The U.S. Supreme Court held in a 6-3 ruling that states laws hostile to class action waivers cannot circumvent the Federal Arbitration Act.
Aton Arbisser, Antitrust partner and Chair of Kaye Scholer’s Los Angeles office Litigation Department, notes the significance of the DirecTV decision for Law360:
"Today’s decision underscores that the Supreme Court continues on its strong, pro-arbitration path regardless of the skepticism of state courts. The majority recognized, however, that state courts can invalidate class action waivers if they can find a ground applicable to contracts generally. For businesses, the takeaway is simple. Use class action waivers in your arbitration clauses and avoid raising red flags. Document the acceptance of your terms. For online purchases, have the consumer check a separate box adopting the seller's terms. Don’t hide the arbitration clause in the contract. Don’t slant the arbitration clause to favor the business. E.g., don’t have the clause impose undue costs on the consumer and do not slant any right to appeal to favor the business."
Also of Interest
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- Kaye Scholer Secures Dismissal of Merger-Related Class Action Against Baltic Trading September 1, 2016 • Client Successes
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- Delaware Court Endorses Share Tracing in Order to Deny Appraisal Claims in Dell Merger August 24, 2016 • Articles