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

In a recent unpublished memorandum opinion in a putative class action, Carpenter et al. v. Opportunity Financial, LLC, the U.S. Court of Appeals for the Ninth Circuit upheld an arbitration clause in an agreement governing loans serviced by fintech Opportunity Financial, LLC (“OppFi”).  After a de novo review of a California U.S.… Continue Reading

After several years of refusing to adopt special rules applicable in mass arbitration proceedings, JAMS announced that it has issued Mass Arbitration Procedures and Guidelines and a Mass Arbitration Procedures Fee Schedule effective May 1, 2024.  The Mass Arbitration Procedures apply “only where the Parties have agreed to the application of these Procedures in a pre- or post- dispute written agreement.” … Continue Reading

In connection with the petition to ban pre-dispute consumer arbitration agreements pending before the Consumer Financial Protection Bureau (CFPB) and a recent Senate Judiciary Committee hearing on “forced arbitration,” Congressman Andy Barr (R-Ky.) and Senator Thom Tillis (R-N.C.) and the American Financial Services Association (AFSA) have voiced their strong opposition to further regulation of consumer arbitration. … Continue Reading

We previously wrote about a Ninth Circuit appeal taken by Verizon Wireless, Inc. after a California district court judge held that its arbitration agreement, which required mass arbitration disputes to be resolved by multiple rounds of bellwether arbitrations, was substantively unconscionable because it effectively eliminated the claims of thousands of Verizon customers who were required to wait for up to 156 years for the bellwether arbitrations to conclude. … Continue Reading

Recently, 93 members of Congress (all Democrats) signed a letter in support of the pending Petition for Rulemaking filed by consumer advocacy groups in September that would prohibit pre-dispute consumer arbitration clauses and permit only post-dispute clauses.  The letter argues that the proposed rulemaking is “much-needed” to protect consumers from “forced arbitration clauses in the fine print, take-it-or-leave-it terms accompanying many financial products and services.”… Continue Reading

Recently, Professor Sovern replied to our blog post that commented on the letter that he and 160 other law academicians submitted to the CFPB in support of the pending Petition for Rulemaking that would prohibit pre-dispute consumer arbitration clauses and permit only post-dispute clauses. 

In response, we would like to acknowledge that two of Professor Sovern’s statements are accurate. … Continue Reading

As we reported, the CFPB just released its Fall 2023 rulemaking agenda as part of the Fall 2023 Unified Agenda of Federal Regulatory and Deregulatory Actions.  

I have been contacted by many clients who have asked me whether we should read any significance into the fact that the anti-arbitration Petition for Rulemaking submitted to the CFPB by a consortium of consumer advocacy groups on September 13 is not mentioned in the new rulemaking agenda. … Continue Reading

We previously reported and released a podcast episode on comments that we and Professor David Sherwyn of Cornell University submitted in opposition to the Petition for Rulemaking filed by a number of consumer advocacy groups urging the CFPB to prohibit pre-dispute consumer arbitration clauses and allow only post-dispute clauses.  Among other things, we argued that the  rule proposed by the Petitioners would be prohibited by the Congressional Review Act (CRA) because it is substantially the same as the Final Arbitration Rule promulgated by the CFPB in July 2017 that Congress overrode in November 2017. … Continue Reading