In 2011, the U.S. Supreme Court handed down the consumer case of AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (2011). Generally speaking, Concepcion held that arbitration agreements which banned class actions are enforceable.
After Concepcion, advocates argued that there was at least one exception to Concepcion. Importantly, Concepcion did not overrule a 1985 United State Supreme Court case called Mitsubishi Motor Corp. v. Soler Chrysler-Plymouth. That line of case effectively held that agreements which prevent plaintiffs from vindicating their rights are not enforceable.
Therefore, some advocates argued that any arbitration agreement containing a class action waiver that was drafted in a way that it effectively prevented plaintiffs from vindicating their statutory rights were unenforceable. That was the only way, they argued, to reconcile Concepcion and Mitsubishi Motor Corp.
In 2012, the Second Circuit handed down In Re American Express Merchants Litigation, 667 F.3d 204 (2d Cir. 2012). In this case, the Second Circuit found that the plaintiffs had proved they would be unable to effectively vindicate their rights under the Sherman Act, and thus the agreement at issue was unenforceable.
The United States Supreme Court granted certiorari on the American Express case and recently heard oral arguments. Stay tuned.