Arbitration

The American Arbitration Association (“AAA”) recently published a set of modified Mass Arbitration Supplementary Rules and a new Consumer Mass Arbitration and Mediation Fee Schedule, both effective January 15, 2024.  The modified rules and fee schedule aim to address the increasingly prevalent tactic of plaintiffs’ firms launching mass arbitration campaigns against defendants with arbitration agreements in their consumer contracts.

The AAA defines a mass arbitration as 25 or more similar demands for arbitrations filed against or on behalf of the same party or related parties where representation of all parties is consistent or coordinated across arbitrations.  The modified rules implement the following key changes:Continue Reading AAA Introduces Rule Changes Tailored for Mass Arbitrations

The ever increasing threats of mass arbitration have led many companies to re-examine the terms of their contracts with consumers and to include provisions intended to guard against such threats.  One of the options some companies may find themselves considering is doing away with the arbitration clause but keeping the class action waiver.Continue Reading NJ Supreme Court to Rule on Whether Class Action Waiver is Enforceable Absent an Arbitration Clause

Companies implementing arbitration provisions should ensure that they adequately inform customers about the provision and their options for opting out.  The Second Circuit recently reaffirmed the importance of this exercise in Lipsett v. Popular Bank, 2024WL 111247 (2nd Cir. Jan. 10, 2024), finding a bank’s arbitration provision unenforceable over a decade after it was first implemented.Continue Reading Second Circuit Identifies Pitfalls to Avoid When Implementing Arbitration Provisions

On November 3, the Second Circuit reversed a lower court decision denying a motion to compel arbitration in a putative class action against Klarna.  See Edmundson v. Klarna, Inc., 85 F.4th 695 (2d Cir. 2023).  The decision offers guidance (and support) for companies looking to enforce similar “click-wrap” agreements with mandatory arbitration provisions.Continue Reading A Closer Look: Second Circuit Steps In to Reverse Decision Refusing To Enforce “Click-Wrap” Mandatory Arbitration Agreement

Recently, a court in the Northern District of California compelled arbitration in a putative privacy class action, concluding that the arbitration provision included in a photo-editing app’s terms of use was not unconscionable.  See Flora, et al., v. Prisma Labs, Inc., 2023 WL 5061955 (N.D. Cal. Aug. 8, 2023).Continue Reading California Federal Court Finds That Plaintiffs Must Arbitrate Their BIPA Claims

The Supreme Court, in a 5–4 ruling, has resolved a circuit split on the issue of litigation stays pending appeal of denials of motions to compel arbitration.  In the underlying putative class action, Bielski et al v. Coinbase, Inc., 3:21-cv-07478 (N.D. Cal.), Coinbase moved to compel arbitration of the plaintiffs’ claims, but the motion was denied by the district court.  The Ninth Circuit—in a split from several other Circuits—declined to stay the district court proceedings while the appeal was pending.  The Supreme Court now has ruled that a district court must stay proceedings while an interlocutory appeal on the question of arbitrability is ongoing.  The decision means that defendants should be able to minimize ongoing litigation costs while an appeal of an adverse arbitration decision is pending.Continue Reading Supreme Court Resolves Circuit Split to Require Stays Pending Appeal of Refusals to Compel Arbitration

In two putative class actions pending in the Eastern District of North Carolina, the Department of Justice has filed statements of interest urging the Court to deny defendants’ motions to compel arbitration of plaintiffs’ claims for violations of the Servicemembers Civil Relief Act.

In Padao v. American Express National Bank, No. 5:22-cv-00145-BO-RN (E.D.N.C.)

The Ninth Circuit recently held in Chamber of Commerce v. Bonta that the Federal Arbitration Act preempts a California law that criminalizes employer conduct that requires employees to consent to arbitrate claims arising under the California Fair Employment and Housing Act.  This ruling came after the same panel previously held that the law, Assembly Bill 51, was not preempted because it focused on “pre-agreement” behavior and not the arbitration agreement itself.  In 2021, the panel sua sponte decided to rehear the case, apparently after Judge Fletcher (who was in the majority in both decisions) changed his mind on the law’s validity.  In doing so, the panel eliminated a circuit split it had previously created between itself and the First and Fourth Circuits.Continue Reading Ninth Circuit Reverses Course on Arbitration

The Supreme Court recently granted certiorari in a case to resolve a circuit split that has serious implications for companies who are unsuccessful in their efforts to enforce arbitration provisions in federal district courts. 

In Coinbase, Inc. v. Bielski, No. 22-105, the defendant moved to compel arbitration in two putative class actions.  The motions to compel were denied, and the defendant sought stays while it appealed the denials—which the Federal Arbitration Act gives defendants an automatic right to do.  See 9 U.S.C. § 16.  Both motions to stay were denied, and the Ninth Circuit affirmed both decisions.Continue Reading SCOTUS Set to Resolve Circuit Split over Stays Pending Arbitration Appeal

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