Last week, the United States Supreme Court issued its opinion in DirecTV v. Imburgia, 577 U.S. ___ (2015). This decision is important for manufacturers of consumer products because it fortifies the ability to incorporate and rely upon arbitration clauses as a way to reduce risk and overall litigation cost.
As most are well aware, arbitration clauses push contractual disputes and related claims out of court and into the realm of alternative dispute resolution. If binding and enforced, such clauses can provide faster adjudication and reduce litigation costs. With the increasing trend in class action consumer product litigation, arbitration agreements have evolved to include class arbitration waivers. Some states however, like California, prohibited such waivers. The Supreme Court in Imburgia made clear, once and for all, that the enforceability of unambiguous arbitration clauses is not a decision that is left to the states, but one that is governed by the Federal Arbitration Act. Read more ›