The latest developments and trends affecting class actions
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.…
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…
A recent decision by the Third Circuit examined the circumstances under which an arbitrator must decide gateway questions of arbitrability in cases involving challenged loan assignments. In Zirpoli v. Midland Funding, LLC, the plaintiff took a loan pursuant to a contract that contained an arbitration agreement with a delegation clause. The lender then assigned…
When a class action is filed, defendants often wonder whether tendering a payment to a class representative can defeat the claims. In a recent decision, the Third Circuit held that a mid-litigation payment to a class representative plaintiff does not moot her claim if the check is not cashed. Duncan v. Governor of the Virgin Islands, — F.4th —-, 2022 WL 3906213 (3d Cir. Aug. 31, 2022). But tendering the payment, even if the check is uncashed and even if the plaintiff claims the payment does not cover the full value of her claim, did make the plaintiff an atypical class representative and provided a basis to defeat certification of a damages class.…
A court in the Southern District of New York recently compelled arbitration in the putative class action Skillern et al v. Peloton Interactive, Inc. (No. 1:21-cv-06808), concluding that the defendant did not waive its ability to seek arbitration by defaulting in a prior unrelated arbitration proceeding. The judge differentiated between this case and a series of other decisions where a movant had failed to pay arbitration fees in an earlier arbitration proceeding involving the same parties. This case is another helpful precedent strongly favoring arbitration as an alternative dispute resolution process in lieu of class actions.…
We previously wrote about Chamber of Commerce v. Bonta, 13 F.4th 766 (9th Cir. 2021), in which a split panel of the Ninth Circuit held that the Federal Arbitration Act does not preempt a California Labor Code provision prohibiting employers from requiring applicants or employees “to waive any right, forum, or procedure” for…
