Mass Arbitration

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Stanford Law Review

Volume 74

une 2022

ARTICLE

Mass Arbitration

J. Maria Glover*

Abstract. For decades, the class action has been in the crosshairs of defense-side

procedural warfare. Repeated attacks on the class action by the defense bar, the U.S.

Chamber of Commerce, and other defense-side interest groups have been overwhelmingly

successful. None proved more successful than the arbitration revolution, a forty-year

campaign to eliminate class actions through forced arbitration provisions in private

contracts. The effects of this revolution on civil justice have been profound. Scores of

claims vanished from the civil justice landscape—claims concerning civil rights, wage

theft, sexual harassment, and consumer fraud. The effects on social justice, racial justice,

gender justice, and economic justice have been especially profound, as the legal claims of

minorities, women, wage-and-hour workers, and the working poor were systematically

and disproportionately foreclosed.

Yet now, just when one would expect the defense bar to be taking a victory lap, prominent

defendants are abandoning the hard-fought right to disable the class action through

arbitration and instead seeking refuge in class-action suits. Why the about-face? A

surprising counteroffensive designed to use individual arbitration to the plaintiff’s

advantage: mass arbitration. This Article presents a foundational analysis of the subject.

The Article develops the first and only case study of mass arbitration and provides a

taxonomy of the results. What emerges is not a variation on old themes, but instead a new

and distinct model of dispute resolution. The investigation reveals significant ways in

which the mass-arbitration model challenges conventional wisdom about the economics

of individual claims; uncovers important differences between the mass-arbitration model

and existing forms of aggregate dispute resolution; recasts long-standing debates in

litigation theory and jurisprudence; and provides new perspective on the relationships

* Professor of Law, Georgetown University Law Center. Thank you to the editors of the

Stanford Law Review for their thoughtful work on this piece. Thanks also to Rachel

Bayefsky, Elizabeth Chamblee Burch, Zachary Clopton, Alexander Colvin, Angela B.

Cornell, Maggie Gardner, James Grimmelmann, David Horton, Alyssa King, Joshua

Kleinfeld, Odette Lienau, Mark Moller, David Noll, Jeffrey J. Rachlinski, D. Theodore

Rave, Alan M. Trammell, W. Bradley Wendel, Robin L. West, and Adam Zimmerman

for insightful comments on earlier drafts. Thanks to Melinda Church, Eloy Rodriguez La

Brada, Kaylee Otterbacher, and Theodore Salem-Mackall for excellent research

assistance.

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among private procedural ordering, public procedural reform, and civil justice. Mass

arbitration, in other words, is a phenomenon in its own right. More importantly, mass

arbitration offers a window into the future of civil justice.

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Table of Contents

Introduction ......................................................................................................................................................... 1287

I. The Arbitration Revolution and the Class-Action Counterrevolution ................... 1295

A. The Arbitration Revolution ................................................................................................... 1296

B. The Class-Action Counterrevolution ............................................................................... 1298

C. The Aftermath ................................................................................................................................ 1303

II. Can’t Stop The Revolution: Public-Reform Pitfalls, Private-Reform

Possibilities .................................................................................................................................................. 1311

A. The Failure of Public Procedural-Ordering Efforts .................................................. 1311

B. The Possibility of Private Procedural Counteroffensives ...................................... 1315

III. Mass-Arbitration Case Study ........................................................................................................... 1319

A. Background ...................................................................................................................................... 1322

1. Definitions .............................................................................................................................. 1322

2. Methodology ......................................................................................................................... 1324

B. Overcoming the Principal Obstacles to Mass Arbitration .................................... 1326

1. Competing with the defense bar ................................................................................ 1326

2. Overcoming substantial startup costs ..................................................................... 1328

C. Key Elements of the Mass-Arbitration Model ............................................................. 1340

1. Leveraging arbitration fees and fee-shifting provisions in

arbitration agreements .................................................................................................... 1340

2. Arbitrating claims individually, or credibly threatening

to do so ...................................................................................................................................... 1350

3. Selecting higher-threshold-value claims ............................................................... 1353

4. Generating aggregate settlements from individual claims ......................... 1355

IV. Contemporaneous and Future Developments ........................................................................ 1360

A. Scaled-Up Mass-Arbitration Firms .................................................................................... 1360

B. Scaled-Up Arbitral Fora ............................................................................................................ 1362

C. Revised Agreements .................................................................................................................... 1364

1. Eliminating fee provisions ............................................................................................ 1364

2. Inserting “batching” provisions .................................................................................. 1367

3. Provisions that change the arbitral forum ........................................................... 1370

V. Case-Study Findings and Limitations .......................................................................................... 1373

A. Mass-Arbitration Taxonomy ................................................................................................ 1373

B. Study Limitations ......................................................................................................................... 1376

C. Study Takeaways .......................................................................................................................... 1377

VI. Applications, Expansions, and Implications ............................................................................ 1378

A. Claim Facilitation and Merits-Based Claim Resolution ......................................... 1379

B. Informal Aggregate Dispute Resolution .......................................................................... 1380

C. Mass Arbitration and the Civil Justice System ............................................................ 1382

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Conclusion ............................................................................................................................................................. 1385

Appendix ................................................................................................................................................................ 1386

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Introduction

In 2018, the minimum wage in Massachusetts and California was $11.00.

In Illinois, $8.25.

In New Jersey it was $8.60, up from $8.44 the previous year.

And in New York it was $10.40, up from a previous $9.70.

Drivers in these

states for the rideshare service Uber, however, alleged that they had routinely

been paid less than those minimum wages—often far less.

The Fair Labor

Standards Act of 1938 (FLSA)

seemed like a good candidate to combat what

appeared to be fairly blatant wage theft. Indeed, Congress included a collective-

action provision in the FLSA because most wage-theft claims by wage-and-

hour workers are not economically viable on an individual basis.

According to

their employment agreements with Uber, however, drivers were required to

arbitrate any claims individually. Putative FLSA collective-action claims by

many Uber drivers were therefore stayed pending arbitration.

* This Article is current as of March 2022. Unless otherwise stated, subsequent changes

in the mass-arbitration landscape are not addressed.

1. Office of Commc’ns, Wage & Hour Div., Changes in Basic Minimum Wages in Non-farm

Employment Under State Law: Selected Years 1968 to 2021, U.S.

DEP’T LAB.,

https://perma.cc/VU6S-KSJW (last updated Jan. 2022).

2. Id.

3. Id.

4. Id.

5. See Petition for Order Compelling Arbitration ¶¶ 2, 8, Abadilla v. Uber Techs., Inc.,

No. 18-cv-07343 (N.D. Cal. Dec. 5, 2018), ECF No. 1 [hereinafter Abadilla Petition for

Arbitration] (providing a general summary of the arbitration demands of Uber drivers

from California, Illinois, Massachusetts, New Jersey, and New York, all of whom

brought claims against Uber under the Fair Labor Standards Act and relevant state

labor laws).

6. Ch. 676, 52 Stat. 1060 (codified as amended in scattered sections of 29 U.S.C.).

7. 29 U.S.C. § 216(b); see, e.g., Calvillo v. Bull Rogers, Inc., 267 F. Supp. 3d 1307, 1310

(D.N.M. 2017) (“The purpose of collective action under the FLSA is to give ‘plaintiffs

the advantage of lower individual costs to vindicate rights by the pooling of resources,’

and to benefit the judicial system ‘by efficient resolution in one proceeding of common

issues of law and fact arising from the same alleged . . . activity.’ ” (alteration in original)

(quoting Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 170 (1989))).

8. See, e.g., Olivares v. Uber Techs., Inc., No. 16-cv-06062, 2017 WL 3008278, at *1, *4 (N.D.

Ill. July 14, 2017) (granting Uber’s motion to compel arbitration for a class of drivers

subject to Uber’s arbitration agreement, which prohibited class actions); Singh v. Uber

Techs., Inc., 571 F. Supp. 3d 345, 347-52, 365-67 (D.N.J. 2021) (same), appeal filed, No. 21-

3234 (3d Cir. Dec. 6, 2021). Claims under analogous state laws met the same result. See,

e.g., Mumin v. Uber Techs., Inc., 239 F. Supp. 3d 507, 518-20, 541 (E.D.N.Y. 2017)

(granting Uber’s motion to compel arbitration for those claimants who had not opted

out of their arbitration agreements); Capriole v. Uber Techs., Inc., 460 F. Supp. 3d 919,

922-24, 934 (N.D. Cal. 2020) (doing the same, in a case transferred pursuant to a forum-

selection clause, for Massachusetts drivers who had not opted out of their agreements

with Uber), aff’d, 7 F.4th 854 (9th Cir. 2021); O’Connor v. Uber Techs., Inc., 904 F.3d

footnote continued on next page

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To any individual driver—and, just as importantly, to any individual

driver’s lawyer—pursuing an individual claim in arbitration appeared to be a

nonstarter. Under the applicable fee schedule for Judicial Arbitration and

Mediation Services (JAMS), the nonrefundable filing fee for arbitration was

$1,500 per demand.

