I. Introduction -

There has been much debate concerning the scope of the Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion, and the enforcement of collective arbitration waivers — also called “class action waivers” — in antitrust cases. Class action waivers are contractual provisions that require the parties to submit all potential claims to individual arbitration while simultaneously forbidding them from seeking any form of class-wide relief. The ability of corporate defendants to enforce such waivers in the consumer antitrust context has potentially wide-ranging implications. Yet the exact contours of Concepcion’s holding remain ambiguous. While the Court was clear that “state-law rules” invalidating class action waivers are preempted by the Federal Arbitration Act (“FAA”), it left open the possibility that they could be found unenforceable under federal common law, or what is sometimes referred to as the “federal substantive law of arbitrability.”

In an apparent effort to clear up this ambiguity, the Supreme Court granted certiorari in American Express Company v. Italian Colors Restaurant, to consider whether the FAA “permits courts, invoking the ‘federal substantive law of arbitrability,’ to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal law claim.” This article provides a background of the recent jurisprudence on this issue, discusses the circuit court landscape, evaluates the likely outcome of Amex III, and assesses the viability of alternative strategies for challenging class action waivers that are likely to exist post-Amex III.

Originally published in The Journal of the Antitrust and Unfair Competition Law Section of the State Bar of California on April 1, 2013.

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Topics:  ADA, ADEA, American Express, Arbitration, Arbitration Agreements, AT&T Mobility, AT&T Mobility v Concepcion, Class Action, Class Action Arbitration Waivers, ECOA, Federal Arbitration Act, Mitsubishi, Savings Clause, SCOTUS, TILA, Vindication of Statutory Rights Doctrine

Published In: Alternative Dispute Resolution (ADR) Updates, Antitrust & Trade Regulation Updates, Civil Procedure Updates, General Business Updates, Conflict of Laws Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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