June 25, 2013

Jeff Hedlund Comments on Supreme Court Decision on the Federal Arbitration Act in Law360

On June 20, 2013, the Supreme Court decided American Express Co. et al v. Italian Colors Restaurant et al, reversing the Second Circuit and holding that the Federal Arbitration Act does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff's cost of individually arbitrating a federal statutory claim exceeds the potential recovery.

In Law360, Jeff Hedlund commented on the implications the decision has on arbitration agreements. "In essence, the court's decision reaffirms the basic principle that arbitration agreements between private parties mean what they say and will not be rewritten by courts after the fact," he said. "And that means that contracting parties need to be very aware of the terms of their agreements and should expect them to be enforced if they sign on. If they enter into such agreements without using that level of care and later want to change the terms, it is indeed — as Justice Kagan wrote in dissent — just too darn bad," Hedlund said.

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