The UCL Practitioner
Wednesday, November 17, 2004
"New JAMS rule rejects ban on class actions"
Now that the UCL has been amended to require class certification (at least in cases filed after its effective date of 11/03/04), this story from Monday's Recorder is of interest. JAMS arbitrators will no longer enforce contractual arbitration clauses that ban class actions. The JAMS press release reads:
JAMS unequivocally takes the position that it is inappropriate for a company to restrict the right of a consumer to be a member of a class action arbitration or to initiate a class action arbitration. The implementation of this policy means that JAMS will not enforce these clauses in class action arbitrations and will require that they be waived in individual cases. JAMS hopes that companies that utilize consumer arbitration will remove class action preclusion clauses from their arbitration clauses, understanding that the inclusion of such clauses is an unfair restriction on the rights of the individual consumer.
This is, as the Recorder notes, a victory for the plaintiffs' bar. The Recorder goes on to observe that the courts have not entirely resolved whether such contract clauses are enforceable. Decisions addressing this issue include Szetela v. Discover Bank, 97 Cal.App.4th 1094 (2002) and Ting v. AT&T, 319 F.3d 1126 (9th Cir. 2003).
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