Arbitration

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Our special guest is David Horton, Professor of Law at the University of California, Davis, who has written a creative and thought-provoking article analyzing how courts should interpret certain key provisions that are frequently used in consumer arbitration agreements. The article may be accessed online at SSRN and will be published in the Washington University Law Review later this year.… Continue Reading

We are very pleased to report that the CFPB has denied a Petition for Rulemaking filed by a group of consumer advocate organizations that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen. … Continue Reading

Earlier this week, the CFPB issued a proposed rule.  Among other things, the proposed rule would “forbid covered persons from including in their consumer contracts any terms or conditions that purport to waive substantive legal rights and protections” or that “reserve to the covered person the right to unilaterally amend a material term of the contract.” … Continue Reading

We previously wrote about a California federal district court decision in Heckman v. Live Nation Entertainment that denied Ticketmaster’s motion to compel arbitration of Sherman Act antitrust claims based in large part on the bellwether procedures for mass arbitration claims set forth in the company’s arbitration clause.  That decision has now been affirmed by the Ninth Circuit Court of Appeals.… Continue Reading

The CFPB has banned private dispute resolution platform Ejudicate from arbitrating disputes about consumer financial products, saying that the company had misled student borrowers about the company’s neutrality and initiated sham arbitration proceedings.

The CFPB said that Ejudicate initiated those proceedings on behalf of the company Prehired—a firm which was shut down in 2023 by the CFPB and several state attorneys general, in part on the grounds that its income share agreements were illegal loans and its income share agreement program involved illegal lending practices.… Continue Reading

As reported in Public Citizen’s Consumer Law & Policy Blog, the Pennsylvania Supreme Court recently agreed to review Chilutti v. Uber Technologies, Inc., in which a divided panel of the Pennsylvania Superior Court (and later the Superior Court en banc) held that courts must apply a “stricter burden of proof” when asked to enforce an arbitration agreement in a company’s online terms and conditions because arbitration waives the constitutional right to a jury trial.… Continue Reading

On July 8, we published a blog about a landmark 7th Circuit opinion involving mass arbitration: Pauline Wallrich v. Samsung Electronics America, Incorporated. In that opinion, the Court dismissed a lawsuit against Samsung seeking an order requiring Samsung to advance AAA’s filing fees. Among other reasons, the Court held that the plaintiffs did not produce evidence documenting that they purchased Samsung devices and were subject to arbitration agreements.… Continue Reading

We previously wrote about an Illinois federal district court order requiring Samsung to pay about $4 million in arbitration fees in connection with 35,000 individual arbitration demands filed as part of a “mass arbitration” and the Seventh Circuit’s subsequent stay of that order after Samsung appealed. The Seventh Circuit has now decided the appeal—in favor of Samsung—an important ruling that may help level a mass arbitration playing field that heretofore has been tilted heavily in favor of the consumers.… Continue Reading

The U.S. Supreme Court has held unanimously in Smith v. Spizzirri that when a district court finds that a lawsuit involves an arbitrable dispute and a party has requested a stay of the court proceedings pending arbitration, Section 3 of the Federal Arbitration Act (FAA) compels the court to issue a stay of the suit; the court lacks jurisdiction to dismiss the suit on the basis that all of the claims are subject to arbitration. … Continue Reading

Our special guest is Professor Richard Frankel of Drexel University Thomas R. Kline School of Law and the author of a recent article on mass arbitration.  In this episode, we first discuss what mass arbitration is, how it relates to class action lawsuits, and the role of public enforcement.  We then discuss the industry and consumer positions on the use of mass arbitration and the empirical study conducted by Prof.… Continue Reading