Arbitration

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As we previously reported, the American Arbitration Association has been considering changes to its rules for consumer and workplace arbitrations. In February 2025, the AAA requested public comments on proposed changes to its rules. We submitted comprehensive comments to identify ways to improve the proposed rules to ensure fairness for all while reducing the risks of abuse of the arbitration process—especially in mass arbitrations.

The AAA has published at least some of the comments it received about its proposed consumer and employment rules, although the AAA allowed a number of commentators to remain anonymous.

After considering these comments, the…

Continue Reading American Arbitration Association announces new consumer and employment arbitration rules

Class actions—and increasingly, mass arbitrations—pursuing claims under the Video Privacy Protection Act are proliferating. My colleagues Archis Parasharami and Sophia Mancall-Bitel have recently written an article about these claims, key court decisions interpreting the VPPA, and strategies and defenses for companies facing VPPA claims.

Continue Reading Video Privacy Protection Act claims are on the rise

As we previously discussed, the American Arbitration Association requested comments on proposed changes to its Consumer and Employment Arbitration Rules.

We submitted comprehensive comments on the proposed amendments on behalf of the U.S. Chamber of Commerce, the American Financial Services Association, and the Automotive Alliance for Innovation. The comments identify ways in which the proposed changes can be modified to ensure fairness for all parties while reducing the risks of potential abuse of the arbitration process. 

Notably, the comments focus heavily on the urgent need for action to curb abusive mass arbitrations. We have discussed the issue of mass…

Continue Reading Comments on proposed changes to American Arbitration Association consumer and employment arbitration rules

The American Arbitration Association has announced that it has drafted potential amendments to its Consumer Arbitration Rules and Employment Arbitration Rules, and is seeking comments on those proposed revisions. The AAA has posted the proposed new Consumer and Employment Rules, charts comparing the new Consumer and Employment language to the current language, as well as summaries of the extensive revisions (one for the Consumer Rules changes and one for the Employment Rules changes).

We are evaluating the proposed changes, which are numerous. The deadline to submit comments is February 28, 2025. We anticipate working with members of…

Continue Reading American Arbitration Association seeks comments on changes to consumer and employment arbitration rules

We have written before about the well-documented rise of abusive mass arbitrations, which seeks to weaponize arbitration clauses to try to extract a settlement from the targeted business, regardless of the merits of the underlying claims. The goal of these mass-arbitration filers is to inflict such high upfront costs on the targeted business—which pays most of the fees of consumer and workplace arbitrations—that it’s simply too expensive to contest the merits of any claim.  With alarming frequency, mass arbitration campaigns are reported to include claims that are obviously frivolous (such as claims filed in the names of people who…

Continue Reading Amicus brief defends use of bellwether proceedings to resolve mass arbitrations

Abuse of the arbitration system by plaintiffs’ lawyers through the filing of mass arbitrations is by now well-documented, including in a paper we authored for the Chamber of Commerce’s Institute for Legal Reform. Companies have responded by revising arbitration agreements to address this abuse, and arbitral forums have adopted new default rules to govern mass arbitrations when the issue is not addressed in the arbitration agreement.

Not surprisingly, plaintiffs’ lawyers—hoping to retain the ability to coerce settlements through mass-arbitration filings—are challenging contract provisions and arbitral forum rules that address the issue.

A panel of the Ninth Circuit recently refused to enforce the arbitration agreement in Ticketmaster’s terms of service, rejecting the company’s attempt to address the problem of mass arbitration by incorporating the rules of a new arbitration provider (New Era). That decision—Heckman v. Live Nation Entertainment, Inc.—is flawed in several respects. But more important for most businesses, the decision is narrow and rests on the unique aspects of the New Era rules adopted in the Ticketmaster agreement. Plaintiffs’ lawyers are already arguing that Heckman sweeps more broadly, but that approach misreads the opinion and, in addition, contravenes Supreme Court precedent interpreting the Federal Arbitration Act (FAA).

A majority of the Heckman panel first concluded that the arbitration agreement’s use of New Era’s rules was unconscionable under California law. Second, the entire panel—both the majority and the concurring judge—held that New Era’s rules transformed mass arbitrations into a type of arbitration so unlike traditional individual arbitration that (in the panel’s view) the FAA no longer applies. And the panel went on to say that without the FAA, which (as the Supreme Court held in AT&T Mobility LLC v. Concepcion) preempts California’s Discover Bank rule against waivers of class arbitration, Ticketmaster’s arbitration agreement was invalid under Discover Bank.

This post first describes the relevant background and the Ninth Circuit decision. We then explain why that decision is limited to New Era’s unique approach to mass arbitration—and that any broader reading of the decision is barred by the Supreme Court’s holdings in Concepcion and subsequent cases.Continue Reading Ninth Circuit holds that arbitration agreement adopting New Era’s mass-arbitration rules is unconscionable—but the decision is narrow and limited to New Era’s unique rules

In recent years, parties entering into class settlements—largely at the urging of courts—have sought to boost the rate at which class members participate in those settlements by reducing gating requirements for submitting claims. In an increasing number of cases, claims are flooding in. But all too often, a meaningful percentage of those claims are fraudulent. And the tools used to submit these improper claims are being used to subvert other parts of the legal system.Continue Reading The implications of skyrocketing fraudulent claims in class action settlements

The Seventh Circuit’s recent decision in Wallrich v. Samsung Electronics America, Inc. is significant news in the world of mass arbitration. In recent years, businesses have faced an increasing risk of being targeted by abusive mass arbitration campaigns that seek to leverage the arbitration fees the business must pay, win or lose, to coerce a settlement of even meritless claims. In Wallrich, Samsung was facing a mass arbitration that it contended was based on meritless claims; among other things, Samsung said, some of the claimants were not really Samsung customers at all.Continue Reading Seventh Circuit reverses order forcing Samsung to pay arbitration fees for mass arbitration

The AAA recently announced a new set of rules of mass arbitrations, as well as new fee schedules for consumer and worker arbitrations. We and some of our colleagues wrote a Legal Update about the changes, how they impact businesses, and whether the updates might help with widespread abuses in mass arbitrations.

Continue Reading American Arbitration Association updates its mass arbitration rules and fee schedules

Today the Supreme Court held that when a party files an immediate appeal of a federal district court order denying arbitration, the district court must stay its proceedings relating to the merits (including discovery) during the appeal. The decision in Coinbase, Inc. v. Bielski will have a significant impact in federal courts in California and New York in particular, where the prior regime had given district courts wide discretion over whether to grant full or partial stays pending appeal or to deny stays altogether.

As we anticipated from attending the oral arguments, the Justices were closely divided on the issue. In an opinion for the Court written by Justice Kavanaugh, the Court held, by a vote of 5-4, that “the district court must stay its proceedings” pending the outcome of the appeal.Continue Reading Supreme Court holds that district courts must stay proceedings pending appeals of orders denying arbitration