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AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), is a legal dispute that was decided by the United States Supreme Court. [1] [2] On April 27, 2011, the Court ruled, by a 5–4 margin, that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-wide arbitration, such as the law previously upheld by the California Supreme Court in the case of ...
Discover Bank v. Superior Court (30 Cal.Rptr.3d 76) is a 2005 case where the California Supreme Court ruled that an arbitration clause was unenforceable because a class-action waiver contained within it would exculpate Discover Bank from liability for wrongdoing involving small sums of damages.
In contract law, an arbitration clause is a clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always binds the parties to a type of resolution outside the courts, and is therefore considered a kind of forum selection clause.
Disputes between consumers and businesses that are arbitrated are resolved by an independent neutral arbitrator rather than in court. Although parties can agree to arbitrate a particular dispute after it arises or may agree that the award is non-binding, most consumer arbitrations occur pursuant to a pre-dispute arbitration clause where the arbitrator's award is binding.
So-called forced arbitration clauses say that in the event of a dispute, you won't be able to file a class-action suit. Instead, your dispute will be settled one-on-one in a private arbitration forum.
Doctor's Associates, Inc. v. Casarotto, 517 U.S. 681 (1996): Montana law requiring disclosure of arbitration clauses to be "typed in underlined capital letters on the first page of the contract" preempted by FAA; [1] however, upheld authority of courts to refuse to enforce arbitration clauses on grounds of "generally applicable contract ...
The Ninth Circuit court determined that the contract's arbitration clause, which precluded class arbitration, was unconscionable under California's Discover Bank rule. The rule allowed for a class action suit "where a party with superior bargaining power was alleged to have cheated large numbers of consumers out of individually small sums of ...
A "naked" class action waiver is a version of the waiver where the contract in which the waiver is found is not attached to an arbitration agreement. Class action waivers are only protected from state legislatures' actions through the Federal Arbitration Act, if they are bundled with an agreement to send disputes to arbitration.