On June 11, the American Bankers Association and the Consumer Bankers Association, represented by Ballard Spahr, filed an amicus brief in support of a petition for certiorari asking the Supreme Court to review the Ninth Circuit’s ruling in HRB Tax Group, Inc. v. Snarr that the Federal Arbitration Act (FAA) does not preempt California’s McGill rule. … Continue Reading
class action waivers
Professor Sovern’s Opt-In Arbitration Proposal: A Wolf In Sheep’s Clothing
Professor Jeff Sovern responded to our blog criticizing his proposal for a new CFPB arbitration rule by asserting that his proposed rule is not substantially the same as the prior CFPB rule that Congress vetoed and, therefore, the Congressional Review Act would not bar its promulgation. According to Professor Sovern: “I don’t see how my rule giving consumers a choice to opt in to arbitration clauses, which could include class action waivers, could be substantially the same as the earlier rule which blocked consumers and companies from agreeing to class action waivers.”… Continue Reading
Professor Sovern’s opt-in arbitration proposal is neither new nor supportable
Professor Jeff Sovern recently proposed that the CFPB issue a supposedly “new” arbitration rule “that prevents companies from blocking consumers from suing in court unless consumers specifically opted in to the arbitration clause” after being given a CFPB-mandated disclosure that if they do not sign and their rights are violated, they “may still sue us in court or later agree to arbitration.” … Continue Reading
House Judiciary Subcommittee Hears Testimony on Arbitration Agreements
A subcommittee of the House Judiciary Committee recently held a hearing titled “Justice Denied: Forced Arbitration and the Erosion of our Legal System.” This hearing, which followed an April 2 hearing at which Alan Kaplinsky testified on “Arbitration in America” before the Senate Judiciary Committee, was held in conjunction with several legislative proposals regarding arbitration that are pending in the House of Representatives.… Continue Reading
State of Washington Executive Order May Be Preempted by FAA
An Executive Order issued by Washington Governor Jay Inslee on June 12, 2018 seeks to rebuff the U.S. Supreme Court’s ruling in Epic Systems LLC v. Lewis, 138 S. Ct. 1612 (May 21, 2018), by implementing new state procurement procedures that overtly discriminate against companies whose employment agreements contain arbitration provisions with class action waivers. … Continue Reading
Treasury Department Report Eviscerates CFPB Arbitration Rule
In a scathing report released today, the U.S. Department of the Treasury concludes that the CFPB’s final arbitration rule “failed to meaningfully evaluate whether prohibiting mandatory arbitration clauses in consumer financial contracts would serve either consumer protection or the public interest — its two statutory mandates.” Moreover, according to the report, the arbitration rule will impose “extraordinary” economic costs on businesses and consumers by generating a “massive” increase in class action litigation that will not benefit consumers but will effect a “large wealth transfer” to their lawyers.… Continue Reading
The CFPB’s Disagreement with Our Calculation of the Industry Costs of the Arbitration Rule Is Much Ado About Nothing
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
Rutgers Law School arbitration symposium will feature one-sided panel
On April 7, 2017, the Rutgers Institute for Professional Education and Rutgers University Law Review will sponsor an all-day symposium entitled: “Resolving the Arbitration Dispute in Today’s Legal Landscape.” One of the four panels will be devoted to the CFPB’s arbitration rulemaking.
All four speakers on the CFPB panel are law professors. … Continue Reading
High Praise for WSJ Editorial, with a Small Caveat
A recent editorial in the Wall Street Journal is a “must read” for those who will be affected if the CFPB’s May 5, 2016 proposed rule banning class action waivers in consumer financial services arbitration agreements becomes final. The editorial predicts that the proposed rule will encourage more class actions to be filed against financial services companies, that consumers will be shortchanged by the loss of arbitration, and that the only winners will be the trial lawyers who reap enormous financial benefits from class action settlements.… Continue Reading
House Financial Services Committee Scrutinizes Basis of Proposed CFPB Arbitration Rule
On Wednesday May 18, 2016, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit held a hearing entitled “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?”
The Committee questioned the panel members on whether the CFPB’s proposed rule meets the mandate of Section 1028 of the Dodd-Frank Act.… Continue Reading