We previously wrote about a Ninth Circuit appeal dealing with the use of bellwether procedures to resolve mass arbitration claims brought by thousands of customers against Verizon Wireless. That appeal remains pending and is scheduled for oral argument in September. In the meantime, however, a California federal district court has denied Ticketmaster’s motion to compel arbitration of Sherman Act antitrust claims based in large part on the bellwether procedures for mass arbitration claims set forth in the company’s arbitration clause.… Continue Reading
arbitration
If consumers are “clueless” about arbitration, it’s not industry’s fault
Last week, Professor Jeff Sovern of St. John’s University School of Law published a blog post discussing a new empirical study by Roseanna Sommers, Assistant Professor of Law at the University of Michigan Law School, dealing with consumer understanding of predispute arbitration agreements. According to Professor Sovern, the Sommers study augments his earlier (2014) study of this subject and confirms that “consumers are generally unaware of whether their contracts contain arbitration clauses, and consumers who have agreed to such clauses tend to hold mistaken beliefs about their procedural rights ….”… Continue Reading
Viking River Cruises revisited
We previously blogged about Viking River Cruises, Inc. v. Moriana, in which the U.S. Supreme Court held that individual employee claims under California’s Labor Code Private Attorneys General Act (PAGA) are subject to arbitration under the Federal Arbitration Act (FAA). While the Court further ruled that representative employee PAGA claims are not preempted by the FAA, it nevertheless dismissed those claims for lack of standing based on its interpretation of California standing law. … Continue Reading
SCOTUS: appeal from denial of arbitration automatically stays lower court proceedings
Today, the U.S. Supreme Court held in a 5-4 decision that an appeal of the denial of a motion to compel arbitration automatically stays lower court proceedings pending the outcome of the appeal. The decision in Coinbase, Inc. v. Bielski resolves a split between the Third, Fourth, Seventh, Tenth, Eleventh, and D.C.… Continue Reading
Challenges accepted, Professor Sovern
Our response to Professor Sovern’s article about arbitration opt-outs and so-called “dark patterns” prompted a reply in which he poses two “challenges”: (1) “prove that opt outs benefit consumers by telling us how many consumers opt out,” and (2) “get rid of the deadline [for opting out] and allow … consumers to opt out of arbitration when they know there’s a dispute.”… Continue Reading
Arbitration opt out provisions benefit consumers, Professor Sovern
For the past decade, Professor Jeff Sovern has criticized companies for including opt out provisions in their consumer arbitration clauses, even though such provisions give consumers freedom of choice by allowing them to reject arbitration without affecting the other contractual terms. Most recently, he argues that opt out provisions are actually what the FTC calls a “dark pattern”—a practice that “tricks users into making choices they would not otherwise have made and that may cause harm.” … Continue Reading
Professor Sovern: You’re mixing apples and oranges
In a recent blog post, Professor Jeff Sovern contends that the case against consumer arbitration has been bolstered by the fact that a lawyer for the “conservative” Competitive Enterprise Institute made positive remarks about the importance of the Seventh Amendment right to a jury trial in testifying at a House Financial Services Committee hearing. … Continue Reading
New Jersey appellate court decision limiting Atalese to consumer and employment arbitration clauses may fuel FAA preemption argument
In 2014, the New Jersey Supreme Court held in Atalese v. U.S. Legal Services Group, L.P. that in order to be enforceable, arbitration clauses must contain an express waiver of the parties’ right to seek relief in a court of law. Earlier this month, in County of Passaic v. Horizon Healthcare Services, Inc.… Continue Reading
Texas federal court enforces arbitration agreement and dismisses class action lawsuit filed against fintech company for evading Texas usury limit; company continues to face “true lender” challenge from California DFPI
A Texas federal court has dismissed a class action lawsuit against Opportunity Financial, LLC (“OppFi”) alleging OppFi violated Texas usury law by charging interest on loans it made through a partnership with a state-chartered bank at rates above the maximum rate permitted by Texas law. The plaintiff alleges that the partnership was a “rent-a-bank” scheme to evade state law and that OppFi, rather than its bank partner, was the “true lender” on the loans.… Continue Reading
California federal court enforces “clickwrap” web agreement and compels arbitration of claims against Google
Last week, a California federal court granted Google’s motion to compel arbitration of claims asserted by customers who alleged that their Fitbit watches burned their skin. The opinion in Houtchens v. Google found that the company’s “clickwrap” agreement put the plaintiffs on “reasonably conspicuous notice” of the company’s terms of service when they created online accounts to purchase the watches. … Continue Reading