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2015: Arbitration Inches Toward Center Stage

By Liz Kramer | December 30, 2015 in Year In Review

Arbitration case law did not break any new ground in 2015.  Instead, a larger sector of the public became aware of the ground already broken in 2011 and 2013, as well as how common arbitration is in professional sports.

Let’s review some of the attention-grabbing arbitration headlines of 2015.  There was:

  • That time in February when the arbitration award in Lance Armstrong’s favor got reversed, ten years after the fact.
  • Also in February, the arbitration award against Adrian Peterson (a football star, my fellow arbitration nerds) was vacated.
  • Then in March, the CFPB (a new federal agency, you football nerds) issued an insanely long report, finding, in short, that it is nearly impossible to avoid arbitration agreements (with their waivers of class actions) in consumer financial products, consumers have no idea they are subject to arbitration, and consumers seem to get higher awards in federal court than in arbitration when they challenge financial institutions.
  • In April, Missouri’s high court found it was unconscionable to allow the NFL Commissioner to serve as the arbitrator deciding an employee’s age discrimination claims.
  • Acting against type, in August the California Supreme Court applied SCOTUS opinions and upheld an arbitration agreement in a consumer clause, despite two lower courts having found it unenforceable. (Okay, that was not headline-grabbing, except in select legal publications.  But it should have been.)
  • Back to football again, in September a federal judge vacated the arbitration award against Tom Brady.  (He’s the quarterback who sells Wrangler jeans, right?  Just kidding, football fans, just kidding.)
  • In October, the CFPB started its pre-rulemaking process by describing two ways it plans to change consumer financial arbitration.  It is likely to: 1) invalidate arbitration agreements for any members of a putative class action “unless and until class certification is denied or the class claims are dismissed;” and 2) collect and publish consumer financial claims filed in arbitration.
  • In November, the New York Times published a three-part series on arbitration, which was generally unflattering.  It focused on the impact of SCOTUS’s decisions, especially in Concepcion and Italian Colors, on individuals’ ability to obtain redress for claims.  More than any court decision in the last five years, this newspaper series got lots of people talking about arbitration and reacting to the series.
  • Finally, in December, SCOTUS capped off this year of arbitration headlines by reversing California’s intermediate appellate court , which had refused to uphold a class action waiver in arbitration.  SCOTUS’s “eye of Sauron” is stuck on California.  Despite evidence that California is (begrudgingly?) enforcing federal decisions interpreting the Federal Arbitration Act (see bullet point five above and this decision from 2014), SCOTUS still sees California as the black sheep of the national arbitration family.  (This year, I nominate Kentucky for that role.  Didn’t SCOTUS see this opinion comparing arbitration to abortion?)

What would casual observers learn from this year of arbitration headlines?  Two lessons: first, famous athletes have an uncanny knack for vacating arbitration awards; and second, there is a real battle brewing between SCOTUS and the executive branch (CFPB as well as NLRB) over enforcement of class action waivers in arbitration agreements.  If that battle erupts in 2016, then arbitration will really take center stage in our national debate.  As usual, you can monitor the drama right here at www.arbitrationnation.com.

Happy New Year everyone!

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