Waiving Rights Goodbye: Class Action Waivers in Arbitration Agreements after Stolt-Nielsen v. Animalfeeds International

33 Pages Posted: 30 Sep 2010 Last revised: 15 Feb 2012

See all articles by Diana Link

Diana Link

affiliation not provided to SSRN

Richard A. Bales

Ohio Northern University - Pettit College of Law

Date Written: September 30, 2010

Abstract

Many arbitration agreements contain clauses that prohibit the parties from bringing class actions in arbitration or in court. The federal courts of appeals are split on whether these class action waivers are enforceable: some courts have held that §2 of the Federal Arbitration Act allows such agreements to be disregarded under basic contract principles, whereas other courts have found that class mechanisms are merely procedural and can be waived in an arbitration agreement. An April 2010 United States Supreme Court case, Stolt-Nielsen v. Animalfeeds International Corp., raised but did not resolve the issue. This article argues that the FAA should be amended or interpreted to provide a “totality of the circumstances” approach in which courts would consider factors such as whether the size of each claimant’s individual recovery would make it difficult or impossible for the claimant to pursue his or her claims on an individualized basis.

Keywords: Arbitration, Class Action, Federal Arbitration Act, FAA, Stolt-Nielsen

Suggested Citation

Link, Diana and Bales, Richard A., Waiving Rights Goodbye: Class Action Waivers in Arbitration Agreements after Stolt-Nielsen v. Animalfeeds International (September 30, 2010). Pepperdine Dispute Resolution Law Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1685297

Diana Link

affiliation not provided to SSRN ( email )

Richard A. Bales (Contact Author)

Ohio Northern University - Pettit College of Law ( email )

525 South Main Street
Ada, OH 45810
United States
419-772-2205 (Phone)

HOME PAGE: http://law.onu.edu/node/3073

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