Given the value of a single driver’s claim for unpaid or

underpaid wages, the up-front investment to advance this filing fee

would

not be an economically rational proposition for either individual claimants or

their attorneys.

In effect, then, the arbitration agreement eliminated drivers’

1087, 1090, 1095 (9th Cir. 2018) (reversing the district court’s denial of Uber’s motions

to compel arbitration for three putative driver classes).

9. See, e.g., Abadilla Petition for Arbitration, supra note 5, ¶ 21; Andrew Wallender,

Corporate Arbitration Tactic Backfires as Claims Flood In, B

LOOMBERG L. (Feb. 11, 2019,

3:06 AM), https://perma.cc/XT8Y-TW2S. Although Uber’s arbitration agreement

provided that Uber would pay at least some of the $1,500, it refused to pay any portion

of the fees in the face of multiple arbitration demands (that is, mass arbitration). See

Declaration of Michael Colman in Support of Defendant’s Motion to Compel

Arbitration & to Dismiss the Action at 56, Olivares, 2017 WL 3008278 (No. 16-cv-06062),

ECF No. 14-1 (providing for equal sharing of fees unless otherwise required by law);

Abadilla Petition for Arbitration, supra note 5, ¶ 21 (“JAMS has repeatedly advised Uber

that JAMS is ‘missing the . . . filing fee of $1,500 for each demand, made payable to

JAMS.’” (quoting a JAMS notice to Uber)). On costs in arbitration generally, see

Arbitration in America: Hearing Before the S. Comm. on the Judiciary, 116th Cong. (2019)

[hereinafter Senate Arbitration Hearing] (statement of Myriam Gilles, Professor,

Benjamin N. Cardozo School of Law), https://perma.cc/93RQ-6PW2 (“Under these

class-banning arbitration clauses, any claimant must bear 100% of the costs of

proceeding in arbitration by herself; her claim cannot be joined with those of any other

arbitral claimant as a way of distributing costs and risks.”).

10. The portion of the filing fee for which claimants bear responsibility may be capped by

the applicable arbitral forum’s fee schedule at the time of filing. See, e.g., Arbitration

Schedule of Fees and Costs,

JAMS, https://perma.cc/U8F6-TZKK (archived May 9, 2022)

(“For matters based on a clause or agreement that is required as a condition of

employment, the employee is only required to pay $400.”). The relevant arbitration

agreement may also provide that the employer will pay a portion of the claimant’s

filing fees. See supra note 9. Faced with mounting fees from arbitration demands, Uber

settled with almost 60,000 of its drivers in 2019 for more than $146 million. See Chris

Isidore, Uber Settles Disputes with Thousands of Drivers Ahead of Its IPO, CNN (May 9,

2019, 8:10 AM EDT), https://perma.cc/PTM3-36T6. Other companies faced with mass

arbitration have responded similarly, leading California to enact a law penalizing any

company that refuses to pay arbitration fees. C

AL. CIV. PROC. CODE § 1281.97 (West

2022); see also Postmates Inc. v. 10,356 Individuals, No. 20-cv-02783, 2021 WL 540155, at

*13 (C.D. Cal. Jan. 19, 2021) (denying Postmates’ attempt to strike down the California

law); Alison Frankel, Calif. Judge Upholds State Law Penalizing Companies for Stalling on

Arbitration Fees, R

EUTERS (Jan. 20, 2021, 4:49 PM), https://perma.cc/P9V7-MUWE

(describing Postmates’ efforts to avoid arbitration as “unrelenting”).

11. Cf., e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 365 (2011) (Breyer, J.,

dissenting) (“What rational lawyer would have signed on to represent the

Concepcions . . . for the possibility of fees stemming from a $30.22 claim?”); Senate

Arbitration Hearing, supra note 9 (statement of Myriam Gilles, Professor, Benjamin N.

Cardozo School of Law) (“Most [consumers] cannot find lawyers to represent them in

arbitration . . . .”).

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FLSA claims, just as similar agreements had done to hundreds of thousands of

legal claims for decades. But then a funny thing—an improbable, near-

impossible thing—happened. In a series of filings, the Uber drivers served more

than 12,500 individual arbitration demands on Uber.

And their lawyers

demanded that Uber reimburse the filing fees—$18.75 million in total—just as

Uber had agreed to do in its arbitration agreement.

This was not a collective

action, or a class action, or even class arbitration. This was mass arbitration.

By mass arbitration

I mean the following. Some enterprising and (highly)

capitalized attorneys file arbitration demands on behalf of individual claimants

subject to mandatory arbitration agreements. The claims are brought against

the same defendant for the same course of conduct. The attorneys then do this

again. And again. And again. Mass arbitration is a new model of claiming that is

at once entirely individualized (one-on-one arbitration) and aggregate. The

individual claims that make up the multifarious one-on-one arbitrations are

brought against a single defendant, arising out of similar alleged misconduct.

Mass arbitration is both a response to and a product of a decades-long,

wildly successful campaign by defense-side interests to dismantle the

infrastructure for enforcing substantive rights.

This campaign, waged by the

defense bar, the U.S. Chamber of Commerce, multiple Republican presidential

administrations, and various defense-side interest groups, involved a series of

procedural offensives in the Supreme Court and before Congress.

Many

12. Alison Frankel, Uber Tells Its Side of the Story in Mass Arbitration Fight with 12,500 Drivers,

EUTERS (Jan. 16, 2019, 12:03 PM), https://perma.cc/4VQT-FHHM.

13. Id.

14. The term “mass arbitration” has been used by one scholar to describe the ubiquity of

arbitration agreements in the post–arbitration revolution landscape. David Horton,

Mass Arbitration and Democratic Legitimacy, 85 U. C

OLO. L. REV. 459, 476-79 (2014)

(reviewing M

ARGARET JANE RADIN, BOILERPLATE: THE FINE PRINT, VANISHING RIGHTS,

AND THE RULE OF LAW (2013)). What the author meant in that book review, though,

was a massive number of actual agreements. That is not mass arbitration as described

in this Article; indeed, it is almost the opposite, given that those agreements tend to

result in almost no arbitration. See infra Part I.C.

15. See generally Stephen B. Burbank & Sean Farhang, Rights and Retrenchment in the Trump

Era, 87 F

ORDHAM L. REV. 37, 37, 59 (2018) (explaining how rights-creating statutes

enacted during the 1960s and 1970s brought about a procedural counterrevolution

against federal litigation); J. Maria Glover, The Structural Role of Private Enforcement

Mechanisms in Public Law, 53 W

M. & MARY L. REV. 1137, 1140-41 (2012) (detailing the

dismantling of private enforcement mechanisms in litigation and noting the United

States’ unique reliance on private litigation to regulate wrongdoing).

16. See, e.g., Joanna C. Schwartz, The Cost of Suing Business, 65 DEPAUL L. REV. 655, 655-56

(2016) (describing how the Supreme Court adopted the position of the Chamber of

Commerce and other business amici in recent class-action suits); Stephen B. Burbank &

Sean Farhang, Class Actions and the Counterrevolution Against Federal Litigation, 165 U.

PA.

L. REV. 1495, 1524-25 (2017) (characterizing Republican anti–class-action bills in the

early 1990s and the Chamber of Commerce’s increased amicus activity since 1995 as

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decades and scores of victories after its inception, the campaign achieved wide

deregulation across the American legal landscape.

In the crosshairs of the campaign: the class-action device. At the urging of

conservative administration officials, President Ronald Reagan’s judicial

appointees received careful vetting as to their views on the class action.

President George W. Bush pushed Congress to examine litigation practices and

the perceived explosion of “junk” litigation in nearly every State of the Union

address.

A group of Fortune 100 corporate lawyers helped draft the Class

“part of a wider and concerted campaign of litigation retrenchment”); Brianne J. Gorod,

The First Decade of the Roberts Court: Good For Business Interests, Bad for Legal

Accountability, 67 C

ASE W. RSRV. L. REV. 721, 722-23 (2017) (“[T]he Chamber of

Commerce . . . appears to have been more successful before the Roberts Court than it

was before either of the two Courts that preceded it.”); see also Joanne Doroshow,

Federal Legislative Attacks on Class Actions, 31 L

OY. CONSUMER L. REV. 22, 30-36 (2018)

(recounting the history of attacks on Federal Rule of Civil Procedure 23 by corporate

lobbying groups and Republican legislators).

17. See Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1647 (2018) (Ginsburg, J., dissenting) (citing

Glover, supra note 15, at 1150-51) (explaining how private litigation is critical to the

regulation of wrongdoing in the United States).

18. See Myriam Gilles, The Day Doctrine Died: Private Arbitration and the End of Law, 2016 U.

ILL. L. REV. 371, 378-83 (noting that “[t]he President personally met every judicial

nominee to ensure their . . . fidelity to his vision,” which included a “[s]pecial ire”

toward class-action impact litigation).

