State Limitations on Arbitration with Class Action Waivers Again Before Supreme Court
The latest of a line of recent cases in which the U.S. Supreme Court has weighed the enforceability of class action waivers in arbitration agreements was before the court on Oct. 6, 2015, when the court heard oral argument in DirecTV, Inc. v. Imburgia, et al., No. 14-462, reports James A. McKenna of Jackson Lewis.
“These decisions almost uniformly have favored arbitration, and many employers have adopted and successfully utilized arbitration agreements containing class action waivers,” he explains.
DirecTV’s customers signed agreements requiring claims relating to the agreement or to the company’s service to be decided by binding arbitration on an individual basis. “Arbitration on a class basis was specifically prohibited. At the time Amy Imburgia signed the agreement, the controlling California law was the “Discover Bank rule” announced by the California Supreme Court in 2005. Under the Discover Bank rule, almost all consumer arbitration agreements containing class action waivers were deemed unconconscionable and, therefore, unenforceable,” according to the article.
