2013 has not been a kind year for consumers looking to bring class action filings against large corporations. Traditionally, these suits are the only way for individual consumers and smaller companies to recover losses or damages from much larger companies, but as of June, class action plaintiffs have lost all but one Supreme Court case filed against corporations.
Could this trend point to of tough times ahead for class action lawsuits, or a decidedly more pro-corporate Supreme Court? InsideCounsel will be digging further into those questions on Oct. 16 in the webcast, “Navigating Through The Supreme Court Decisions On Class Action.”
Sponsored by Bloomberg Law, speakers will include Lloyd M. Johnson Jr., Publisher and Community Leader at Inside Counsel and Stacey Slaughter, partner at Robins Kaplan Miller & Ciresi L.L.P.
Recently, IC caught up with Slaughter to discuss some of the trends she’s noticed in the space, and give a preview of the Oct. 16 dicussion..
IC: Is there a reason why the U.S. Supreme Court has more consistently ruled in favor of large corporations?
SS: There is a strong perception that the Supreme Court has ruled in favor of large corporations. The explanation may stem from the Court’s strict application of the Federal Arbitration Act. The Court has been very deferential to arbitration, and the trend has been to enforce arbitration clauses. Moreover, a court’s scope of review under the FAA is very limited. Often, enforcement of a mandatory arbitration clause benefits large companies who typically want to enforce such provisions. However, the application of these principles benefits plaintiffs as well. For example, in Oxford Health Plans v. Sutter, decided by the Supreme Court in June this year, it was the plaintiff who sought to enforce the arbitrator’s interpretation that the parties’ arbitration clause authorized class arbitration, and the Supreme Court upheld the arbitrator’s decision.
IC: What recent rulings are the most important for legal departments to be aware of?
SS: Legal departments who deal with consumers or engage in business-to-business relationships that are governed by arbitration agreements should certainly review the Supreme Court decisions American Express Co. v. Italian Colors Restaurant (2013) and AT&T Mobility LLC v. Concepcion (2011), which was noted by the majority in the American Express case. Counsel would be wise to review the additional cases cited in Justice Kagan’s dissent in American Express. Legal departments should also be aware of the exclusive forum provision cases gaining ground across the country, such as Boilermakers Local 154 Retirement Fund, et al. v. Chevron, et al. (Delaware Chancery Court June 25, 2013). Although they are not Supreme Court cases, these cases demonstrate a legal trend that many companies are beginning to consider in order to limit exposure to multi-jurisdictional litigation.
IC: What do these rulings mean for small businesses and consumers?
SS: Generally, small businesses have been lost in these types of cases, the American Express case being the most recent example. Consumers should be aware of what arbitration means, what rights they have, and what rights they are giving up. Some small business and consumers may have the option to “opt out” of arbitration, or the opportunity to negotiate a different arbitration clause, so should seek advice when possible. Finally, the Supreme Court has noted in many rulings that the FAA was enacted by Congress and Congress may—at any point—speak out on arbitration. In fact, some in Congress have voiced a concern about case law trends. The FAA is a law that can be changed. Interested parties might consider working legislatively to address their concerns.
IC: Can you briefly describe the types of strategies that businesses should be using in light of these new rulings?
SS: In light of recent rulings, many companies will want to seek outside counsel to review their arbitration clauses. Publicly-traded companies may also want to follow the Boilermakers case, as many companies might consider whether to adopt exclusive forum provisions in the by-laws.
Slaughter will be going into each of these questions further during her conversation on Oct. 16. Those interested can register for the event here.