This week, the Consumer Financial Protection Bureau (CFPB or Bureau) published a proposed rule which would prohibit application of pre-dispute arbitration agreements to class litigation involving a broad range of consumer financial products and services. Publication of the proposed rule was expected, as the Bureau announced in October its intention to do so based on its study findings that pre-dispute arbitration agreements "effectively prohibit" class litigation and ... Keep Reading »
Arbitration Class Action Articles
The latest class action developments and trends in arbitration, including news, key cases, and strategies.
2016 Carlton Fields Class Action Survey Reveals Important Trends in Class Action Management
The fifth annual edition of the Carlton Fields Class Action Survey has just been released, and in this year’s survey corporate counsel report that class action spending has increased after four consecutive years of decline. Spending is also projected to increase in 2016. This marks a key turning point. The Numbers Across industries, the companies surveyed report that they spent $2.1 billion on class action lawsuits in 2015. The number of companies facing at least one ... Keep Reading »
Supreme Court Confirms Enforceability of Class Action Waivers
For the second time in four years, the U.S. Supreme Court has overruled a California decision that refused to enforce an arbitration agreement with a class action waiver, holding that the Federal Arbitration Act (FAA) trumps California’s attempts to restrict arbitration and class action waivers in consumer and employment lawsuits. In DirecTV, Inc. v. Imburgia, Case No. 14-462, the Supreme Court, in a 6-3 decision authored by Justice Stephen Breyer, upheld an ... Keep Reading »
Arbitration Awards Prove an Obstacle to Class Claims
Two recent decisions illustrate the impact arbitration provisions can have on the availability of classwide relief. In Kaspers v. Comcast Corp., plaintiff, a Comcast customer, refused to pay for certain billed services and had his debt referred to a collection agency. Plaintiff submitted the dispute to the American Arbitration Association (AAA) pursuant to a contractual arbitration provision. When the AAA refused to arbitrate due to an alleged defect in the ... Keep Reading »
Representative Action Under California’s Private Attorneys General Act Not Waived Through Employment Agreement’s Arbitration Provision
The Central District of California held that a waiver of representative actions in an employment agreement’s arbitration provision did not preclude a former employee from pursuing in court a claim under California’s Private Attorneys General Act of 2004 (PAGA). The court further held that the PAGA claim could only be brought in court and not in arbitration. The plaintiff asserted, on behalf of a putative class, several claims against his former employer for the alleged ... Keep Reading »
Party Waived Right to Compel Arbitration by Waiting to Raise the Defense Until After Class Certification and Shortly Before Trial
After two years of litigation and extensive pretrial discovery, the Tenth Circuit held that cable company Cox Enterprises had waived its right to compel arbitration in an antitrust class action. The opinion is a cautionary tale for defendants not to delay in invoking their arbitration rights, warning against efforts by parties to "game the federal courts and abuse the judicial process" by waiting to raise the arbitration defense until after class certification and ... Keep Reading »
Circuit Courts Address Impact of Arbitration Agreements on Labor Class and Collective Actions
In Conners v. Gusano's Chicago Style Pizzeria, plaintiffs, former employees of defendant, brought a collective action alleging violations of the Fair Labor Standards Act. Defendant responded by implementing a binding arbitration policy on current employees that specifically prevented current employees from joining plaintiffs in the collective action. The district court enjoined defendant from enforcing the arbitration agreement as to any current employees who chose to ... Keep Reading »
GCs facing more bet-the-company and higher exposure class actions
Across industries, companies spent $2 billion on class action lawsuits in 2014, slightly less than the $2.1 billion they spent in 2013. This year, spending is expected to return to 2013 levels. Companies’ class action dockets increased on average by one new case in 2014, bringing the average number of class actions managed to five. This total is expected to remain constant in 2015, as the number of new matters is likely to be offset by those resolved. As before, ... Keep Reading »
Question Certified To Second Circuit: Does The Court Or The Arbitrator Decide Whether An Arbitration Agreement Permits Class Arbitration?
In the Second Circuit, as in other jurisdictions, only exceptional circumstances will justify a departure from the basic policy of postponing appellate review until after the entry of a final judgment. A New York federal district court recently encountered such circumstances in connection with a motion to certify an interlocutory appeal of an order compelling arbitration. Plaintiffs filed a demand for class arbitration and defendants filed a competing motion to compel ... Keep Reading »
CFPB Says Arbitration Agreements Limit Consumer Relief in Class Actions; New Regulations on the Horizon?
The Supreme Court's 2011 decision in AT&T Mobility LLC v. Concepcion upheld an arbitration clause requiring arbitration of claims individually, thereby effectively preventing class actions. While the consumer finance industry and other industries frequently invoked arbitration clauses in defending lawsuits before AT&T, since that decision was published, industry has increasingly relied on such clauses to successfully defend against expensive class ... Keep Reading »