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Ballard Spahr Senior Counsel Alan S. Kaplinsky and Mark J. Levin, and David Sherwyn, Professor of Law at Cornell University’s School of Hotel Administration, today submitted lengthy comments to the Consumer Financial Protection Bureau opposing the recent petition filed by consumer advocates urging the CFPB to undertake rulemaking 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

Currently, California trial court proceedings are automatically stayed when a party appeals an order denying a motion to compel arbitration.  However, on October 10, 2023, Governor Newsom signed California Senate Bill No. 365 (SB365) into law.  

Effective January 1, 2024, SB365 will amend California Code of Civil Procedure Section 1294 to state that “the perfecting of such an appeal [of an order denying a motion to compel arbitration] shall not automatically stay any proceedings in the trial court during the pendency of the appeal.”… Continue Reading

Earlier this week, a group of consumer advocate organizations filed a Petition for Rulemaking with the CFPB 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. There are numerous compelling reasons why the CFPB should not engage in such rulemaking.… Continue Reading

Professor Jeff Sovern recently blogged about the FTC’s June 2023 revisions to its Endorsement Guide.  The Guide helps advertisers and endorsers make sure that their advertising using endorsements or testimonials is truthful and not misleading.  The blog focused on the FTC’s adoption of a definition of “clear and conspicuous” as meaning that “a disclosure is difficult to miss (i.e.,… Continue Reading

We previously wrote about a Ninth Circuit appeal dealing with the use of bellwether procedures to resolve mass arbitration claims brought by thousands of customers against Verizon Wireless.  That appeal remains pending and is scheduled for oral argument in September.  In the meantime, however, a California federal district court has 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.… Continue Reading

Last week, Professor Jeff Sovern of St. John’s University School of Law published a blog post discussing a new empirical study by Roseanna Sommers, Assistant Professor of Law at the University of Michigan Law School, dealing with consumer understanding of predispute arbitration agreements.  According to Professor Sovern, the Sommers study augments his earlier (2014) study of this subject and confirms that “consumers are generally unaware of whether their contracts contain arbitration clauses, and consumers who have agreed to such clauses tend to hold mistaken beliefs about their procedural rights ….”… Continue Reading

We previously blogged about Viking River Cruises, Inc. v. Moriana, in which the U.S. Supreme Court held that individual employee claims under California’s Labor Code Private Attorneys General Act (PAGA) are subject to arbitration under the Federal Arbitration Act (FAA).  While the Court further ruled that representative employee PAGA claims are not preempted by the FAA, it nevertheless dismissed those claims for lack of standing based on its interpretation of California standing law. … Continue Reading

Today, the U.S. Supreme Court held in a 5-4 decision that an appeal of the denial of a motion to compel arbitration automatically stays lower court proceedings pending the outcome of the appeal.  The decision in Coinbase, Inc. v. Bielski resolves a split between the Third, Fourth, Seventh, Tenth, Eleventh, and D.C.… Continue Reading

Our response to Professor Sovern’s article about arbitration opt-outs and so-called “dark patterns” prompted a reply in which he poses two “challenges”: (1) “prove that opt outs benefit consumers by telling us how many consumers opt out,” and (2) “get rid of the deadline [for opting out] and allow … consumers to opt out of arbitration when they know there’s a dispute.”… Continue Reading

For the past decade, Professor Jeff Sovern has criticized companies for including opt out provisions in their consumer arbitration clauses, even though such provisions give consumers freedom of choice by allowing them to reject arbitration without affecting the other contractual terms.  Most recently, he argues that opt out provisions are actually what the FTC calls a “dark pattern”—a practice that “tricks users into making choices they would not otherwise have made and that may cause harm.” … Continue Reading