In AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court upheld the validity of an arbitration agreement waiving consumers’ right to bring contractual claims as a class, instead requiring such claims to be resolved through arbitration. The Court did so by holding that the Federal Arbitration Act preempted a state rule providing that class action waivers in arbitration agreements were unconscionable and, therefore, unenforceable. 131 S. Ct. 1740, 1753 (2011). Since Concepcion became the law of the land, the Supreme Court and other federal courts have announced, through holdings and dicta, that not all arbitration and class waiver provisions will be enforceable. Their decisions provide further guidance and warnings for drafters of arbitration and class waiver provisions.

For instance, the Supreme Court has warned that high fees associated with arbitration may render arbitration agreements unenforceable. Opt-out clauses have been noted with favor in decisions enforcing class waivers in arbitration agreements. Most recently, in refusing to review a California Supreme Court case carving out an exception to the general enforceability of class waivers, the Supreme Court may have signaled that such waivers are not enforceable to preclude class proceedings on certain claims. It is also still unsettled whether a court or an arbitrator decides whether a claim may proceed as a “class arbitration,” absent a clear selection in the arbitration agreement.

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