Cour Strikes Class Action Ban in Arbitration Agreement
Written by Mark J. Astarita, Esq. on Friday, May 29, 2009Class action bans in arbitration agreements have always been a cause for concern, and I have always taken the position that such bans are illegal. While some clever attorney had the idea to jam that sentence into an arbitration agreement, the ban has nothing to do with arbitration, and is in reality a complete ban on anytype of dispute resolution in some circumstances.
The reality is that there is nothing to get in an uproar about, since the bans are illegal. The latest decision striking the class action ban was yesterday, in the Federal District Court in Seattle, when the court refused to enforce ATT's ban on its customer's participation in class actions.
Class action by ex-AT&T Wireless customers allowed
The reality is that there is nothing to get in an uproar about, since the bans are illegal. The latest decision striking the class action ban was yesterday, in the Federal District Court in Seattle, when the court refused to enforce ATT's ban on its customer's participation in class actions.
Class action by ex-AT&T Wireless customers allowed
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2 comments: Responses to “ Cour Strikes Class Action Ban in Arbitration Agreement ”
By Edward Wiest on Friday, 29 May, 2009
IMHO, the only place in consumer/customer arbitration in which a class action ban should be found is in forum rules, such as current FINRA Rule 12204(a). Of course, such a rule opens the door to judicial class actions of claims within the arbitration agreement--as FINRA rules recognize through a provision that claimants who are members of a plaintiff class must opt out of the class action to pursue individual claims in arbitration. See Rule 12204(b). The effect--in my view, properly--is to permit class actions to go forward in the courts if appropriate, rather than using a "no class action" provision in the arbitration agreement as a means of barring any class actions whatsoever.
By Mark J. Astarita, Esq. on Monday, 01 June, 2009
I agree, but we are talking about two different class action waivers. I was referencing the waiver that is contained in some arbitration agreements, where the consumer purports to waive his right to participate in a class action. I highly doubt that such waviers will stand up to judicial scrutiny.
Your reference is to the ban on class actions in arbitration, which makes perfect sense. FINRA has such a ban in its rules. Arbitration is not designed to resolve claims by thousands of plaintiffs in one case, and the arbitration forums should not accept such cases.