David Eisenberg was a contributing commentator to a Law 360 article on the significance of the U.S. Supreme Court’s decision in American Express Co. et al. v. Italian Colors Restaurant, regarding the issue of class action arbitration waiver. Comments from David and attorneys across the country were included in the online publication on June 20, 2013 under the title “Attorneys React to High Court’s Arbitration Ruling.” In the article, David opined as follows:
“This is a milestone in the law of class actions. Justice Scalia, writing for the Court’s 5-3 majority, succinctly stated the issue as “whether a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.” The answer: Yes.
The Court held that arbitration agreements are binding contracts that the courts must rigorously enforce, with only two exceptions: first, if the applicable statute commands the rejection of a class arbitration waiver; second, if the waiver provision would prevent the “effective vindication” of a statutory right. The latter could occur if the waiver clause forbade the assertion of statutory rights; and “perhaps” if filing and administrative fees were so high as to make access to the forum impracticable.
This decision is likely to have a substantial impact on commercial agreements, consumer agreements, and employer-employee agreements, and how disputes are resolved under those agreements.”
Additional attorney comments are available to Law360 subscribers.