Arbitration – U.S. Supreme Court Case

A recent update (“Supreme Court Again Confirms That Class Action Arbitration Waivers Are Valid”) at Business Law Today, a publication from the American Bar Association, stated that, “In DIRECTV, Inc. v. Imburgia, No. 14-462 (Dec. 14, 2015), the U.S. Supreme Court faced yet another case involving the arbitration of consumer disputes. The court in DIRECTV held that a class action waiver contained in an arbitration clause of the contract was valid, even though the contract incorporated state law standards that would have voided the waiver at the time the contract was entered into. The decision continues the court’s trend toward enforcement of arbitration clauses, including those containing a waiver of class action proceedings in arbitration. See, e.g., AT&T Mobility LLC v. Conception, 563 U.S. 333 (2011); American Express Corp. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013).”

The article added that, “Key to the issue ultimately before the Supreme Court, the contract further provided that if the ‘law of your state‘ makes waiver of class arbitration unenforceable, the entire arbitration clause would be voided and any dispute would have to be resolved in court.”

The Business Law Today article went on to point out that, “While DIRECTV arose in a somewhat unique context, the decision is important because it reflects the Supreme Court’s continued adherence to enforcing arbitration clauses as written.”

The New York Times recently published a three part series highlighting how arbitration clauses “have crept into nearly every corner of Americans’ lives.”

The enforceability of arbitration clauses will likely be an issue that continues to garner legal attention.

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