19. See President George W. Bush, Address Before a Joint Session of the Congress on

Administration Goals (Feb. 27, 2001), https://perma.cc/GK57-GS2L (discussing the

need to avoid “frivolous lawsuits” against medical providers); President George W.

Bush, 2003 State of the Union Address (Jan. 28, 2003), https://perma.cc/E9AJ-GXLJ

(discussing the need for medical liability reform); President George W. Bush, 2004 State

of the Union Address (Jan. 20, 2004), https://perma.cc/5HA3-PLSM (calling for the

elimination of “wasteful and frivolous medical lawsuits”); President George W. Bush,

2005 State of the Union Address (Feb. 2, 2005), https://perma.cc/4XAL-FL5Z (“Justice is

distorted and our economy is held back by irresponsible class actions . . . .”); President

George W. Bush, 2006 State of the Union Address (Jan. 31, 2006), https://perma.cc/

5AYL-TQGZ (“I ask . . . Congress to pass medical liability reform this year.”); President

George W. Bush, 2007 State of the Union Address (Jan. 23, 2007), https://perma.cc/

ZZ8Z-NU6Q (calling for legislation against “junk lawsuits”); President George W.

Bush, 2008 State of the Union Address (Jan. 28, 2008), https://perma.cc/S25K-BDFZ

(calling on Congress to address an “epidemic of junk medical lawsuits”); see also Gilles,

supra note 18, at 387. Whether the perceived “litigation explosion” reflects reality is not

so obvious. For instance, the number of civil cases filed in state courts decreased by 7.7%

between 2008 and 2012. C

T. STAT. PROJECT, NAT’L CTR. FOR STATE CTS., EXAMINING THE

WORK OF STATE COURTS: AN OVERVIEW OF 2012 STATE TRIAL COURT CASELOADS 4

(2014), https://perma.cc/K9G3-8NDL. The picture in federal courts is more nuanced:

Federal civil appeals decreased by 11% between 2009 and 2018, but

civil filings in U.S.

district courts rose 7.1% during the same period (although they declined by 5.2%

between 2017 and 2018). Federal Judicial Caseload Statistics 2018,

U.S. CTS.,

https://perma.cc/L5ST-JV9K (archived May 13, 2022).

Civil filings rose a further 3.4%

between 2018 and 2019, Federal Judicial Caseload Statistics 2019,

U.S. CTS.,

https://perma.cc/9SDL-WXPE (archived May 13, 2022), and 16.2% between 2019 and

footnote continued on next page

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Action Fairness Act (CAFA)—which aimed to reduce the overall number of

class certifications in the litigation landscape

—and spent somewhere between

$50 to $200 million in support of the bill.

Meanwhile, the defense bar secured

Supreme Court victories in case after class-action case. The Court (often, but

not always, in 5–4 decisions) ratcheted up class-certification standards under

Rule 23(a) of the Federal Rules of Civil Procedure;

effectively removed the

class action from the products liability landscape;

made civil rights claims

more difficult to pursue on a class-wide basis;

and embraced the defense

coalition’s conception of the class action as procedural pariah.

The campaign’s focus on the class action was grounded in conventional

wisdom regarding claiming economics. This wisdom holds—and empirical

research tends to support

—that for an individual with a low-value but

2020, Federal Judicial Caseload Statistics 2020, U.S. CTS., https://perma.cc/W89J-F74F

(archived May 13, 2022).

20. See S. REP. NO. 109-14, at 4-5, 13-14, 22-23, 53-54 (2005) (expressing concern with the

“dramatic explosion of class actions in state courts” and describing how CAFA makes

removal to federal courts—which are less likely to grant certification—easier).

21. See David Marcus, Erie, the Class Action Fairness Act, and Some Federalism Implications of

Diversity Jurisdiction, 48 W

M. & MARY L. REV. 1247, 1288 (2007). Despite CAFA’s success,

more dramatic legislative efforts by class-action opponents met with resistance. See

Gilles, supra note 18, at 396-97 (describing one bill that would have limited contingency

fees for plaintiffs’ attorneys).

22. E.g., Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997) (holding that “undiluted,

even heightened, attention” is required for settlement-only class certification under

Rule 23); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349-50 (2011) (adopting Richard

Nagareda’s heightened “predominance” standard for purposes of Rule 23(a)

commonality and stating that the only questions relevant for commonality are those

that generate “answers apt to drive the resolution of the litigation” (emphasis omitted)

(quoting Richard A. Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.

L. REV. 97, 132 (2009))); see also Robert H. Klonoff, The Decline of Class Actions, 90 WASH.

U. L. REV. 729, 764 (2013) (arguing that courts have “inject[ed] confusion over what is

required to satisfy each element of Rule 23(a)” by applying the rule’s requirements to

class definitions).

23. See, e.g., Amchem, 521 U.S. at 609-11 (discussing the impediments to class certification

presented by an asbestos products liability suit); Ortiz v. Fibreboard Corp., 527 U.S. 815,

853 (1999) (noting that having “enough assets to pay all projected claims” would

preclude the “certification of any mandatory class on a limited fund rationale”).

24. See Dukes, 564 U.S. at 372-78 (Ginsburg, J., concurring in part and dissenting in part).

25. See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 350 (2011) (describing class

actions as imposing in terrorem settlement pressure and stating that “class arbitration

would be no different”); Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 686-

87 (2010) (stating that the “stakes of class-action arbitration are comparable to those of

class-action litigation” and holding that class arbitration may not be compelled absent

explicit agreement); see also In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1296-98 (7th

Cir. 1995) (emphasizing the potential for class actions to impose “intense” settlement

pressure and refusing to certify an issue class based on this pressure).

26. See infra notes 112-17 and accompanying text.

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potentially meritorious claim, the costs of pursuing an individual case are

typically too high for individual claiming to be a rational proposition.

The

class-action device changes that calculus by allowing cost spreading among

claimants, thereby enabling claiming.

Destroy the class action, the logic

went, destroy the claims.

And indeed, the defense coalition came to bury the class action, not restrict

it. None of the coalition’s efforts went so far as to eliminate the class action

altogether: Doing so would have required upending long-standing precedent or

amending the Federal Rules of Civil Procedure. Instead, the coalition waged a

forty-year campaign to gain the ability to contract the class action out of

existence. Its focus? Mandatory arbitration agreements with class-action

waivers in take-it-or-leave-it consumer and employee contracts.

Defendants played the long game.

They convinced the Supreme Court to

bless arbitration provisions prohibiting class action for state-law claims,

for

federal claims,

and finally for claims under statutes like the FLSA that

explicitly provide a right to collective action.

The result was a roadmap for

corporations to engineer, as a practical matter, contractual immunity against a

vast array of claims. The result was also nothing short of a revolution: an

arbitration revolution.

Yet less than a decade later, some of the very entities that waged and

seemingly won the war are abandoning the whole project. Corporations that

engineered the arbitration revolution are now “scared to death” of

arbitration.

So scared, in fact, that some are retreating to the device they

spent decades trying to eliminate: the class action. In May 2021, one of the

27. See Am. Express Co. v. It. Colors Rest., 570 U.S. 228, 245 (2013) (Kagan, J., dissenting).

28. See Edward F. Sherman, Aggregate Disposition of Related Cases: The Policy Issues, 10 REV.

LITIG. 231, 236-38 (1991).

29. See, e.g., Aaron Bruhl, AT&T’s Long Game on Unconscionability, PRAWFSBLAWG (May 5,

2011, 9:40 AM), https://perma.cc/DY38-XECL (speculating that counsel for AT&T had,

for over a decade, been crafting a strategy for creating, testing, and ultimately bringing

a “consumer-friendly” arbitration agreement with a class waiver to the Supreme

Court).

30. Concepcion, 563 U.S. at 337-38, 352.

31. It. Colors, 570 U.S. at 231-32, 238-39.

32. See Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1619-20, 1626 (2018).

33. See David Horton & Andrea Cann Chandrasekher, Employment Arbitration After the

Revolution, 65 D

EPAUL L. REV. 457, 457-60 (2016).

34. Michael Corkery & Jessica Silver-Greenberg, “Scared to Death” by Arbitration: Companies

Drowning in Their Own System, N.Y.

TIMES (Apr. 6, 2020) (quoting an internal DoorDash

document), https://perma.cc/T34V-PJ9X.

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biggest corporations of all—Amazon—dropped the arbitration requirement

from its terms of service entirely. “Fine,” it essentially declared, “sue us.”

How could this total victory transform into a massive retreat not even a

decade later? The answer lies in an unforeseen (and largely unforeseeable)

counteroffensive by a small subset of the plaintiffs’ bar—a counteroffensive

that I term mass arbitration. This Article presents a foundational analysis of

the subject.

Part I traces the backdrop against which mass arbitration emerged. It first

provides a short history of the arbitration revolution (in which the Supreme

Court allowed for mandatory arbitration agreements in virtually all take-it-

or-leave-it contracts) and the concomitant class-action counterrevolution (in

which the Supreme Court not only made class certification more difficult but

also permitted the use of class-action waivers in mandatory arbitration

agreements).

