We previously wrote about a Ninth Circuit appeal taken by Verizon Wireless, Inc. after a California district court judge held that its arbitration agreement, which required mass arbitration disputes to be resolved by multiple rounds of bellwether arbitrations, was substantively unconscionable because it effectively eliminated the claims of thousands of Verizon customers who were required to wait for up to 156 years for the bellwether arbitrations to conclude. … Continue Reading
Arbitration
442 Congress members did NOT join anti-arbitration letter to CFPB
Recently, 93 members of Congress (all Democrats) signed a letter in support of the pending Petition for Rulemaking filed by consumer advocacy groups in September that would prohibit pre-dispute consumer arbitration clauses and permit only post-dispute clauses. The letter argues that the proposed rulemaking is “much-needed” to protect consumers from “forced arbitration clauses in the fine print, take-it-or-leave-it terms accompanying many financial products and services.”… Continue Reading
Professor Sovern’s reply underscores need for consumer education
Recently, Professor Sovern replied to our blog post that commented on the letter that he and 160 other law academicians submitted to the CFPB in support of the pending Petition for Rulemaking that would prohibit pre-dispute consumer arbitration clauses and permit only post-dispute clauses.
In response, we would like to acknowledge that two of Professor Sovern’s statements are accurate. … Continue Reading
CFPB rulemaking on post-dispute consumer arbitration agreements not mentioned in Fall 2023 rulemaking agenda: is there significance?
As we reported, the CFPB just released its Fall 2023 rulemaking agenda as part of the Fall 2023 Unified Agenda of Federal Regulatory and Deregulatory Actions.
I have been contacted by many clients who have asked me whether we should read any significance into the fact that the anti-arbitration Petition for Rulemaking submitted to the CFPB by a consortium of consumer advocacy groups on September 13 is not mentioned in the new rulemaking agenda. … Continue Reading
Comment letters from consumer advocates bolster case against CFPB rulemaking on post-dispute arbitration clauses
We previously reported and released a podcast episode on comments that we and Professor David Sherwyn of Cornell University submitted in opposition to the Petition for Rulemaking filed by a number of consumer advocacy groups urging the CFPB to prohibit pre-dispute consumer arbitration clauses and allow only post-dispute clauses. Among other things, we argued that the rule proposed by the Petitioners would be prohibited by the Congressional Review Act (CRA) because it is substantially the same as the Final Arbitration Rule promulgated by the CFPB in July 2017 that Congress overrode in November 2017. … Continue Reading
Seventh Circuit stays order requiring Samsung to pay millions in arbitration fees
We previously blogged about an Illinois federal district court order requiring Samsung to pay about $4 million in arbitration fees in connection with 35,000 individual arbitration demands filed as part of a “mass arbitration.” By way of update, Samsung is pursuing an appeal to the Seventh Circuit, which recently granted Samsung’s motion for a stay of the district court’s order pending appeal. … Continue Reading
This week’s podcast episode: Prohibited by law and totally ineffective—just two of the many reasons why the CFPB should deny the petition for rulemaking on post-dispute consumer arbitration agreements
Our special guest is David Sherwyn, Professor of Law at Cornell University’s School of Hotel Administration. In September 2023, a group of consumer advocate organizations filed a Petition for Rulemaking with the CFPB that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen. … Continue Reading
Ballard Spahr attorneys and Cornell University law professor submit comments opposing CFPB rulemaking on post-dispute consumer arbitration agreements
Ballard Spahr Senior Counsel Alan S. Kaplinsky and Mark J. Levin, and David Sherwyn, Professor of Law at Cornell University’s School of Hotel Administration, today submitted lengthy comments to the Consumer Financial Protection Bureau opposing the recent petition filed by consumer advocates urging the CFPB to undertake rulemaking that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen.… Continue Reading
California ends automatic stays of litigation when orders denying motions to compel arbitration are appealed
Currently, California trial court proceedings are automatically stayed when a party appeals an order denying a motion to compel arbitration. However, on October 10, 2023, Governor Newsom signed California Senate Bill No. 365 (SB365) into law.
Effective January 1, 2024, SB365 will amend California Code of Civil Procedure Section 1294 to state that “the perfecting of such an appeal [of an order denying a motion to compel arbitration] shall not automatically stay any proceedings in the trial court during the pendency of the appeal.”… Continue Reading
CFPB reacts quickly and favorably to Petition submitted to it by consumer groups to ban pre-dispute arbitration
Last week, a group of consumer advocate organizations filed a Petition for Rulemaking with the CFPB that would prohibit the use of pre-dispute arbitration clauses in consumer contracts in favor of arbitration clauses that would permit consumers to choose between arbitration and litigation only after a dispute has arisen. We published a blog last Friday in which we enumerated the many flaws in the Petition and urged the CFPB to reject it.… Continue Reading