reasoned that the Supreme Court's holding in AT&T Mobility LLC v. Concepcion requires preemption under the FAA of any general state law contract defense that has a disproportionate impact on arbitration.

Plaintiffs brought a class action under various federal and state laws against Bresnan Communications, their internet provider, for an arrangement it had with an advertising agency that gathered information about subscribers to target them with tailored advertising. Bresnan's subscriber agreement included a provision subjecting all claims to arbitration, as well as a choice-of-law provision applying New York law to the agreement. Bresnan filed a motion to compel arbitration under the agreement, which the district court denied. The court applied a Montana public policy that requires arbitration agreements in contracts of adhesion to be within a contracting party's reasonable expectations, and concluded that the agreement was not reasonably expected because it amounted to a waiver of fundamental constitutional rights to a jury trial and access to courts. While the litigation was pending, the Supreme Court issued its decision in AT&T Mobility LLC v. Concepcion, which expanded the scope of the FAA. The district court reconsidered the motion, but still denied it.

The Ninth Circuit reversed. The FAA includes a "savings clause" which ensures that generally applicable contract defenses such as fraud, duress and unconscionability are not preempted by the statute. However, the court reasoned that the Supreme Court's holding in Concepcion requires that any state contract defense that is disproportionately unfavorable to arbitration is preempted by the FAA. Montana's "reasonable expectations/fundamental rights" rule typically invalidates arbitration agreements and is therefore preempted. The court remanded the case to the district court to address the arbitration clause under New York law, as was specified in the subscriber agreement. This ruling expands the Concepcion rule well beyond unconscionability into any state rule that is adverse to arbitration.