It then details the profound consequences of the arbitration

revolution for the civil justice landscape. Today, virtually all Americans are

subject to mandatory arbitration agreements with class-action waivers. And a

broad swath of claims—for consumer fraud, racial discrimination, gender

discrimination, wage theft, and workplace sexual harassment—have been all

but eliminated.

Decades of attempts at public procedural reform have largely failed.

Nonetheless, the analysis of the Supreme Court’s arbitration jurisprudence in

Part II shows that the arbitration revolution left (narrow) room for private

procedural counteroffensives. To be sure, the Supreme Court has made quite

clear that neither unconscionability nor the effective-vindication doctrine is

sufficient to salvage a representative procedure—the class action—that the

Court itself disfavors. But what could happen if defendants “didn’t have the

35. Sara Randazzo, Amazon Faced 75,000 Arbitration Demands. Now It Says: Fine, Sue Us,

ALL ST. J. (June 1, 2021, 7:30 AM ET) (capitalization altered), https://perma.cc/R5JQ-

J26V; Amanda Robert, Amazon Drops Arbitration Requirement After Facing over 75,000

Demands, ABA

J. (June 2, 2021, 11:45 AM CDT), https://perma.cc/TYG3-GMDU

(“Many companies require their employees and customers to resolve disputes through

arbitration rather than in the courtroom. Now, Amazon is no longer one of them.”).

36. Stephen Burbank and Sean Farhang characterize efforts to retrench the class-action

device as a counterrevolution against federal litigation. See Burbank & Farhang, supra

note 16, at 1496-98. In the context of the arbitration revolution, those same efforts

constitute a counterrevolution against the class action itself—and against civil

litigation generally. For additional literature discussing the retrenchment of rights

through procedural warfare, see generally Glover, supra note 15, at 1162-70; L

AURENCE

TRIBE & JOSHUA MATZ, UNCERTAIN JUSTICE: THE ROBERTS COURT AND THE

CONSTITUTION 291-93 (2014); STEPHEN B. BURBANK & SEAN P. FARHANG, RIGHTS AND

RETRENCHMENT: THE COUNTERREVOLUTION AGAINST FEDERAL LITIGATION (2017); and

J. Maria Glover, All Balls and No Strikes: The Roberts Court’s Anti-worker Activism, 2019 J.

DISP. RESOL., no. 1, at 129.

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class action to kick around anymore”?

What did happen—improbably,

unexpectedly—was mass arbitration.

The best way to understand mass arbitration is to observe it in a real-

world context. Parts III, IV, and V of this Article accordingly provide and

analyze a foundational mass-arbitration case study. One scholar has aptly

referred to private arbitration as a “black hole.”

To see beyond the event

horizon, I drew from an extensive set of materials, some not publicly available,

to create a broad study dataset. These materials included all available claim data

from the American Arbitration Association (AAA), JAMS, and the

International Institute for Conflict Prevention & Resolution (CPR); all relevant

judicial filings, opinions, and orders; and all relevant corporate financial

disclosures.

I also interviewed the principal architects of mass arbitration,

leading plaintiffs’ attorneys,

and a number of leading defense attorneys,

including some of the architects of the defense coalition’s arbitration

revolution.

The study in Part III first uncovers the origin story of mass arbitration—a

story about how a few entrepreneurial attorneys marshaled an unlikely

combination of experience, capital, innovation, and appetite for risk in an

effort to call corporate defendants’ arbitration bluff by, well, arbitrating. They

demanded the same thing those defendants had sought before the Supreme

37. To quote Richard Nixon, speaking before reporters at the Beverly Hilton Hotel in

1962: “You won’t have Nixon to kick around anymore, because gentlemen, this is my

last press conference . . . .” Jason Schwartz, 55 Years Ago—“The Last Press Conference,”

ICHARD NIXON FOUND. (Nov. 14, 2017), https://perma.cc/DQ45-B2BN.

38. Cynthia Estlund, The Black Hole of Mandatory Arbitration, 96 N.C. L. REV. 679, 682 (2018).

39. See infra Part III.A.2.

40. Interview with Travis Lenkner, Managing Partner, Keller Lenkner LLC & Warren

Postman, Partner, Keller Lenkner LLC, in Queenstown, Md. (Jan. 14, 2021); Interview

with Warren Postman, Partner, Keller Lenkner LLC, in Wash., D.C. (July 23, 2021);

Interview with Cory L. Zajdel, Principal Att’y, Z Law, LLC, in Wash., D.C. (July 22,

2021); Interview with Matthew C. Helland, Managing Partner, Nichols Kaster, PLLP,

in Kennebunk, Me. (Sept. 2, 2021). All transcripts and notes are on file with the Author.

41. Interview with Anonymous No. 5 in Wash., D.C. (Nov. 8, 2021); Interview with

Jonathan D. Selbin, Partner, Lieff Cabraser Heimann & Bernstein, LLP, in Wash., D.C.

(July 26, 2021); Interview with Anonymous No. 2 in Wash., D.C. (Mar. 13, 2020);

Interview with Adam T. Klein, Managing Partner, Outten & Golden LLC, in Wash.,

D.C. (Aug. 10, 2021); Interview with Nancy Erika Smith, Att’y, Smith Mullin, P.C., in

Kennebunk, Me. (Aug. 24, 2021). All transcripts and notes are on file with the Author.

42. Interview with Anonymous No. 4 in Wash., D.C. (July 29, 2021); Interviews with

Anonymous No. 3 in Wash., D.C. (Apr. & June 2021); Interview with Anonymous No. 1

in Nashville, Tenn. (Jan. 2006). Additionally, I interviewed leading defense attorneys or

former defense attorneys who had experience with mass arbitration. Interview with

Jonathan E. Paikin, Partner, Wilmer Cutler Pickering Hale & Dorr LLP, in Wash., D.C.

(Nov. 9, 2021); Interview with Anonymous No. 5, supra note 41. All transcripts and

notes are on file with the Author.

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Court: the enforcement of arbitration agreements “according to their terms.”

And they did so repeatedly.

The study in Part III also reveals that mass arbitration is a new and distinct

form of aggregate dispute resolution. Part III explains the mass-arbitration

model’s distinctive features, strategic elements, risks, and benefits. In so doing,

it reveals the counterintuitive ways in which mass arbitration challenges—

indeed, inverts—the conventional wisdom regarding the economics of

claiming. Mass arbitration harnesses individual claiming and eschews class

claiming in order to extract settlements for claimants.

Part IV provides a window into the future of mass arbitration by

uncovering a series of challenges to the mass-arbitration model. Part V then

taxonomizes the case study’s findings and compares the mass-arbitration

model to more familiar and established models of aggregate dispute

resolution—namely, class actions and multidistrict litigation (MDL)

consolidations.

As Part VI details, the impact of mass arbitration on the civil justice

landscape will be profound. First, mass arbitration recasts long-standing

debates in civil justice, particularly those at the intersection of claim

facilitation and settlement pressure. Second, because defendants will have to

contend with the mass-arbitration model in dispute-resolution contexts they

cannot unilaterally change by contract, mass arbitration illuminates the

possibilities and pitfalls of informal aggregate dispute resolution in the civil

justice landscape. Third, mass arbitration suggests a larger critique of the U.S.

civil justice system: It is at best agnostic to many of the systemic injustices it

perpetuates, and it increasingly shirks its countermajoritarian commitments as

it outsources resolutions to moneyed corporate interests.

The counter-counterrevolution is upon us. Mass arbitration has already

driven some corporate defendants into the arms of their longtime nemesis, the

class action. But we have only begun to glimpse the enormous change that

mass arbitration portends.

I. The Arbitration Revolution and the Class-Action

Counterrevolution

The defense coalition tried to kill the class action by shifting dispute

resolution from public litigation to private arbitration. This involved a

significant sleight of hand. As this Part explains, what the defense coalition

really wanted was to eliminate—or at least drastically reduce—plaintiffs’ ability

43. See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (explaining that

requiring class-wide arbitration interferes with the Federal Arbitration Act’s aim of

enforcing arbitration agreements “according to their terms”).

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1296

to assert claims anywhere. Arbitration emerged as an important fig leaf in that

effort.

Though disfavored in early American jurisprudence,

private procedural

ordering is now widely accepted by American courts.

Public rules of

procedure are increasingly treated as default rules subject to waiver.

Judicial

endorsement of private procedural ordering paved the way for the expansion

of “alternative dispute resolution,” namely arbitration. Arbitration agreements

in private contracts, in turn, provided the vehicle by which the defense bar

achieved the “near-total demise” of the class action.

This one-two punch of

mandatory arbitration agreements and class-action waivers has now touched

virtually all Americans, and it has all but eliminated a wide range of consumer,

employee, and civil rights claims.

This Part traces the above developments in three stages. First, it describes

the birth of forced arbitration agreements in take-it-or-leave-it contracts—the

arbitration revolution. Second, it details the near-total death of class actions—

the class-action counterrevolution. Third, it examines the aftermath of the

revolution and the counterrevolution, both for American citizens and for

scores of claims across the legal landscape.

