3 ms·
Lawyer here. Some of those cases are about the NLRB's authority, not anything else. I didn't look up all of them. Past that so, as far as i know, attempting to
by DannyBee 9y ago
Lawyer here.
Some of those cases are about the NLRB's authority, not anything else. I didn't look up all of them.
Past that so, as far as i know, attempting to waive class arbitration is untested against an explicit state policy, and i have doubts it would survive.
The only case about this so far is whether class action arbitration waivers are enforceable in general in the face of it being "too expensive" to arbitrate individually (no state law, etc, was at issue here), and the answer is "yes, they are enforceable". This is not surprising, these kinds of straight policy arguments rarely are winners in court. A state law would instead be a preemption issue.
It's one thing to say "you must arbitrate", which is clearly covered by the Federal Arbitration Act. That is why state laws that attempt to ban such clauses are preempted.
However, there is nothing that i'm aware in that act (though admittedly, it's been a while since i looked at the act), that preempts state laws prescribing the form of arbitration.
Thus, a state law saying "arbitration is awesome, but banning class arbitration is against our public policy", if they exist, should be valid. Preemption must be very clear.
Again, it's been a while, but when they were first preempted, states mostly did not have such laws on the books (IE they found required arbitration to be against public policy, and that was preempted by the FAA. They did not have laws that said that banning class arbitration to be against public policy)
Of course, if someone knows of a part of the FAA that explicitly allows prescribing the form of arbitration, then yeah, everyone is gonna lose.
Funny story: most of the places that pushed so hard for required arbitration had clearly not thought through the consequences. They still haven't, AFAICT.
I remember having lunch with one of the counsel at EBay and some other companies about a year after the original supreme court ruling on class actions, and he was very happy they could require arbitration (they got a lot of nuisance suits, to be fair to them), and asked me why Google didn't require arbitration (Note: I'm not legal counsel for Google, i haven't been involved in Google's TOS in years, blah blah blah)
I pointed out that class action/courts generally at least required a licensed lawyer to maintain and work on the suit, which was expensive, whereas arbitration could be done by lay people, and that he was essentially betting that nobody could make it cost effective to have a paralegal or someone manage fifty arbitrations at once, or a class arbitration.
I suggested that was probably a bad bet.
I still believe it to be a bad bet.
(It hasn't changed a lot because the other side of this is still fighting to the death instead of considering new business models. They are very much not used to dealing in volume)
- pktgen 9y ago> Thus, a state law saying "arbitration is awesome, but banning class arbitration is against our public policy", if they exist, should be valid. Preemption must be very clear. Concepcion seems to make it very clear that such a rule would be preempted by the FAA. The nonsensical reasoning in Concepcion applies just the same if the rule invalidates class waivers specifically (that is, permits the arbitration agreement to be enforced but strikes only the part prohibiting class actions, which would result in arbitration proceeding on a class basis) as it does if the rule invalidates the entire arbitration agreement (as the CA Supreme Court rule did).
- DannyBee 9y ago"Concepcion seems to make it very clear that such a rule would be preempted by the FAA. " I've read it forward and backwards and i don't see it. "The nonsensical reasoning in Concepcion applies just the same if the rule invalidates class waivers specifically (that is, permits the arbitration agreement to be enforced but strikes only the part prohibiting class actions, which would result in arbitration proceeding on a class basis) as it does if the rule invalidates the entire arbitration agreement (as the CA Supreme Court rule did)." Again, i'm going to disagree. There is a huge difference between proscribing action and proscribing form of action, and Conception's reasoning seems pretty wholly inapplicable to the latter, only the former. It also does not, in any way, deal with the preemption issue that would occur, and every case i can find on the other side of this seems to say they would allow states to constrain the form. The court reasoned that the purpose of the FAA was "'not [to] mandate the arbitration of all claims, but merely the enforcement . . . of privately negotiated arbitration agreements.'"Id. at 70 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 470 U. S. 219 (1985)). While the FAA therefore preempts application of state laws which render arbitration agreements unenforceable, "[i]t does not follow, however, that the federal law has preclusive effect in a case where the parties have chosen in their [arbitration] agreement to abide by state rules."" ... Unlike its federal counterpart, the California Arbitration Act, Cal.Civ.Proc.Code Ann. § 1280 et seq. (West 1982), contains a provision allowing a court to stay arbitration pending resolution of related litigation. We hold that application of the California statute is not preempted by the Federal Arbitration Act (FAA or Act), 9 U.S.C. § 1 et seq., in a case where the parties have agreed that their arbitration agreement will be governed by the law of California. See Volt Inf. Sciences v. Stanford Univ., 489 U.S. 468 (1989) Where california's "form of arbitration" requirements were specifically affirmed.