Class Action Waivers and the Arbitrability of Antitrust Claims—Charting the
Likely Ramifications of AMEX III
By Demetrius X. Lambrinos
Published in The Journal of the Antitrust and Unfair Competition Law Section of the
State Bar of California
I. Introduction
There has been much debate concerning the scope of the Supreme Court’s recent
decision in AT&T Mobility LLC v. Concepcion, and the enforcement of collective
arbitration waivers—also called “class action waivers”—in antitrust cases.1 Class action
waivers are contractual provisions that require the parties to submit all potential claims to
individual arbitration while simultaneously forbidding them from seeking any form of
class-wide relief. The ability of corporate defendants to enforce such waivers in the
consumer antitrust context has potentially wide-ranging implications. Yet the exact
contours of Concepcion’s holding remain ambiguous. While the Court was clear that
“state-law rules” invalidating class action waivers are pre-empted by the Federal
Arbitration Act (“FAA”), it left open the possibility that they could be found
unenforceable under federal common law, or what is sometimes referred to as the
“federal substantive law of arbitrability.”2
In an apparent effort to clear up this ambiguity, the Supreme Court granted
certiorari in American Express Company v. Italian Colors Restaurant, to consider
whether the FAA “permits courts, invoking the ‘federal substantive law of arbitrability,’
to invalidate arbitration agreements on the ground that they do not permit class arbitration
of a federal- law claim.”3 This article provides a background of the recent jurisprudence
on this issue, discusses the circuit court landscape, evaluates the likely outcome of Amex
III, and assesses the viability of alternative strategies for challenging class action waivers
that are likely to exist post-Amex III.4
II. Background
A. The Federal Substantive Law of Arbitrability and the Effective
Vindication of Federal Statutory Rights Doctrine
In Concepcion, the Court’s preemption analysis focused on how courts should
respond when the application of state law rule or doctrine acts as an obstacle to the
enforcement of the FAA.5 The analysis is necessarily different when a claimant
challenges the enforceability of an arbitration clause under a federal doctrine because
preemption is, by definition, not an issue. Traditionally, the Court has analyzed such
cases under the federal substantive law of arbitrability, a ”body of law” that has
developed under the FAA’s “savings clause,” which states that agreements to arbitrate
are enforceable “save upon such grounds as exist at law or in equity for the revocation of
any contract.”6 One important application of this doctrine is that arbitration agreements
can be found unenforceable as against public policy if the party challenging them
demonstrates that enforcing them would prevent them from vindicating federal statutory
rights.7 This is particularly apt in the antitrust context, where there is a widely-
recognized public policy supporting private enforcement of the federal antitrust laws.8
The Supreme Court’s opinions in Mitsubishi Motors Corporation v. Soler
Chrysler-Plymouth, Inc.9 in 1985, Gilmer v. Interstate/Johnson Lane Corporation10 in
1991, and Green Tree Financial Corporation-Alabama v. Randolph11 in 2000 shed light
on the Court’s likely approach to the issue in Amex III. In each of these cases, the Court
applied the effective vindication of federal statutory rights doctrine—also called the
“effective-vindication doctrine”—but nonetheless ordered mandatory arbitration based on
its finding that the party challenging the arbitration provision had failed to satisfy his, her
or its burden. This suggests that when the Court issues its opinion in Amex III, it is likely
to clarify the scope of the effective-vindication doctrine when applied to class action
waivers, but is unlikely to abandon the doctrine altogether even if it reverses the Second
Circuit. To do so would be to ignore decades of its own jurisprudence on arbitrability.
1. Mitsubishi Motors Corporation v. Soler Chrysler-Plymouth,
Inc.
This case involved a claim brought by Mitsubishi against Soler, one of its dealers,
for breach of contract.12 Soler brought a counterclaim under the Sherman Act for alleged
antitrust violations.13 The district court granted Mitsubishi’s motion to compel arbitration
pursuant to a mandatory arbitration provision contained in the Distributor Agreement.14
The First Circuit reversed, holding that antitrust claims were per se nonarbitrable under
the Second Circuit’s American Safety doctrine.15
The Supreme Court reversed the First Circuit, and held that while the circuit
courts had “uniformly” followed American Safety, this doctrine did not apply to
international transactions.16 The Court noted its “skepticism” with the doctrine and stated
that “[t]he mere appearance of an antitrust dispute does not alone warrant invalidation of
the selected forum on the undemonstrated assumption that the arbitration clause is
tainted.”17 The Court further explained that notwithstanding the importance of private
antitrust enforcement, an arbitration clause was not per se unenforceable just because it
deprived the claimants their day in court.18
However, in an apparent refinement of the American Safety doctrine, the Court
noted in dicta that “in the event the choice-of-forum and choice-of-law clauses operated
in tandem as a prospective waiver of a party’s right to pursue statutory remedies for
antitrust violations, we would have little hesitation in condemning the agreement as
against public policy.”19 Under this “prospective waiver” rule, a party could challenge the
enforcement of an arbitration provision by establishing that (a) “Congress itself has
evinced an intention to preclude a waiver of judicial remedies for the statutory rights at