A. The Arbitration Revolution

The history of binding arbitration agreements begins in the first part of

the twentieth century. Following a period of perceived hostility toward

arbitration in federal courts,

Congress passed the Federal Arbitration Act

(FAA) in 1925.

The FAA provides that written arbitration agreements “shall

be valid, irrevocable, and enforceable, save upon such grounds as exist at law or

in equity for the revocation of any contract.”

During debates about the FAA’s

44. See Robin J. Effron, Ousted: The New Dynamics of Privatized Procedure and Judicial

Discretion, 98 B.U.

L. REV. 127, 128, 134 (2018).

45. See Jaime Dodge, The Limits of Procedural Private Ordering, 97 VA. L. REV. 723, 734-38

(2011).

46. See H. Allen Blair, Promise and Peril: Doctrinally Permissible Options for Calibrating

Procedure Through Contract, 95 N

EB. L. REV. 787, 788-91 (2017).

47. See Myriam Gilles, Opting Out of Liability: The Forthcoming, Near-Total Demise of the

Modern Class Action, 104 M

ICH. L. REV. 373, 375-79 (2005) (predicting the “near-total

demise of the modern class action” due to the “rise of contractual class action waivers”

that “work[] in tandem with standard arbitration provisions”).

48. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991). For an alternative

historical account regarding early treatment of arbitration agreements, see Bruce L.

Benson, An Exploration of the Impact of Modern Arbitration Statutes on the Development of

Arbitration in the United States, 11 J.L.

ECON. & ORG. 479, 480-81 (1995).

49. Federal Arbitration Act, ch. 213, 43 Stat. 883 (1925) (codified as amended at 9 U.S.C. §§ 1-

14).

50. 9 U.S.C. § 2.

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potential passage, one senator expressed concern that contracts with

arbitration clauses might be offered on a take-it-or-leave-it basis to captive

customers or employees. The bill’s supporters responded that the FAA was

intended to facilitate the enforcement of freely and fully negotiated

agreements between merchants of equal bargaining power.

For decades, the

Supreme Court’s arbitration jurisprudence aligned with this view of the FAA

and disallowed ex ante arbitration agreements when bargaining power was

unequal.

The story does not pick up in any meaningful way until the 1980s. After

the election of President Ronald Reagan, the defense bar, corporate entities,

and related interest groups launched what would become a decades-long

campaign to expand the universe of permissible contexts for mandatory

arbitration agreements. In a series of cases decided in the 1980s and 1990s, the

defense coalition persuaded the Supreme Court to approve the use of forced

arbitration for claims under federal antitrust laws,

securities laws,

and

antidiscrimination statutes.

Lower courts, meanwhile, enforced arbitration

agreements found in mail inserts,

in shrink-wrap licenses,

and even in

“add-ons” to contracts already entered into by consumers.

By 2012, the

arbitration revolution for legal claims was largely complete: The Court held

51. See Hiro N. Aragaki, The Federal Arbitration Act as Procedural Reform, 89 N.Y.U. L. REV.

1939, 1948 & n.42, 2007 & n.321 (2014) (citing Sales and Contracts to Sell in Interstate and

Foreign Commerce, and Federal Commercial Arbitration: Hearing on S. 4213 and S. 4214

Before a Subcomm. of the S. Comm. on the Judiciary, 67th Cong. 8-11 (1923)); see also Pamela

S. Karlan, David C. Baum Memorial Lecture, Disarming the Private Attorney General,

2003 U.

ILL. L. REV. 183, 204 (noting that Congress may have intended to exclude

employment contracts from the FAA); David S. Schwartz, Enforcing Small Print to

Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled

Arbitration, 1997 W

IS. L. REV. 33, 38 (asserting that the FAA was not intended to cover

contracts of adhesion).

52. See, e.g., Wilko v. Swan, 346 U.S. 427, 435-38 (1953), overruled by Rodriguez de Quijas v.

Shearson/Am. Express, Inc., 490 U.S. 477 (1989).

53. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628-29 (1985).

54. Rodriguez de Quijas, 490 U.S. at 480-81, 484-85.

55. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 23-24, 29, 35 (1991).

56. Sanders v. Comcast Cable Holdings, No. 07-cv-00918, 2008 WL 150479, at *1-3, *12

(M.D. Fla. Jan. 14, 2008).

57. Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1148, 1151 (7th Cir. 1997).

58. For a recent example, see Miracle-Pond v. Shutterfly, Inc., No. 19-cv-04722, 2020 WL

2513099, at *1-2, *6 (N.D. Ill. May 15, 2020) (permitting the addition of an arbitration

clause to existing consumer contracts without notice of modification). But see, e.g.,

Douglas v. U.S. Dist. Ct., 495 F.3d 1062, 1065-67 (9th Cir. 2007) (per curiam) (requiring

notice in order to enforce an add-on arbitration clause).

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that all federal statutory claims are arbitrable unless Congress expressly

provides otherwise.

After these successes, the scope of the defense coalition’s goals expanded. If

arbitration agreements could be used to move legal claims out of court and into

private dispute resolution, perhaps they could be used to remove them

altogether. Aware that directly retrenching substantive rights was politically

impractical,

the coalition sought to eliminate rights indirectly by targeting

the principal mechanism for their enforcement—the class action. And so, as the

next Subpart traces, the coalition also waged a class-action counterrevolution.

B. The Class-Action Counterrevolution

In the 1980s, in response to a perceived “litigation explosion” and an

increase in Rule 23(b)(3) suits (which tended to extract large settlements from

corporate defendants

), business leaders and conservative politicians launched

a series of public attacks on the class action.

According to these individuals,

class actions allowed “radical” lawyers to use litigation to subvert “the

democratic will as expressed through legislatures or executive action.”

President Reagan’s judicial appointees were vetted on the class-action issue to

confirm that they would help effectuate the Reagan Administration’s anti-

litigation agenda.

Conservative groups, particularly in the 1990s and 2000s,

engaged in numerous efforts to retrench class actions through congressional

action.

The defense coalition had even more success before the federal judiciary,

where its lawyers contested the interpretation of nearly every element of

Rule 23. Conservative judges, many of them skeptical of mass-harm claims,

59. See CompuCredit Corp. v. Greenwood, 565 U.S. 95, 103-05 (2012) (“Because the [Credit

Repair Organizations Act] is silent on whether claims under the Act can proceed in an

arbitral forum, the FAA requires the arbitration agreement to be enforced according to

its terms.”).

60. See Burbank & Farhang, supra note 15, at 43.

61. See Gilles, supra note 18, at 376 (“Beginning in the 1980s, class actions racked up many

billions of dollars in settlements, spread across an ever-expanding range of subject

areas and industries . . . . By the 2000s, as multimillion dollar range settlements became

almost commonplace, the power of class cases to coerce lucrative settlements was not

much in dispute.” (footnotes omitted)).

62. Id. at 378-81, 395-96.

63. DAVID LUBAN, LAWYERS AND JUSTICE: AN ETHICAL STUDY 301 (1988).

64. See supra note 18 and accompanying text.

65. See Burbank & Farhang, supra note 16, at 1508-10, 1509 tbl.1 (finding that the bulk of

anti–class-action bill activity occurred between 1991 and 2014, and detecting a

statistically significant party effect in favor of anti–class-action measures as

congressional power shifted from Democrats to Republicans).

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were increasingly amenable to these broadsides.

The defense coalition’s

challenges ultimately reached a receptive Supreme Court, which ratcheted up

certification standards for 23(b)(2) and 23(b)(3) class actions.

The Court’s

restrictive interpretation of Rule 23(a)’s commonality requirement went a long

way toward eliminating nationwide employment-discrimination classes.

Its

decisions in two asbestos class-action suits made class certification for most

mass-tort claims impossible.

Choice-of-law issues prevented the certification

of nationwide class actions involving state-law claims.

Consumer classes ran

66. See Gilles, supra note 18, at 397.

67. See, e.g., Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011) (explaining that 23(a)(2)

commonality requires generating “common answers apt to drive the resolution of the

litigation” (emphasis omitted) (quoting Nagareda, supra note 22, at 132)); Comcast

Corp. v. Behrend, 569 U.S. 27, 34 (2013) (holding that a class action could not be certified

absent evidence that damages were common to the class); J. Maria Glover, The Supreme

Court’s “Non-transsubstantive” Class Action, 165 U.

PA. L. REV. 1625, 1626 (2017) (noting

that in Dukes and Comcast, the Supreme Court “increas[ed] the cost and difficulty of

obtaining [class] certification”).

68. See Dukes, 564 U.S. at 357; Scott A. Budow, How the Roberts Court Has Changed Labor and

Employment Law, 2021 U.

ILL. L. REV. ONLINE 281, 285 (describing the reduction in

employment class actions after Dukes and noting that the decision was “undeniably

favorable to employers”); Robert H. Klonoff, Class Actions Part II: A Respite From the

Decline, 92 N.Y.U.

