Arbitration

Companies who rely on arbitration agreements that select the American Arbitration Association (AAA) consumer arbitration rules for dispute resolution should take note of a recent decision by the Eleventh Circuit affirming the denial of a motion to compel arbitration and emphasizing the importance of proactively complying with the AAA’s rules and policies.
Continue Reading Eleventh Circuit Decision Underscores Importance of Complying with AAA Rules

Companies with arbitration agreements should carefully consider potential arbitration providers’ mass arbitration procedures and fee structures if they could be at risk of becoming the target of a mass arbitration. FedArb, an ADR provider, recently updated its consumer and employment Mass Arbitration Rules to include a robust affirmation requirement, similar to the “reasonable inquiry” standard embodied in Federal Rule of Civil Procedure 11. Specifically, the new rules require claimants’ counsel to (1) submit a spreadsheet identifying each claimant and (2) submit a sworn declaration averring that the information in both the arbitration demand and the spreadsheet is true and correct to the best of counsel’s knowledge after an inquiry reasonable under the circumstances. It also empowers the arbitrator to impose sanctions for violation of the affirmation requirement, including dismissal of the claim or payment of attorney’s fees.Continue Reading FedArb Updates Mass Arbitration Rules to Incorporate Affirmation Requirement

A court in the Northern District of California recently denied Google’s request to prevent more than 69,000 putative class members from opting out of a certified class in favor of pursuing individual arbitration of their claims against Google.  See In re Google Assistant Privacy Litig., 2025 WL 510435, at *1 (N.D. Cal. Feb. 14, 2025)Continue Reading California Federal Court Permits Thousands of Arbitration Opt-Outs from Certified Class

Companies whose agreements with consumers contain an arbitration clause that delegates certain decisions to an arbitrator to resolve should be mindful of a recent Fourth Circuit decision clarifying what disputes may be resolved by a court and what disputes may be resolved by an arbitrator.

In Modern Perfection, LLC v. Bank of America, N.A., — F. 4th –, 2025 WL 77181 (4th Cir. 2025), plaintiffs entered into two contracts with a financial institution:  a deposit agreement that contained an arbitration provision, and a promissory note related to a loan program that did not.  Plaintiffs filed a lawsuit against the financial institution, and the institution sought to enforce its arbitration provision. Continue Reading A Closer Look: Fourth Circuit Upholds Unambiguous Delegation Clause post- Coinbase

Plaintiffs sometimes try to sidestep an arbitration agreement with one company by suing only a second company for interrelated conduct.  Last month, a California federal court applied principles of fairness under the doctrine of “equitable estoppel” to reject this tactic, holding that a software vendor (Twilio) could enforce a plaintiff’s arbitration agreement with a website operator (Keeps) that was not named as a defendant.  Perry-Hudson v. Twilio, Inc., 2024 WL 493333 (N.D. Cal. Dec. 2, 2024).Continue Reading California Federal Court Allows Software Vendor to Enforce Website Operator’s Arbitration Agreement in Privacy Lawsuit

The Court of Appeal for Ontario dismissed Binance’s appeal after a lower court declined to stay a proposed class action and enforce an arbitration agreement contained in Binance’s terms and conditions. The decision carries implications for companies who do retail business or distribute products in multiple jurisdictions, including in Canada.

Background

As a Cayman Islands company, Binance Holdings Limited (“Binance”), together with associated companies, marketed and sold cryptocurrency derivative contracts to Canadian retail investors though the Binance website. In the wake of Binance’s exit from the Ontario market, in June 2022 a proposed class filed an action against Binance in the Superior Court of Justice of Ontario. The proposed class of retail investors argued that Binance distributed securities and investment contracts under Canada’s securities laws, but failed to file or deliver a prospectus required by law.Continue Reading Canadian Appellate Decision Highlights Class Action and Mass Arbitration Risks for Companies in Operating in Multiple Jurisdictions

In a significant decision for businesses who are attempting to revise their consumer arbitration clauses to address the prospect of mass arbitration, the Ninth Circuit affirmed the district court’s denial of Live Nation and Ticketmaster’s motion to compel arbitration, based largely on the content of the mass arbitration provisions of their arbitration agreement.  Heckman v. Live Nation Ent., Inc., – F.4th –, 2024 WL 4586971 (9th Cir. Oct. 28, 2024).  The court concluded that the “dense, convoluted and internally contradictory” arbitration rules cross referenced in Ticketmaster’s arbitration provision, along with other elements of the provision, rendered it unenforceable.  The court also held, on an alternate basis, that the Federal Arbitration Act (FAA) did not even apply to the mass arbitration procedure at issue because it is “not arbitration as envisioned by the FAA.”Continue Reading A Closer Look: Ninth Circuit Holds Arbitration Agreement with Certain Mass Arbitration Protocols Unenforceable

The Third Circuit recently clarified when court-ordered discovery is necessary to determine whether a dispute should be subject to arbitration.  In Young v. Experian Information Solutions Inc., — F.3rd —, 2024 WL 4509767, at *4 (3d Cir. Oct. 17, 2024), plaintiff sued the consumer reporting agency for violations of the Fair Credit Reporting Act after Experian issued an erroneous credit report.  Experian filed a motion to compel arbitration based on a later-signed agreement that plaintiff had with an Experian affiliate.  The district court denied Experian’s motion without prejudice, and granted leave for Experian to re-file a motion to compel arbitration after the parties engaged in limited discovery on the issue of arbitrability.  Experian appealed.Continue Reading A Closer Look:  Third Circuit Clarifies When Court-Ordered Discovery Into Issues of Arbitrability Is Necessary.

A recent Seventh Circuit decision, Wallrich v. Samsung Elecs. Am., Inc., — F.4th —-, 2024 WL 3249646 (7th Cir. July 1, 2024), will be of interest to companies facing mass arbitration demands.Continue Reading Seventh Circuit Reverses Order Compelling Payment of Mass Arbitration Fees

JAMS recently has become the latest arbitral institution to publish rules tailored to the unique issues presented by mass arbitration filings.  Mass arbitration filings have become a popular tactic among plaintiffs’ lawyers and a significant source of potential exposure for companies.

Effective May 1, 2024, parties agreeing to arbitration under the JAMS Rules will be able to opt into the application of the Mass Arbitration Procedures and Guidelines (the “Procedures”) and an accompanying Mass Arbitration Procedures Fee Schedule (“Fee Schedule”) for certain mass filings.  The Procedures and Fee Schedule include features similar to those available under the rules of other arbitral institutions, including the American Arbitration Association (the “AAA”) and National Arbitration and Mediation, including the designation of a Process Administrator to hear and determine preliminary and administrative matters in a more streamlined and cost-efficient manner.  For JAMS to assign a Process Administrator, the parties must pay a flat fee of $7,500, at least $5,000 of which shall be paid by the business in consumer mass arbitrations.

We previously discussed here the AAA’s mass arbitration procedures, which were last updated on April 1.  The Procedures adopted by JAMS differ from the AAA’s current mass arbitration procedures in several notable ways, including those summarized in the table below.Continue Reading JAMS Implements New Procedures for Mass Arbitrations