This fall, the U.S. Supreme Court will consider whether the standard that California courts use for deciding whether contracts containing class-action waivers are unconscionable is preempted by the Federal Arbitration Act (FAA). In Stolt-Nielsen S.A. v. AnimalFeeds International Corp.,1 the Court held invalid an arbitration panel’s decision imposing class arbitration on parties whose agreement was silent on the issue. The Court reasoned that such a decision violated the FAA because the parties did not affirmatively agree to classwide arbitration.
Prior to AnimalFeeds, responding to the Court’s earlier ruling in Green Tree Financial Corp. v. Bazzle,2 companies began including express class-action waivers in their predispute arbitration agreements. As discussed in prior columns,3 plaintiffs challenging such class arbitration waiver clauses on the basis of unconscionability have found success in some jurisdictions, such as California and New Jersey, and failed in others, such as Tennessee.4 On May 24, 2010, the Supreme Court granted review in a case from the U.S. Court of Appeals for the Ninth Circuit, AT&T Mobility LLC v. Concepcion,5 to decide whether California’s application of the unconscionability doctrine is preempted by the FAA.
Procedural History
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
