Companies have new protections against class action lawsuits, thanks to two recent decisions by the U.S. Supreme Court. The court’s decisions in American Express v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), and Oxford Health Plans v. Sutter, 133 S. Ct. 2064 (2013), provide significant support for companies to incorporate class action waivers in their standard form contracts with investors, customers and vendors. Attorneys should pay close attention, as the effects of these decisions play out in lower courts, and carefully draft arbitration provisions to take full advantage of the new protections.
In American Express, the Supreme Court addressed “whether a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.”
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