The U.S. Supreme Court denied a petition for writ of certiorari filed by Spirit Airlines Inc. in Spirit Airlines Inc. v. Steven Maizes et al., which sought review of the Eleventh Circuit’s decision that when an arbitration agreement cites the American Arbitration Association (“AAA”) rules but is otherwise silent on the issue of who determines class arbitrability, the arbitrator, not the court, should determine whether the arbitration clause allows for class proceedings.
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Because pricing discount and sales class actions are likely to continue and retailers, especially brick-and-mortar ones, may have difficulty enforcing arbitration agreements and class action waivers, companies will want to not only check the ways in which they draft and enforce arbitration agreements, but carefully monitor compliance with pricing laws.

The Tenth Circuit recently affirmed

Arbitration Poison Pill Spells Doom for AT&T’s Arbitration Hopes

Takeaways:

  1. California Supreme Court recently held that an arbitration agreement that waives the right to seek public injunctive relief regardless of forum is (1) contrary to public policy and (2) not preempted by the Federal Arbitration Act.
  2. District Court for the Northern District of California granted a motion to reconsider its earlier order compelling arbitration of putative class action because the arbitration agreement at issue waived consumers’ right to seek public injunctive relief and was, by its terms, not severable from the remainder of the arbitration agreement.
  3. Parties may agree to arbitrate claims for public injunctive relief, but they cannot agree to waive consumers’ right to assert those claims at all.
  4. Drafters of arbitration agreements should reconsider poison-pill provisions that invalidate the entirety of the arbitration agreement if only the portion addressing injunctive relief is unenforceable.


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