Duane Morris Class Action Review - 2023 - Report - Page 67
CHAPTER 4
Arbitration Issues In Class And Representative Actions
I.
Executive Summary
Enacted in 1925, the Federal Arbitration Act (FAA) was designed to overrule the
judiciary’s longstanding refusal to enforce agreements to arbitrate. The U.S. Supreme
Court has repeatedly supported the enforceability of arbitration agreements under the
FAA, with profound impact on class and representative action litigation.
In recent years, the Supreme Court has held that arbitration agreements requiring
waiver of class and collective actions are enforceable under the FAA and not precluded
by the National Labor Relations Act, and that arbitration on a class-wide basis cannot
be compelled absent unambiguous consent. Epic Systems Corp. v. Lewis, et al., 138 S.
Ct. 1612 (2018); Lamps Plus, Inc. v. Varela, et al., 139 S. Ct. 1407 (2019).
This trend continued in 2022, with the U.S. Supreme Court’s decisions in Viking River
Cruises, Inc. v. Moriana, et al.,142 S.Ct. 1906 (2022), and Southwest Airlines Co. v.
Saxon, et al., 142 S.Ct. 1783 (2022). In Viking River Cruises, the Supreme Court held
the FAA preempted California’s rule barring individual arbitration of PAGA claims. In
Saxon, although the Supreme Court applied the FAA’s transportation exemption to
preclude arbitration, it emphasized that the exemption is to be narrowly construed.
This chapter analyzes these key Supreme Court decisions, and also discusses other
trends in cases involving arbitration agreements in class actions from courts around the
country. Arbitration decisions in 2022 revealed several overarching themes that recur in
the courts’ rulings.
First, how has the Viking River impacted PAGA actions, including the issue of PAGA
standing that will be addressed in the California Supreme Court’s impending decision in
Adolph, et al. v. Uber Technologies, Inc.?
Second, what is the scope of the FAA’s transportation exemption, especially in light of
the U.S. Supreme Court’s decision in Southwest Airlines Co. v. Saxon, et al.?
Third, what constitutes contract formation and assent to an arbitration agreement?
These cases address concerns as to whether the plaintiff assented to the arbitration
agreement that often was presented in some form of clickwrap or similar
online/application use manner. They also address the situation where non-signatories to
arbitration agreements may nevertheless be required to arbitrate their claims.
Fourth, in California, when has the right to arbitration been waived or forfeited due to the
untimely payment of arbitration fees?
Fifth, how do courts view the enforceability of mass arbitration provisions?
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Duane Morris Class Action Review – 2023
