Many companies use browsewrap or related sign-in agreements to present their terms of service for consumer acceptance. On April 5, 2022, the U.S. Court of Appeals for the Ninth Circuit refined the standard for enforcing terms of service presented on websites via hyperlinks. The decision affects how companies should design their webpages and present their
Court Holds That Subway’s “Cluttered” Website Inhibits Ability to Compel Arbitration
The Second Circuit recently affirmed a district court decision denying enforcement of an arbitration clause because it found that Subway’s website was “cluttered” and that the terms and conditions were not clear and conspicuous. The decision emphasizes that terms and conditions must be easily located.
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The Ninth Circuit Ratifies California’s McGill Rule: Consumers Cannot Waive Statutory Rights to Seek a Public Injunction via Arbitration Agreement
On June 28, the Ninth Circuit adopted the California Supreme Court’s McGill rule in Blair v. Rent-a-Center, Inc., 928 F.3d 819 (9th Cir. 2019). In Blair, the Ninth Circuit held the McGill rule to be consistent with the Federal Arbitration Act (“FAA”), and therefore not preempted by the federal statute.
The McGill rule was the result of a decision by the California Supreme Court in which it held that a consumer credit card agreement waiving the consumer’s right to seek public injunctive relief violated California Civil Code § 3513. Section 3513 provides that “a law established for a public reason cannot be contravened by a private agreement.” Blair, 928 F.3d at 824. Several California consumer protection statutes explicitly provide consumers with the right to pursue a public injunctive remedy.
Continue Reading The Ninth Circuit Ratifies California’s McGill Rule: Consumers Cannot Waive Statutory Rights to Seek a Public Injunction via Arbitration Agreement
Supreme Court’s Denial of Spirit Airline’s Petition for Review Leaves Uncertainty about Whether Court or Arbitrator Determines Whether Class Arbitration Is Available
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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J.C. Penney Loses Bid to Compel Arbitration in Class Action Stemming from an In-Store Transaction
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…
California Federal Court Rescinds Order Compelling Arbitration in Consumer Class Action Because Arbitration Agreement Prohibited Public Injunctive Relief
Arbitration Poison Pill Spells Doom for AT&T’s Arbitration Hopes
- 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.
- 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.
- Parties may agree to arbitrate claims for public injunctive relief, but they cannot agree to waive consumers’ right to assert those claims at all.
- 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.
Continue Reading California Federal Court Rescinds Order Compelling Arbitration in Consumer Class Action Because Arbitration Agreement Prohibited Public Injunctive Relief