L. REV. 971, 992 (2017) (“[S]everal circuits have held that employment

class actions involving decentralized decision making cannot go forward under Dukes

because of a lack of commonality.”); Michael Selmi & Sylvia Tsakos, Employment

Discrimination Class Actions After Wal-Mart v. Dukes, 48 A

KRON L. REV. 803, 829-30

(2015) (observing that Dukes led plaintiffs “to file smaller regional class actions” rather

than nationwide suits); Terrence Reed, Jacqueline Harding & William Kelly, Employee

Class Actions Four Years After Wal-Mart v. Dukes, 82 D

EF. COUNSEL J. 255, 255-56 (2015)

(observing that Dukes was a victory for employers and made employment-

discrimination class actions smaller and more regional, even if it did not end all such

class actions); Nina Martin, The Impact and Echoes of the Wal-Mart Discrimination Case,

ROPUBLICA (Sept. 27, 2013, 9:53 AM EDT), https://perma.cc/5Z56-4LY6 (noting a

steep drop-off in the filing of employment-discrimination class actions in the two

years after Dukes).

69. See Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 597, 622-28 (1997); Ortiz v.

Fibreboard Corp., 527 U.S. 815, 821 (1999); Burbank & Farhang, supra note 16, at 1522

(noting that “Amchem and Ortiz effectively ended mass tort class actions”); David

Marcus, The Short Life and the Long Afterlife of the Mass Tort Class Action, 165 U.

PA. L.

REV. 1565, 1588 (2017) (“[The Amchem Court] hammered the penultimate nail in the

mass tort class action’s coffin.”); see also Thomas E. Willging & Emery G. Lee III, From

Class Actions to Multidistrict Consolidations: Aggregate Mass-Tort Litigation After Ortiz, 58

KAN. L. REV. 775, 793-99 (2010) (tracing the “increasing importance of MDL

aggregation” for mass-tort claims following Amchem and Ortiz).

70. See Phillips Petrol. Co. v. Shutts, 472 U.S. 797, 799, 814-823 (1985); In re Am. Med. Sys.,

Inc., 75 F.3d 1069, 1085-86 (6th Cir. 1996) (decertifying a nationwide class based in part

on differences in negligence law across jurisdictions).

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up against judicially created certification requirements.

Although a number

of legal justifications were offered for these shifts,

judges’ motivations were

clear to those paying attention: “[I]t is a judicial empathy for the complaint of

corporate defendants that large class actions present a great deal of pressure to

settle cases.”

But the coalition’s goals became more ambitious. Also beginning in the

1980s, the coalition launched a broad initiative to harness private procedural

ordering,

and specifically private contracts for forced arbitration, to all but

eliminate the class action.

During the campaign, the coalition became more

explicit about its normative view that class actions had no place in the

regulatory landscape. In its 2000 brief in Green Tree Financial Corp.-Alabama v.

Randolph,

for instance, the U.S. Chamber of Commerce argued for the

validity of an arbitration agreement in connection with the Truth in Lending

Act because class actions were not critical to the Act’s enforcement regime.

Ten years later, in its amicus brief in AT&T Mobility v. Concepcion, the Chamber

was far less measured: “[W]hether through litigation or arbitration,” it argued,

“class actions . . . [do] not discourage unlawful behavior.”

The Concepcion

Court agreed, holding in 2011 that the FAA preempted any state law

“conditioning the enforceability of arbitration agreements on the availability

of classwide arbitration procedures.”

Critically, this included state

71. See, e.g., Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 592-94 (3d Cir. 2012) (joining

other circuits by introducing an ascertainability requirement into the class-

certification inquiry).

72. Cf., e.g., Gilles, supra note 47, at 388-89 (describing the “plausible but shaky” doctrinal

underpinnings of the decertification cases).

73. Id. at 389; see, e.g., In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1298 (7th Cir. 1995)

(explaining that class certification would put the defendants under “intense pressure to

settle”); AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 350 (2011) (noting that class

action and class arbitration can both produce in terrorem settlement effects).

74. The term “procedural private ordering” was first used in the scholarly literature by

Jaime Dodge to refer to the modification or elimination of procedure through private

contract. See Dodge, supra note 45, at 724-26.

75. See, e.g., Gilles, supra note 47, at 393-96; J. Maria Glover, Feature: Arbitration,

Transparency, and Privatization, Disappearing Claims and the Erosion of Substantive Law,

124 Y

ALE L.J. 3052, 3064-68 (2015); Judith Resnik, Feature: Arbitration, Transparency,

and Privatization, Diffusing Disputes: The Public in the Private of Arbitration, the Private in

Courts, and the Erasure of Rights, 124 Y

ALE L.J. 2804, 2872-74 (2015).

76. 531 U.S. 79 (2000).

77. Brief of the Chamber of Commerce of the United States of America as Amicus Curiae

in Support of Petitioners at 1-4, Green Tree Fin. Corp, 531 U.S. 79 (No. 99-1235), 2000 WL

744157.

78. Brief of the Chamber of Commerce of the United States of America as Amicus Curiae

in Support of Petitioner at 3, Concepcion, 563 U.S. 333 (No. 09-893), 2010 WL 3167313

[hereinafter Concepcion Chamber of Commerce Brief].

79. 563 U.S. at 336-38, 344, 352.

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1301

unconscionability doctrines. Under the FAA, arbitration agreements are “valid,

irrevocable, and enforceable, save upon such grounds as exist at law or in equity

for the revocation of any contract.”

Unconscionability is, of course, one such

ground for contract revocation.

Prior to its watershed decision in Concepcion, the Supreme Court had

already been moving in the defense bar’s direction regarding arbitration and

the class action. In Stolt-Nielsen S.A. v. AnimalFeeds International Corp.,

decided

one year before Concepcion, the Court held that “[a]n implicit agreement to

authorize class-action arbitration . . . is not a term that the arbitrator may infer

solely from the fact of the parties’ agreement to arbitrate.”

This is an

astonishing statement. The agreement at issue in Stolt-Nielsen specified that

arbitrators would determine whether the claimants could proceed as a class.

Yet the Court took it upon itself to impose its own crabbed understanding of

what arbitration entails.

Moreover, the Court’s determination in Stolt-Nielsen that “arbitration”

under the FAA meant “bilateral arbitration,” not class arbitration, flowed

directly from an all-but-explicit judgment that class arbitrations were

normatively undesirable.

The Court made this judgment fully explicit in

Concepcion:

[C]lass arbitration greatly increases risks to defendants. . . . [W]hen damages

allegedly owed to tens of thousands of potential claimants are aggregated and

decided at once, the risk of an error will often become unacceptable. Faced with

even a small chance of a devastating loss, defendants will be pressured into

settling questionable claims.

Arbitration lacks the “multilayered review” of judicial proceedings,

particularly those involving class certification,

so it is conceivable that the

Court could have limited its disdain for class actions to those that occur in

arbitration. But it did not. The Court instead made clear that its negative view

of class actions was far broader: “[C]ourts have noted the risk of ‘in terrorem’

80. 9 U.S.C. § 2 (emphasis added).

81. 559 U.S. 662 (2010).

82. Id. at 685.

83. Id. at 668-69 (“The parties entered into a supplemental agreement providing for the

question of class arbitration to be submitted to a panel of three arbitrators . . . .”).

84. See id. at 685-87 (“[C]lass-action arbitration changes the nature of arbitration to such a

degree that it cannot be presumed the parties consented to it by simply agreeing to

submit their disputes to an arbitrator. . . . And the commercial stakes of class-action

arbitration are comparable to those of class-action litigation, even though the scope of

judicial review is much more limited.” (citations omitted)).

85. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 350 (2011).

86. See id.

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1302

settlements that class actions entail, and class arbitration would be no

different.”

Together, the opinions in Stolt-Nielsen and Concepcion achieved a bit of a

statutory-interpretation sleight of hand. The Court defined arbitration as

“bilateral arbitration”—based on its own normative judgment about the in

terrorem settlement effects of class actions—and injected that new definition

into the meaning of “arbitration” in the FAA. This maneuver was of profound

consequence: The notion that the FAA defines “arbitration” as bilateral, non-

class, private dispute resolution was the cornerstone of the defense coalition’s

revolution and counterrevolution strategy.

The coalition’s movement reached its apex when the Supreme Court

decided American Express Co. v. Italian Colors Restaurant

in 2013. The Court in

Italian Colors made clear that the statutory term “arbitration”—explicitly

defined as both bilateral and anti–class action—applied regardless of whether

arbitration would eliminate claims.

Before Italian Colors, the Supreme Court

had strongly suggested, and courts of appeals had held, that contractual

provisions foreclosing the “effective vindication” of federal statutory claims

could not be enforced.

Italian Colors came to the Court with a factual record

demonstrating that it would be wholly uneconomical for most American

Express–accepting merchants to assert their federal antitrust claims on an

individual basis (as required by their contract).

Nonetheless, the Court

rejected the effective-vindication principle,

holding that the FAA required

courts to “‘rigorously enforce’ arbitration agreements according to their

terms.”

