Earlier this week, we wrote about Verizon’s appeal to the Ninth Circuit from a district court ruling that the bellwether provision in its arbitration clause was unconscionable.  Both the U.S. Chamber of Commerce and the California Employment Law Council have filed amicus curiae briefs in support of Verizon’s position that bellwether procedures, which for decades have been used to help resolve complex court litigations, are equally beneficial in mass arbitration situations and not unconscionable.

The Chamber argues that mass arbitrations are “ripe for abuse” because “plaintiffs’ counsel seek … to create coercive settlement leverage based not on the merits of the claims, but based only on the fact that many businesses—like Verizon—agree to pay the costs associated with arbitration …. And the lion’s share of these fees … must be paid almost immediately after the arbitration is filed …. When aggregated in a mass arbitration, these fees become astronomical.”  By contrast, arbitrating bellwether cases ensures merits-based resolutions of mass arbitrations, preserving the benefits of arbitration for all parties, and is more likely to lead to a global settlement of all of the claims.

The Council argues that “[a]rbitration agreements often borrow procedures and processes from the judicial system; doing so is entirely lawful, not unconscionable.  The district court here failed to consider this basic point.  If bellwether procedures are lawful in court, they also are lawful in arbitration.”  The bellwether approach, it contends, “is useful because it benefits the courts and the parties, and it typically results in a quicker resolution of all the claims than if they had been tried individually.”

Appellees’ brief is due to be filed with the Ninth Circuit on December 21, 2022, unless extended.  Verizon will then have 21 days to file a reply.

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