Mark J. Levin

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For the second time in two years, the U.S. Supreme Court is being asked to decide whether the Federal Arbitration Act (FAA) preempts California law (the “McGill Rule”) which invalidates arbitration agreements that waive the right of consumers to seek public injunctive relief.  This time, however, there are changed circumstances that increase the odds that the Court will grant review of this critically important arbitration issue.… Continue Reading

Consumer advocates often contend that Congress should prohibit arbitration agreements with class action waivers because servicemembers and other consumers need class actions to effectuate their statutory rights.  However, a report issued by the Government Accountability Office (GAO) to Congress last month contains data that refutes that argument.

The GAO report studied the impact of mandatory arbitration agreements on claims by servicemembers under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) and the Servicemembers Civil Relief Act (SCRA). … Continue Reading

A litigation phenomenon that has recently surged is the simultaneous filing of hundreds or even thousands of individual arbitration demands against the same company by the same law firm, requiring the company to pay the substantial up-front filing fees typically charged by arbitration administrators.  Initially used in the context of employment arbitration claims, such “mass arbitrations” are now also being pursued against consumer businesses.… Continue Reading

Proposed legislation now working its way through the New Jersey Senate would eliminate the eligibility of postsecondary students and other individuals for State student assistance, training and employment services, including grants, scholarships and loans, if the school or training provider requires students to sign enrollment contracts that include “forced arbitration and other restrictive clauses, including clauses that require students to waive their right to participate in a class action against the company.” … Continue Reading

After denying the defendants’ petitions for panel and en banc rehearing in the Blair v. Rent-a-Center appeals, the Ninth Circuit has granted their motions to stay the issuance of the Court’s mandates for 90 days pending the filing of petitions for certiorari with the U.S. Supreme Court. If petitions for certiorari are filed, the stays will continue until final disposition by the Supreme Court.… Continue Reading

As we recently advised you , on September 9, 2019, the Ninth Circuit ordered the plaintiffs in the Blair v. Rent-A-Center appeals to respond to the defendants’ petitions for rehearing, which ask the court en banc to overturn a panel decision holding that the Federal Arbitration Act (FAA) does not preempt the California Supreme Court’s McGill Rule.… Continue Reading

We recently posted a discussion concerning the petitions for rehearing filed in the Blair v. Rent-A-Center appeals pending in the Ninth Circuit which raise the issue of whether the Federal Arbitration Act preempts California’s McGill Rule. The McGill Rule derives from the California Supreme Court’s ruling in McGill v. Citibank, N.A.… Continue Reading

According to a forthcoming article by Professors Andrea Chandrasekher and David Horton in the California Law Review, more consumers and their lawyers would take advantage of individual arbitration if states enacted non-waivable statutes allowing an arbitrator who awards a prevailing consumer fees and expenses under a fee-shifting statute to augment the award with an extra “bounty” for winning the arbitration.  … Continue Reading

The U.S. Chamber of Commerce, American Bankers Association, the Consumer Bankers Association, Financial Services Roundtable, American Financial Services Association, Texas Association of Business, Texas Bankers Association, and nine chambers of commerce located throughout Texas today filed a lawsuit in Texas federal court challenging the Consumer Financial Protection Bureau’s final arbitration rule.… Continue Reading

In its final arbitration rule issued on July 10, 2017, the CFPB responds to our calculation, made when the proposed rule was issued in May 2016, that the rule will cause 53,000 providers who currently use arbitration agreements to incur between $2.6 billion and $5.2 billion over a five-year period to defend against an additional 6,042 class actions.… Continue Reading