If enforcement of the agreement eliminated statutory claims, that was

“[t]oo darn bad.”

The Court’s decisions in Stolt-Nielsen, Concepcion and Italian

Colors represent the culmination of the defense bar’s near-total victory in the

arbitration revolution and class-action counterrevolution.

87. Id. (citation omitted).

88. 570 U.S. 228 (2013).

89. See id. at 231-32, 235-38.

90. See 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 273-74 (2009); Kristian v. Comcast Corp.,

446 F.3d 25, 29 (1st Cir. 2006); In re Am. Express Merchs.’ Litig., 667 F.3d 204, 214, 219

(2d Cir. 2012), rev’d sub nom. It. Colors, 570 U.S. 228; see also Green Tree Fin. Corp.-Ala. v.

Randolph, 531 U.S. 79, 90-92 (2000) (stating that arbitration agreements are enforceable

so long as “the prospective litigant effectively may vindicate [his or her] statutory cause

of action in the arbitral forum” (alteration in original) (quoting Gilmer v.

Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991))).

91. It. Colors, 570 U.S. at 231-32.

92. See id. at 235-38.

93. Id. at 233 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221 (1985)).

94. Id. at 240 (Kagan, J., dissenting); cf. id. at 236 (majority opinion) (“[T]he fact that it is not

worth the expense involved in proving a statutory remedy does not constitute the

elimination of the right to pursue that remedy.”).

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The Court has only reinforced and expanded the scope of its arbitration

jurisprudence since deciding Italian Colors. Notably, in 2018, a 5–4 majority

held in Epic Systems Corp. v. Lewis that employment contracts could require

employees to pursue their claims individually in arbitration despite a federally

guaranteed right to collective action under the National Labor Relations Act

(NLRA).

The holding in Epic Systems was a stinging blow to American

workers. But in broader context, it merely confirmed what was largely

understood in the civil justice landscape after Concepcion and Italian Colors:

Corporate entities could use private procedural ordering to avoid civil liability

for wrongdoing.

Of course, that was always the gambit.

C. The Aftermath

Today, virtually all Americans are subject to forced arbitration agreements

with class-action waivers.

They are ubiquitous: in employee handbooks,

nursing home admissions forms, credit card bills, cell phone statements,

insurance contracts, housing leases, job applications, and countless other

contracts.

Indeed, the changes in the legal landscape brought about by the arbitration

revolution have been staggering. In the early 1990s, only 2% of nonunionized

employee contracts contained arbitration clauses.

As of 2019, more than half

of such contracts included them.

According to a 2017 study, some 40% of

95. 138 S. Ct. 1612, 1619 (2018). Epic Systems grew out of a decision by the National Labor

Relations Board (NLRB) that class-action waivers in mandatory arbitration

agreements violated the NLRA’s collective-action guarantee. D.R. Horton, Inc., 357

N.L.R.B. 2277, 2277 (2012). Circuits split as to whether the NLRB decision was correct.

Compare D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 362 (5th Cir. 2013) (disagreeing with

the NLRB), with Lewis v. Epic Sys. Corp., 823 F.3d 1147, 1154-57 (7th Cir. 2016)

(agreeing with the NLRB), rev’d, 138 S. Ct. 1612.

96. See Senate Arbitration Hearing, supra note 9 (statement of Myriam Gilles, Professor,

Benjamin N. Cardozo School of Law).

97. See Myriam Gilles & Gary Friedman, After Class: Aggregate Litigation in the Wake of

AT&T Mobility v Concepcion, 79

U. CHI. L. REV. 623, 627 (2012); see also Jean R.

Sternlight, Disarming Employees: How American Employers Are Using Mandatory

Arbitration to Deprive Workers of Legal Protection, 80 B

ROOK. L. REV. 1309, 1310 (2015).

98. See Mary Martin, Note, When Flexibility Sacrifices Security: An Analysis of Amazon’s Flex

Program, 54 N

EW ENG. L. REV. 131, 144 (2019).

99. Id.; see also ALEXANDER J.S. COLVIN, ECON. POL’Y INST., THE GROWING USE OF

MANDATORY ARBITRATION 2 (2018), https://perma.cc/TB4G-952Z (noting that 53.9% of

nonunion private-sector employers have mandatory arbitration procedures).

According to the U.S. Bureau of Labor Statistics, 10.8% of American wage and salary

workers (14.3 million individuals) were members of unions as of 2020. Less than 7% of

private-sector workers were union members as of that year. Press Release, U.S. Bureau

footnote continued on next page

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private-sector employers with mandatory arbitration clauses had adopted

them in the previous five years.

100

A more recent study showed that seventy-

eight companies in the Fortune 100 use arbitration agreements with class-

action waivers.

101

Analysts predict that by 2024, more than 80% of private-

sector nonunion workers will be subject to such agreements.

102

From 2011 to 2019, the number of businesses that used arbitration

agreements with class-action waivers in their consumer contracts tripled.

103

Today, as many as 76.9% of consumer contracts include pre-dispute arbitration

clauses;

104

virtually all of these include class-action waivers.

105

The Consumer

Financial Protection Bureau (CFPB) found mandatory arbitration agreements

in 53% of credit card contracts, 98.5% of storefront payday-loan contracts, and

99.9% of mobile-wireless contracts,

106

and it noted that these agreements

“generally extinguish the consumer’s ability to participate in class lawsuits.”

107

In 2020, Consumer Reports found that over two-thirds of the most popular

products on its website came with mandatory arbitration clauses.

108

The widespread use of forced arbitration agreements with class-action

waivers has enabled corporations to reduce costs by eliminating aggregate

of Lab. Stat., Union Membership (Annual) News Release (Jan. 22, 2021),

https://perma.cc/Y789-VFYG.

100. See Alexander J.S. Colvin, Piper Lecture, The Metastasization of Mandatory Arbitration, 94

HI.-KENT. L. REV. 3, 8, 10-11 (2019).

101. Imre Stephen Szalai, The Prevalence of Consumer Arbitration Agreements by America’s Top

Companies, 52 U.C.

DAVIS L. REV. ONLINE 233, 234 (2019).

102. KATE HAMAJI, RACHEL DEUTSCH, ELIZABETH NICOLAS, CELINE MCNICHOLAS, HEIDI

SHIERHOLZ & MARGARET POYDOCK, CTR. FOR POPULAR DEMOCRACY & ECON. POL’Y INST.,

NCHECKED CORPORATE POWER: FORCED ARBITRATION, THE ENFORCEMENT CRISIS, AND

HOW WORKERS ARE FIGHTING BACK 1 (2019), https://perma.cc/Q4UB-6VZZ.

103. Ryan Miller, Current Development 2018-2019, Next-Gen Arbitration: An Empirical Study

of How Arbitration Agreements in Consumer Form Contracts Have Changed After

Concepcion and American Express, 32 G

EO. J. LEGAL ETHICS 793, 795, 806, 824-25 (2019).

This finding is consistent with the Consumer Financial Protection Bureau’s 2015

finding that arbitration agreements typically preclude consumer class actions. CFPB,

ARBITRATION STUDY § 3.4.3, at 24, § 4.8, at 20-21 (2015).

104. See Theodore Eisenberg, Geoffrey P. Miller & Emily Sherwin, Arbitration’s Summer

Soldiers: An Empirical Study of Arbitration Clauses in Consumer and Nonconsumer

Contracts, 41 U.

MICH. J.L. REFORM 871, 883 tbl.2 (2008).

105. Id. at 884 tbl.3.

106. CFPB, supra note 103, § 2.3, at 8 tbl.1.

107. Id. § 3.4.3, at 24.

108. Scott Medintz, Forced Arbitration: A Clause for Concern, CONSUMER REPS. (Jan. 30, 2020),

https://perma.cc/D5QE-W7KR.

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claims altogether.

109

Accordingly, the defense bar routinely and publicly

advises clients to “avoid [the] risk” of class actions by requiring arbitration

agreements.

110

Indeed, for businesses not yet using them, the question is:

“Shouldn’t you be using arbitration agreements to reduce . . . the risk of class

action claims?”

111

And no wonder: Eliminating aggregate claims also tends to eliminate

claims generally. Studies have found that almost no one pursues individual

arbitration.

112

Although there were about 826,537,000 consumer arbitration

provisions in effect in 2018, the AAA and JAMs recorded only 6,000 consumer

arbitrations that year.

113

Without mandatory arbitration, consumers likely

would have brought many more claims.

114

One 2018 study found that, if

employees filed arbitration claims at the same rate they filed claims in court,

some 320,000 to 727,000 employment arbitration claims would be filed

annually—around 60 to 140 times the current rate.

115

That means forced

arbitration has eliminated more than 98% of employment claims.

116

A recent

study by the Economic Policy Institute reinforces these findings: Of workers

with potentially meritorious claims subject to forced arbitration, virtually

none pursue those claims. Indeed, only 1 in 10,400 employees subject to forced

arbitration files a claim each year.

