LITIGATION TRENDS 2025 | 37 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C Complex Commercial Litigation L These strategies for contending against mass arbitration have met with varied success. For example, the Northern District of Illinois held in Baker that it could not send the plaintiff’s claims to small claims court: among other reasons, a small claims court could not award the damages or issue the injunctive relief the plaintiff was seeking. Baker, 2023 WL 3737808, at *3. There was also reason to believe that the small claims court would not have jurisdiction over the plaintiff’s claims. Id. Some companies have attempted to solve for this problem by amending their arbitration clauses to provide that “[a]ny controversy over the small claims court’s jurisdiction shall be determined by the small claims court” – an amendment which makes it more time-consuming to bring mass arbitrations. Zoom Terms of Service, ZOOM (last visited Feb. 19, 2025). And the Northern District of California held in MacClelland v. Cellco Partnership d/b/a Verizon Wireless and Verizon Communications, Inc. that an arbitration provision was substantively unconscionable because consumers were not permitted to file demands until preceding batches were adjudicated. 609 F. Supp. 3d 1024, 1042 (N.D. Cal. July 1, 2022). (Verizon appealed the district court’s decision to the Ninth Circuit, but the parties jointly agreed to dismiss the appeal.) At the same time, the arbitration agreement reserved the company’s right to raise a statute of limitations defense but did not contain a tolling provision. Id. Accordingly, “[t]hose in the queue who [were] not able to file within the limitations period would be forever barred.” Id.; see also Heckman v. Live Entm’t, Inc., 686 F. Supp. 3d 939, 96263 (C.D. Cal. 2023) (refusing to enforce an arbitration clause that purported to force ticket buyers to arbitrate claims in batches under a process during which all other cases were stayed), aff’d, 120 F.4th 670 (9th Cir. 2024). Some companies have successfully solved for this problem by (i) tolling the statute of limitations while non-batched cases are on “standby” and (ii) allowing both parties to opt out of arbitration and proceed in court under certain circumstances. See, e.g., Tercero v. Sacramento Logistics LLC, No. 2:24-cv-00953-DC-JDP, 2025 WL 43125, at *9 (E.D. Cal. Jan. 7, 2025). Companies seeking to navigate between the Scylla of mass arbitrations and the Charybdis of class actions may, in the coming years, elect to forgo arbitration clauses entirely for standalone waivers of the right to pursue class actions. The Supreme Court has held that “the right of a litigant to employ Rule 23 is a procedural right only, ancillary to the litigation of substantive claims,” and is therefore waivable. Deposit Guar. Nat’l Bank v. Roper, 445 U.S. 326, 332 (1980); see also Epic Sys. Corp. v. Lewis, 584 U.S. 497, 506 (2018); Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 234 (2013). However, several states have determined that standalone class-action waivers are substantively unconscionable and unenforceable as a matter of state common law. Those state laws should control in federal court. Companies considering supplanting their arbitration clauses with standalone class-action waivers should therefore carefully consider: (i) selecting a state law to govern their contracts that is not one of the states that has determined that standalone classaction waivers are unenforceable; (ii) whether the state law they choose could be interpreted to prevent standalone class-action waivers; and (iii) the fact that courts may aggregate claims simply to manage their dockets, notwithstanding what the parties have agreed to. Plaintiffs’ Lawyers Will Continue to Pursue New Mass Torts Multidistrict litigation (MDLs) have continued to dominate the federal district court docket. Based on the most recent U.S. Court caseload statistics, MDLs – which are predominately mass tort actions – make up over 70% of the federal civil caseload, significantly more than the 39% it accounted for a decade ago. 36 | Weil, Gotshal & Manges LLP
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