Master Class--Arbitration Clauses

Abstract

Commentary and analysis of the effects of arbitration clauses on plaintiffs’ ability to proceed with a class action. This article addresses various issues in this emerging problem in class litigation. Can an arbitration clause defeat the ability of a plaintiff to pursue class litigation? In recent years, numerous courts have ruled on issues relating to arbitration clauses in relation to class actions. Because courts overwhelmingly enforce arbitration clauses in derogation of plaintiffs’ ability to pursue classwide relief, arbitration clauses have become a lightning rod for dispute. This article discusses problems involved when an arbitration provision exists and a plaintiff files a class action. What statutory provisions, if any, govern arbitration clauses and class action litigation? How have courts analyzed whether an arbitration clause may be applied in derogation of class litigation? The article discusses the role of the Federal Arbitration Act (F. A. A.), the Uniform Arbitration Act, and the National Conference of Commissioners on Uniform State Laws, Uniform Arbitration Act with regard to arbitration and class litigation. Also noted are the Supreme Court decisions in Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) and Green Tree Financial Corp. v. Randolph (2000), addressing arbitration provisions, as well as other lower federal court decisions dealing with the interrelationship of arbitration clauses to class action litigation.