As Mandatory Binding Arbitration Meets the Class Action, Will the Class Action Survive?

Abstract This article considers the impact of arbitration on the future of class actions. In the author’s view, if litigants successfully meet the prerequisites for a class action, reviewing courts may: (1) order that the parties use arbitration to resolve the dispute, thus precluding claimants from using court or an arbitration venue for their class claims; (2) refuse to send the parties to arbitration, instead permitting claimants to litigate their class claims; (3) order that the dispute be resolved through a class arbitration process; or (4) order the dispute to arbitration but allow the arbitrators to determine whether the dispute should be resolved individually or on a class basis. The article concludes that when the parties agree to a broad arbitration clause, it is inappropriate to exclude an entire class of disputes from arbitration, unless permitting class arbitration would violate constitutional, statutory, or contractual interests. This article advocates that Congress enact legislation to prevent companies from using binding arbitration clauses to eliminate class actions entirely if society believes that companies should not be allowed to insulate themselves from class actions, and courts fail to accept the statutory and contractual arguments set out in this article or elsewhere.