We previously wrote about the rising trend of mass arbitration and how companies and arbitration providers have responded to it thus far, including by adopting new rules and contract terms specifically geared towards coordinated proceedings.  It may be tempting to impose strict controls on how mass arbitrations can proceed.  But in considering their options, companies and arbitration providers should take note of recent litigation challenging mass arbitration procedures and yielding additional clues about what strategies may or may not survive judicial scrutiny. 

For example, while phased schedules that include bellwether proceedings or batched claims may be a common way to handle mass arbitrations, some restrictions in user agreements, particularly those lacking in mutuality, may increase the risk that a court will find the provision substantively unconscionable.  Provisions that impose relatively low caps on the number of claims that can be filed at once may be vulnerable to unconscionability challenges insofar as they arguably threaten to create excessive delays and prejudice other claimants.  Provisions preserving a company’s right to raise statute-of-limitations defenses may compound this risk, as claimants in later tranches could find their claims time-barred as a result of a phased proceeding. 

In contrast, rules that do not require phased schedules (even if they otherwise encourage or facilitate global resolution), guarantee expeditious resolution of batched claims, provide for alternative dispute resolution between tranches, provide mechanisms for opting out of a phased proceeding, or otherwise ensure that claimants will not find their claims barred through no fault of their own (e.g., via a tolling provision) all may help to alleviate unconscionability concerns with mass arbitration procedures.

One recent court decision highlights this risk.  In MacClelland v. Cellco Partnership, 2022 WL 2390997 (N.D. Cal. July 1, 2022), a California federal court refused to enforce an arbitration agreement that contained several provisions it deemed unconscionable.  These included provisions that required consumers to bring notice of a dispute within a time period shorter than the statute of limitations, provisions that required waiver of punitive damages and claims for public injunctive relief, and mass arbitration provisions that regulated the number of arbitrations that could be pending at any one time.  The court refused to sever the offending provisions from the agreement, finding that taking such an approach would incentivize companies to adopt unenforceable provisions. Companies and arbitration providers should continue to monitor the developing legal landscape surrounding mass arbitration and its associated rules and procedures.  As case law in this area continues to evolve, so too will best practices and strategies for mitigating the risks associated with mass arbitration.

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Photo of Andrew Soukup Andrew Soukup

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a…

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a variety of advertising, consumer protection, privacy, and product defect and safety claims, with exposure ranging from millions to billions of dollars. Based on his “proven record,” Andrew has been recognized as an “attorney you want on your side in a bet-the-company case.”

Andrew’s clients include those in the consumer products, life sciences, financial services, technology, automotive, gaming, and media and communications industries. He has consistently helped his clients prevail in litigation in federal and state courts across the country against putative class representatives, government agencies, state attorneys general, and commercial entities.

With a long history of representing companies subject to extensive federal regulation and oversight, Andrew has a unique ability to help courts understand the complex environment that governs clients’ businesses. Clients turn to Andrew because of his successful outcomes at all stages of litigation, his responsiveness and attention to their matters and his deep understanding of their businesses.

Andrew’s recent successes include:

Leading the successful defense of several of the world’s leading companies and brands in class actions accusing them of engaging in deceptive marketing or selling defective products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
Defeating claims against one of the nation’s leading consumer products companies in industry-wide, multidistrict class-action litigation challenging the company’s marketing and advertising of over-the-counter medicine containing allegedly ineffective ingredients, which earned Andrew recognition by American Lawyer as a “Litigator of the Week.”
Delivered wins in multiple nationwide class actions on behalf of leading financial institutions related to fees, disclosures, and other banking practices, including defending several financial institutions accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recognition as a “Class Action Group of the Year.”
Represented several consumer product and life sciences companies from lawsuits seeking economic damages arising out of the sale of products that allegedly caused personal injuries.
Helping several of the world’s most prominent companies from ESG-related claims accusing them of misrepresenting their practices.

Andrew has also achieved favorable outcomes for clients in commercial and indemnification disputes involving contracts, fraud, and other business tort claims. He helps companies navigate contractual and indemnification disputes with their business partners. Additionally, he provides guidance on arbitration agreements and has helped numerous clients avoid multi-district and class-action litigation by enforcing their arbitration agreements.

As a recognized thought leader on issues impacting class action litigation, Andrew regularly contributes to the firm’s blog, Inside Class Actions, and was recently featured in an interview with Litigation Daily on class-action litigation issues. In recognition of his achievements, he has been recognized by The American Lawyer as a Lawyer of the Week, and the Daily Journal recently included him on their list of Leading Commercial Litigators (2025).

Watch: Andrew shares insights on class action litigation, as part of our Navigating Class Actions video series.

 

Photo of Sonya Winner Sonya Winner

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports.  She has handled numerous antitrust and consumer disputes, many of them class actions, in state and…

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports.  She has handled numerous antitrust and consumer disputes, many of them class actions, in state and federal courts across the country.

Sonya’s cases typically involve difficult technical issues and/or complex legal and regulatory schemes. She is regularly able to resolve cases before the trial phase, often through dispositive motions. But when neither summary judgment nor a favorable settlement is an option, she has the confidence of her clients to take the case all the way through trial and on appeal. Her recent successes have included a cutting-edge decision rejecting a “true lender” challenge to National Bank Act preemption in a class action involving interest rates on student loans, as well as the outright dismissal of a putative antitrust claim against the National Football League and its member clubs asserting an unlawful conspiracy to fix cheerleader compensation. 

Sonya has been recognized as a leading trial lawyer by publications like Chambers and the Daily Journal. She is chair of the firm’s Class Action Litigation Practice Group.

Photo of Kanu Song Kanu Song

Kanu Song is a litigator who represents clients in the technology and life sciences industries in complex, high-stakes matters, including data privacy class actions, trade secret litigation, copyright and trademark disputes, and actions brought under unfair competition and consumer protection laws. She has…

Kanu Song is a litigator who represents clients in the technology and life sciences industries in complex, high-stakes matters, including data privacy class actions, trade secret litigation, copyright and trademark disputes, and actions brought under unfair competition and consumer protection laws. She has substantive experience in all stages of litigation, including arbitrations and appeals, with a strong track record of success on dispositive motions.

Kanu also maintains an active pro bono practice focused on serving women and children, and assisting individuals and small businesses with intellectual property disputes.