MVA Litigation Blog

This year important questions regarding the viability of class action waivers in arbitration agreements have moved close to resolution. In July, the Consumer Financial Protection Bureau (CFPB) issued a long-awaited final rule that prohibited class waivers in arbitration agreements related to a broad range of financial products. And employees and the National Labor Relations Board (NLRB) have continued to push against the enforceability of class waivers in the context of individual employment agreements, driving the issue to the U.S. Supreme Court for review. On November 1 ...

The Consumer Financial Protection Bureau (“CFPB”) made clear this week that, in its view, class action waivers should be on the chopping block in the agency’s upcoming rulemaking aimed at regulating the use of arbitration clauses in consumer financial agreements.  In an October 7, 2015 release, CFPB Director Cordray expressed the agency’s critical stance on companies’ use of arbitration agreements that prohibit consumers from participating in class actions, calling such clauses a “free pass to sidestep the courts and avoid accountability for wrongdoing,” while ...

On Tuesday, the Consumer Financial Protection Bureau ("CFPB") released its long-awaited "Arbitration Study: Report to Congress, pursuant to Dodd–Frank Wall Street Reform and Consumer Protection Act § 1028(a)", which presents the results of the agency’s study of the use of arbitration agreements in the context of consumer finance agreements for credit cards, checking accounts, payday and other small dollar loans, general purpose reloadable prepaid cards, private student loans, auto purchase loans, and mobile wireless agreements.  The 728-page study is extensive, to ...

The Eleventh Circuit in Walthour v. Chipio Windshield Repair, LLC, No. 13-11309 (11th Cir. March 21, 2014) recently joined the Second, Fourth, Fifth, and Eighth Circuits in upholding class arbitration waivers in a Fair Labor Standards Act (“FLSA”) action.  Plaintiffs in Walthour argued that the statutory right to file a collective action under the FLSA cannot be waived, as it is a substantive right.  Plaintiffs pointed to the statute’s text, legislative history and purposes to support their position that the FLSA’s right to collective action trumps the Federal ...

The North Carolina Court of Appeals recently declared the enforceability of class arbitration waivers despite the North Carolina Supreme Court’s previous decision in Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E.2d 362 (2008), which invalidated an arbitration agreement based, in part, on a class arbitration waiver.  In companion cases, Torrence v. Nationwide Budget Finance, et. al., No. 05- CVS 447 (N.C. Ct. App. Feb. 4, 2014) and Knox v. First Southern Cash Advance, et.al., No. 05-CVS-445 (N.C. Ct. App. Feb. 4, 2014)**, plaintiffs had secured class ...

            The Fifth Circuit Court of Appeals recently rendered its long-awaited decision in D.R. Horton, Inc. v. NLRB, No. 12-60031 (5^th Cir.  Dec. 3, 2013), revised December 4, 2013, which reversed the National Labor Relations Board (“NLRB”) ruling that held a class arbitration waiver contained in an arbitration provisions of individual employment contracts violated the rights of employees under the National Labor Relations Act (“NLRA”) to engage in concerted activities.  The NLRB issued its decision in D. R. Horton, Inc. and Michael Cuda, Case 12–CA–25764, 357 NLRB No. 184 ...

            The viability of class arbitration waivers as a means for companies to limit their exposure to class actions continues to be tested, including in the employment arena.  One of the first cases to probe the enforceability of class arbitration waivers in employment agreements after AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) was Raniere, et al. v. Citigroup Inc. filed in the Second Circuit.  Raniere, et al. v. Citigroup Inc., 827 F. Supp. 2d 294 (S.D.N.Y. 2011) was decided by the District Court on November 22, 2011 and appealed to the Second Circuit Court of Appeals on December 19 ...

            The U.S. Supreme Court’s decision in AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011) has been the cornerstone of recent jurisprudence validating the use of class arbitration waivers in arbitration agreements to insulate companies from exposure to class action litigation.  Concepcion also has served to bolster the overall strength of arbitration agreements and to illuminate the scope of the preemptive power of the Federal Arbitration Act (“FAA”).  The recent decision by the Ninth Circuit Court of Appeals in Mortensen v. Bresnan Comm’n, LLC, No. 11-35823, 2013 U.S. App ...

            The Supreme Court’s October 2012 Term could rightly be named “The Year of the Class Action.”  The High Court received many petitions for review and ultimately issued more than five decisions that tackled issues impacting the landscape of class action practice from questions regarding federal jurisdiction under the Class Action Fairness Act of 2005 to class certification requirements in fraud-on-the-market securities class actions.  Two of the Court’s final class action decisions addressed the impact of arbitration agreements on class actions and class arbitration ...

            In our November, 2012 series, “Once Around the Dance Floor With a Public Injunction, the Vindication of State Rights and AT&T Mobility v. Concepcion,” we discussed the potential impact of the impending Ninth Circuit Court of Appeals en banc review of Kilgore v. Keybank Nat’l Ass’n, No. 3:08-CV-02958-THE (N.D.Cal.). (See posts here, here, and here). In the initial appellate review of Kilgore, a Ninth Circuit three-judge panel held that California’s Broughton-Cruz rule that prohibits the arbitration of public injunction claims was preempted by the Federal Arbitration ...

            The Fourth Circuit Court of Appeals recently issued a decision placing the AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (2011) stamp of approval on class arbitration waivers in this Circuit.  In Muriithi v. Shuttle Express, Inc., No. 11-1445, 2013 U.S. App. LEXIS 6464 (4th Cir. Apr. 1, 2013), the Fourth Circuit took on several issues surrounding class arbitration waivers that have been the source of disagreement among lower courts since Concepcion.  The Shuttle Express plaintiff was a shuttle driver for defendant Shuttle Express, a company that provides transportation for ...

            The line-up of class action cases to be reviewed and ruled upon by the U.S. Supreme Court this year is stacked with heavy hitters.  On the same day that the Court issued its opinion in the Amgen securities fraud class action case (covered in last week's post), the Court heard oral arguments in American Express Co., et al. v. Italian Colors Restaurant, et al., (S.Ct. No. 12-133).  Amex is the first Supreme Court class arbitration waiver case that explores the impact of AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011) on federal claims.  The putative class plaintiffs are corporations and a ...

            Arbitration under the Federal Arbitration Act (“FAA”) has been the hot topic of many cases in the past few years, with the U.S. Supreme Court having reaffirmed the federal policy favoring arbitration and the preemptive power of the FAA over state laws governing arbitration.  The North Carolina courts are among those that have been petitioned to resolve conflicts regarding the enforceability of arbitration agreements, and the North Carolina Court of Appeals recently issued another arbitration decision that should be of interest to businesses facing disputes in this state.  The ...