The Supreme Court has made clear that although arbitral awards are subject to extremely limited review,1 a class and collective action waiver provision in an otherwise enforceable arbitration agreement is likely to be upheld. In 2011, in AT&T Mobility v. Concepcion,2 the U.S. Supreme Court invalidated as preempted by the Federal Arbitration Act3 (FAA) California decisional law treating certain class arbitration waivers as unconscionable because the state law impermissibly conditioned enforcement of an otherwise valid arbitration agreement on the company’s submission to a class-wide arbitration proceeding. The next year, the Supreme Court decided CompuCredit v. Greenwood,4 which held that arbitration agreements in the context of the Credit Repair Organizations Act5 could be enforced despite “right to sue” language in that statute.
Most recently, in American Express v. Italian Colors Restaurant6 (Amex IV), the Supreme Court rejected a Second Circuit panel decision holding that arbitration of an antitrust claim could not be compelled because the claimant could not “effectively vindicate” its claim except on a class action basis. The Supreme Court explained that the “effective-vindication” doctrine was limited to express limits on statutory remedies in the agreement or costs unique to arbitration. Specifically, Amex IV held that the high cost to a plaintiff of bringing an arbitration on an individual basis (as opposed to a class or a collective basis) was the same whether the case was brought in litigation or arbitration, and hence did not present a cost barrier unique to arbitration.
