Arbitration, Class Waivers, and Statutory Rights

By Spencer, Jacob | Harvard Journal of Law & Public Policy, Summer 2012 | Go to article overview

Arbitration, Class Waivers, and Statutory Rights


Spencer, Jacob, Harvard Journal of Law & Public Policy


Congress passed the Federal Arbitration Act (FAA) in 1925 to counter widespread judicial refusal to enforce arbitration agreements. (1) The courts were not necessarily hostile to arbitration of driven by ideology. Often, they considered themselves bound by longstanding anti-arbitration precedent, which would need to be overturned legislatively. (2) Last year, in AT&T Mobility LLC v. Concepcion, the Supreme Court held that the FAA prohibited states from refusing to enforce arbitration agreements merely because they did not allow class arbitration procedures. (3) In the past year, dozens of courts have enforced arbitration agreements containing class waivers. (4) Nonetheless, an administrative body and a growing handful of courts have struck down arbitration agreements, finding them unenforceable where they contained a waiver purporting to prevent the signatory from bringing class proceedings either in arbitration of in court. In particular, many of these courts have reasoned that arbitration agreements with class waivers are unenforceable where they would effectively prevent plaintiffs from vindicating their statutory rights.

These lower courts have refused to enforce arbitration agreements based on their reading of Supreme Court precedent. In several cases, the Court held that federal statutory claims were subject to arbitration so long as federal substantive remedies were available in the arbitral forum. (5) In another case, the Court held that the plaintiff had the burden of proving that prohibitively expensive arbitration-specific costs would prevent her from vindicating her federal statutory rights. (6) But the Court has never struck down an agreement for interfering with a plaintiff's statutory rights, nor has it clarified what sort of arbitration agreement would meet that standard. This Note describes when, if ever, class waivers render otherwise valid arbitration agreements unenforceable because they would prevent plaintiffs from effectively vindicating their statutory rights.

Part I describes the doctrinal framework established by the Court in Concepcion, Green Tree, and Mitsubishi Motors. Part II argues that claims that class action waivers nullify state statutory rights cannot invalidate arbitration agreements after Concepcion. Part III considers several different arguments that class waivers undermine federal statutory rights in certain contexts. It argues that, although most such arguments should fail after Concepcion, there are two that might succeed. First, some federal statutes might establish a substantive right to class proceedings. Second, there is a difficult issue of whether proof that class proceedings are the only economically feasible means of vindicating statutory rights should invalidate an arbitration agreement. Even here, any exception to Concepcion is narrow and likely to become narrower still. Finally, this Note concludes that a very narrow subset, at most, of arbitration agreements undermine statutory rights merely by waiving class proceedings.

I. DOCTRINAL FRAMEWORK

The FAA mandates that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." (7) The Act embodies a "liberal federal policy favoring arbitration," (8) and requires courts to "place arbitration agreements on an equal footing with other contracts...." (9) The Act's saving clause instructs courts to invalidate arbitration agreements for the same reasons--fraud, duress, or unconscionability--as they would any other contract but forbids them to invalidate arbitration agreements based on reasons "that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue." (10) In Concepcion, the Supreme Court held that the FAA preempted California's Discover Bank rule, which conditioned the enforceability of most arbitration agreements on the availability of class procedures. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Arbitration, Class Waivers, and Statutory Rights
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.