In an abrupt but not unexpected reversal, the Massachusetts Supreme Judicial Court (SJC) has been forced to change its position on class action waivers in arbitration agreements in light of a new decision by the U.S. Supreme Court. In Feeney v. Dell Inc., SJC-11133 (Mass. Aug. 1, 2013) (Feeney III), the SJC has acknowledged that the public policy exception to class action waivers that it articulated just two months ago in the same case has now been invalidated by the Supreme Court's decision in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) (American Express). Henceforth Massachusetts courts must enforce agreements to arbitrate claims individually, even when the low value of any individual recovery makes it unlikely that the claims will be pursued outside of a class proceeding. The SJC's surrender on this issue may augur an end to efforts by state courts to carve out exceptions to recent Supreme Court rulings strongly favoring enforcement of class action waivers in arbitration agreements.
Feeney III is the latest, and likely final, chapter in the SJC's effort to preserve consumer class action rights under Massachusetts law even when those rights conflict with the strong federal policy favoring enforcement of arbitration agreements under the Federal Arbitration Act (FAA). The Feeney case involves a putative class...
