In Oxford Health Plans v Sutter, the U.S. Supreme Court ruled that an arbitrator has the power to interpret an arbitration clause and unless the agreement states otherwise, the arbitrator can construe the clause to permit class arbitrations. The case was brought in state court by a physician who alleged that the health plan had failed to fully and promptly pay him and other physicians. The health plan moved to compel arbitration which the state court ordered. The arbitrator then construed the arbitration clause to permit class arbitration. The health plan then filed in federal court a motion to vacate the arbitration order asserting that the arbitrator exceeded his authority. The district court denied the motion and the Third Circuit affirmed. The unanimous Supreme Court ruling holds that arbitrators have the power to construe arbitration clauses as permitting class arbitration. The decision thus clears the way for cases to proceed as class arbitrations.
Class Actions Blog
Posts Tagged ‘Mandatory Arbitration’
Supreme Court ruling in Oxford Health Plans v. Sutter allows class arbitration to proceed
Schwab gives up on class action waiver
Charles Schwab Corp. (SCHW) has reversed course on a requirement that customers must waive their right to participate in class action lawsuits against the company.
On its website, the San Francisco discount brokerage said it’s “modifying its account agreements to eliminate the existing class action lawsuit waiver for disputes” related to events that occur on or after May 15 and “for the foreseeable future.”
Schwab initially added the class action waiver provision in September 2011. The provision requires that all disputes between Schwab and its customers be hashed out in arbitration. Read more…
Public Justice speaks out about mandatory arbitration
Click here to read an article on the Public Justice website about a class action case against payday lenders which shows just how devastating the Concepcion case has been in regard to protecting consumer rights.
SEC Commissioner Aguilar urges end to mandatory arbitration clauses in brokerage agreements
Arbitration is usually the only method for clients to seek compensation for wrongs committed by their brokers and financial advisors. Mandatory arbitration clauses are included in virtually all account-opening brokerage agreements. Their effect is to deny clients their day in court. Instead of a judge and jury determining the legal nuances and merits of complaints, arbitration forces clients to go before arbitrators that work for an organization. In the case of broker dealers that organization is Financial Industry Regulatory Authority (FINRA). Read more…
Second Circuit squelches Title VII exception to mandatory arbitration
The 2nd Circuit Court of Appeals has been known on occasion to buck the judicial trend of sending class actions to arbitration and instead, champion plaintiffs’ rights to class action litigation. In a decision issued on March 21, 2013, in a sex discrimination case against Goldman Sachs, a three-judge appellate panel reversed a lower-court ruling that former Goldman managing director Lisa Parisi may pursue a class action despite the mandatory arbitration clause in her employment contract. The appeals court agreed with just about every argument by Goldman’s lawyers ruling that the bank’s arbitration clause does not preclude Parisi’s statutory rights under Title VII of the Civil Rights Act. Read more…
Massachusetts Secretary of Commonwealth says new FINRA rule re class actions gives brokers green light to steal
A recent change to Charles Schwab Corp. fine print keeps customers from joining class action lawsuits, and all regulators can do is beg the brokerage not to make the change. Massachusetts Secretary of the Commonwealth, William F. Galvin, is urging Charles Schwab to reconsider the decision, and today sent a “rebuke” to Schwab, and a plea to investors to “vehemently object to any change in their rights to participate in class actions.”
Schwab’s new customer arbitration agreement requires customers to waive the right to bring or join civil class action lawsuits against the firm. Recently, the Financial Industry Regulatory Authority (FINRA) ruled Schwab had violated rules prohibiting firms from preventing customers from civil class actions. However, FINRA also said it was powerless to enforce its longstanding rule because it conflicts with the Federal Arbitration Act. Read more…
