On June 20, 2013, the U.S. Supreme Court issued the latest in a string of cases explaining that class actions are the exception to the usual rule of individualized actions, not an entitlement, and that parties cannot escape the clear terms of binding arbitration agreements. It began with Stolt-Nielsen S.A. v. AnimalFeeds International, where the court ruled that companies could not be forced into class arbitration if they had not agreed to it; that is, mere silence on the issue of class arbitration is not enough.1 Then, in AT&T Mobility v. Concepcion, the court held that the Federal Arbitration Act, 9 U.S.C. §1 et seq. (FAA), preempted a California judicial rule barring as unconscionable waivers of class action arbitration.2
And while some had speculated that Concepcion was limited in scope to preemption of state laws inconsistent with the goals of the FAA, the Supreme Court's most recent decision in American Express v. Italian Colors Restaurant has put an end to that speculation, holding that American Express' class action waivers in its arbitration agreements could not be invalidated simply because the cost of individually arbitrating federal antitrust claims would exceed any potential individual recovery.3 Now there can be no doubt: A deal is a deal when it comes to parties' arbitration agreements relinquishing their class action rights for federal claims as well.
The Class Action Waiver
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