January 6, 2015
In American Express Co. v. Italian Colors Restaurant, the Supreme Court confirmed what it had only hinted at two years earlier in AT&T Mobility, LLC v. Concepcion.  In a holding authored by Justice Scalia, the Court made plain that because “arbitration is a matter of contract,” its terms must be “rigorously enforced by courts.”  Therefore, arbitration agreements containing class action waivers are valid under the Federal Arbitration Act (“FAA”).  The Court’s expanded view of the FAA, joined with a clear disfavor of class actions means that businesses can now better manage their legal risk, and the high costs associated with it, through well-drafted arbitration agreements that prohibit any form of class action.

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