Supreme Court Issues Latest Decision on Class Action Arbitration Waivers

On December 14, the Supreme Court issued DIRECTV, Inc. v. Imburgia, a 6-3 opinion delivered by Justice Breyer, holding that where an arbitration agreement waived class arbitration, but also provided that the agreement would be unenforceable if the class arbitration waiver were unenforceable under the law of the claimants’ state, the Federal Arbitration Act (the “FAA”) preempted that proviso, and thus required enforcement of the class arbitration waiver. This result, requiring individual arbitration while precluding class arbitration, is the latest decision of the Court enforcing arbitration agreements that eliminate both individual litigation and class actions in furtherance of the federal policy in favor of arbitration embodied in the FAA.