Part one of this article looked at the reasons for and against class action lawsuits and arbitration in legal cases. It found that arbitration agreements are usually upheld, but there are exceptions for cases with very small amounts of money at stake. Part two will look at more cases where waivers were upheld, how courts decide if class action lawsuits are allowed, and give some tips for dealing with class action issues in arbitration agreements. In some court cases, class action waivers in arbitration agreements have been enforced. For example, in Livingston v. Johnson, the court enforced an arbitration agreement in a case alleging violation of The Truth in Lending Act, despite the plaintiff’s argument that they wouldn’t get full relief. In Fonte v. AT&T Wireless Services, the court found that the unavailability of class actions did not defeat the remedial purposes of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). Additionally, the Fourth Circuit found in Snowden v. Check Point Check Cashing that a clause in an arbitration contract barring class arbitration was not unconscionable.
On the other hand, in cases such as Randolph v. Green Tree Financial Corp. and Jenkins v. First American Cash Advance of Georgia, the courts held that a TILA arbitration could not proceed as a class action in the absence of a provision in the arbitration agreement allowing for class arbitration. Similarly, in Caley v. Gulfstream Aerospace Corp., the 11th Circuit found an arbitration agreement waiver of the right to bring a class action to be enforceable.
In some cases, class action arbitration is not authorized by the arbitration agreement, such as in Discover Bank v. Superior Court of Los Angeles. In such cases, courts have declined to allow arbitrations to proceed as class actions in the absence of a provision in the arbitration agreement authorizing class arbitration. Johnson sued West Suburban Bank for violating consumer protection laws, seeking to bring a class action lawsuit. The court ruled that the arbitration agreement did not specifically allow for class actions, so class arbitration was not allowed. The court also said that forcing arbitration did not go against the goal of the consumer protection laws, and that other government agencies could enforce the laws. Other courts have made similar decisions, saying that class arbitration can only happen if the agreement specifically allows for it. The agreement between the parties didn’t say anything about doing arbitration as a group. So, the court can’t make them do it that way. Also, if the parties don’t want their arbitration cases combined, they don’t have to agree to it in their arbitration agreement. The court has to make sure the parties follow the rules they agreed to in their arbitration agreement. The United Kingdom wanted to combine two separate arbitration cases against Boeing and Textron, but the court said no because neither company agreed to it. In another case, a hospital and its construction company and architect had separate arbitration agreements, so they didn’t have to combine their cases. In a different case, a company wanted to combine multiple arbitration cases, but the court said no because the arbitration agreements didn’t allow it. However, in another case, the court did allow arbitration cases to be combined because of a state law rule. If you want to include an arbitration clause in your contract, make sure it’s clear whether class-wide arbitrations are allowed or not. It’s a good idea to choose a state law that supports your views and has a connection to the transaction. Most of the time, the terms of the contract won’t be negotiable, so make sure the other party fully understands the terms. Also, think about what might make the contract unfair. For example, if it’s really hard for the other party to understand or if it’s just not fair. The court made a decision based on previous court rulings and laws, allowing for the enforcement of a class action waiver in arbitration agreements. However, in a separate case, the 11th Circuit ruled against a class action waiver, stating that it should be determined on a case-by-case basis. This decision was based on the specific law under which the action was brought and the inability to bring an individual action. This shows that the enforceability of class action waivers can vary depending on the circumstances. Donald J. Spero is a lawyer who has worked in labor and employment law for over 30 years. He now works as a mediator and arbitrator, helping to resolve disputes. He is certified in labor and employment law and is part of arbitration panels for two organizations.
This information is from a column submitted by the Labor and Employment Law Section. The section chair is Alan O. Forst and the editor is Frank E. Brown.
The information is from a legal publication and is aimed at lawyers who are part of the Labor and Employment Law Section to provide them with useful information.
Source: https://www.floridabar.org/the-florida-bar-journal/availability-of-class-actions-in-arbitration-part-2/
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