117

Individuals tend to fare poorly even when they do arbitrate,

118

a fact many

attribute to the repeat-player advantages that corporate entities enjoy in

109. Cf. Edward Wood Dunham, The Arbitration Clause as Class Action Shield, 16 FRANCHISE

L.J. 141, 141-42 (1997) (urging franchisors to use arbitration to prevent “catastrophic”

class actions by franchisees).

110. See, e.g., Robert Fojo, 12 Reasons Businesses Should Use Arbitration Agreements, LEGAL.IO,

(Apr. 1, 2015), https://perma.cc/U5NK-HLA9.

111. Jay N. Varon & Jennifer M. Keas, Shouldn’t You Be Using Arbitration Agreements to Reduce

the Costs of Litigation and the Risk of Class Action Claims?, F

OLEY & LARDNER LLP

(May 10, 2017) (capitalization altered), https://perma.cc/X6AX-YCD3.

112. See, e.g., Colvin, supra note 100, at 17-18 (“Mandatory arbitration has a tendency to

suppress claims.”); see also Dunham, supra note 109 at 141.

113. See Justice Restored: Ending Forced Arbitration and Protecting Fundamental Rights: Hearing

Before the Subcomm. on Antitrust, Com., & Admin. L. of the H. Comm. on the Judiciary, 117th

Cong. (2021) [hereinafter House Arbitration Hearing] (statement of Myriam Gilles,

Professor, Benjamin N. Cardozo School of Law), https://perma.cc/V4YS-YZ2K; see also

Szalai, supra note 101, at 238.

114. See CFPB, supra note 103, § 1.4.3, at 11, § 1.4.7, at 16 (noting that less than 2,000

consumer arbitration claims were filed with the AAA between 2010 and 2012, while

comparable class actions from 2008 to 2012 involved hundreds of millions of claims).

115. Estlund, supra note 38, at 696-97.

116. Id. at 696.

117. COLVIN, supra note 99, at 11.

118. See Estlund, supra note 38, at 688. But see Ariana R. Levinson, What the Awards Tell Us

About Labor Arbitration of Employment-Discrimination Claims, 46 U.

MICH. J.L. REFORM

footnote continued on next page

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1306

arbitration.

119

Indeed, the CFPB found that businesses won 93% of business-

initiated arbitrations and recovered ninety-one cents per dollar claimed,

whereas consumers prevailed in about 20% of consumer-initiated arbitrations

and recovered twelve cents per dollar claimed.

120

Similarly, a recent study

found that employees win only 19% of AAA arbitrations,

121

as opposed to

29.7% of federal employment-discrimination cases.

122

Sexual-harassment

claimants also tend to fare worse in arbitration than they do in litigation,

particularly with regard to remedies.

123

One study found that, over thirty

years and across ninety-seven industry arbitrations, only seventeen women on

Wall Street explicitly won their sexual-harassment claims.

124

Critics of the above studies argue that the CFPB and others overstate the

extent to which the judicial system is a “realistic means for obtaining

789, 858 (2013) (finding that some low-wage workers were able to use arbitration to

vindicate their claims).

119. See, e.g., Carrie Menkel-Meadow, Do the “Haves” Come Out Ahead in Alternative Judicial

Systems?: Repeat Players in ADR, 15 O

HIO ST. J. ON DISP. RESOL. 19, 32-33, 38-39 (1999)

(noting that “representatives of consumers, patients, employees, and other individual

claimants” believe arbitration “redound[s] to the benefit of repeat players,” including

corporations); Marc Galanter, Why the “Haves” Come Out Ahead: Speculations on the Limits

of Legal Change, 9 L

AW & SOC’Y REV. 95, 98 (1974) (explaining that, among other

advantages, the prototypical repeat player “anticipates repeated litigation,” “has low

stakes in the outcome of any one case,” and “has the resources to pursue its . . .

interests”); see also Interview with Nancy Erika Smith, supra note 41 (observing that

arbitrators are often former defense lawyers and that businesses enjoy important

advantages in arbitration); Letter from Nancy Erika Smith, Att’y, Smith Mullin, P.C.,

to Laura E. VanEtten, Supervisor, Am. Arb. Ass’n & Linda S. Hendrickson, Case

Manager, Am. Arb. Ass’n 2-3 (Jan. 14, 2011) (on file with author) (seeking to strike

defense attorneys and litigation adversaries from a list of possible arbitrators).

120. CFPB, supra note 103, § 5.6.6, at 41-42, § 5.6.7, at 43-45.

121. Alexander J.S. Colvin & Mark D. Gough, Individual Employment Rights Arbitration in the

United States: Actors and Outcomes, 68 ILR

REV. 1019, 1028 tbl.1 (2015).

122. Estlund, supra note 38, at 688. Earlier studies reached similar findings. See, e.g.,

Alexander J.S. Colvin, An Empirical Study of Employment Arbitration: Case Outcomes and

Processes, 8 J.

EMPIRICAL LEGAL STUD. 1, 5 tbl.1 (2011) (reporting a 21.4% employee win

rate in AAA employment arbitration); Theodore Eisenberg & Elizabeth Hill, Arbitration

and Litigation of Employment Claims: An Empirical Comparison, D

ISP. RESOL. J., Nov.

2003/Jan. 2004, at 44, 48 tbl.1 (finding a 36.4% employee win rate in federal

employment-discrimination cases and a 56.6% employee win rate in state non–civil

rights employment cases).

123. See Reginald Alleyne, Arbitrating Sexual Harassment Grievances: A Representation Dilemma

for Unions, 2 U.

PA. J. LAB. & EMP. L. 1, 2-6 (1999) (describing “inadequate . . . arbitration

remedies for sexual harassment” and noting that victims’ remedies can be limited by

arbitration agreements themselves).

124. See Susan Antilla, FINRA’s Black Hole, TYPE INVESTIGATIONS (Apr. 18, 2018),

https://perma.cc/HTC5-6AWN.

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redress,”

125

an assertion consistent with the findings of key legal scholars.

126

Critics also challenge the empirical findings of the CFPB and academic

commentators as incomplete, inasmuch as those findings do not take into

account the number of claims that are resolved by pre-dispute settlements

secured before the filing of formal arbitral demands.

127

Given the significant

filing fees in arbitration, critics are likely correct that corporations have

incentives to settle claims via pre-dispute resolution.

It is not arbitration alone, however, that eliminates most claims. Instead, it

is the combination of forced arbitration and class-action waivers in contracts

of adhesion. The types of claims that tend to arise from these contracts—civil

rights claims, wage-theft claims, workplace sexual-harassment claims, and

consumer-fraud claims—are those that tend to gain viability from

aggregation.

128

Most discrimination suits, for instance, depend on aggregation

in order to be feasible, as the Advisory Committee explicitly recognized when

promulgating Rule 23 of the Federal Rules of Civil Procedure in 1966.

129

The

same is true for wage-and-hour claims under the FLSA, and the FLSA

explicitly enables collective action for that reason.

130

At least to the extent that the arbitration revolution eliminates classable

claims, the implications are troubling: Elimination of those claims would tend

to be due to the economics of claiming,

131

not due to their underlying merits.

Again, individually unmarketable does not mean meritless; individually

marketable does not mean meritorious. Settlement pressure is perfectly

desirable when produced by the merits of claims.

132

It is only undesirable—or

125. The CFPB’s Flawed Arbitration “Study” 1 (n.d.), https://perma.cc/A4RF-3NFW.

126. See Eisenberg & Hill, supra note 122, at 53 (“In the majority of court actions the cases

likely were brought by highly paid employees, while in the arbitrations, high-pay

employees represented only a minority of the claimants.”).

127. The CFPB’s Flawed Arbitration “Study,” supra note 125, at 11.

128. See David S. Schwartz, Claim-Suppressing Arbitration: The New Rules, 87 IND. L.J. 239, 241-

42 (2012); Brittany Cangelosi, Note, Wage War: Arbitration and Class Action Waivers at

the Expense of Wage and Hour Claims, 48 H

OFSTRA L. REV. 483, 488 (2019).

129. See Interview by Samuel Issacharoff with Arthur R. Miller, Professor, N.Y. Univ. Sch.

of L., in N.Y.C., N.Y. (Dec. 3, 2016), reprinted in N.Y.

UNIV. SCH. OF L. CTR. ON CIV. JUST.,

RULE 23 @ 50: THE 50TH ANNIVERSARY OF RULE 23, at 1, 5 (Peter Zimroth, Arthur R.

Miller, Samuel Issacharoff & David Siffert eds., 2016).

130. See supra note 7 and accompanying text; see also SEYFARTH SHAW LLP, 13TH ANNUAL

WORKPLACE CLASS ACTION LITIGATION REPORT 20 (2017), https://perma.cc/JT3H-

4ZRZ (“Virtually all FLSA lawsuits are filed as collective actions . . . .”).

131. See Alexander J.S. Colvin, Mandatory Arbitration and Inequality of Justice in Employment,

35 B

ERKELEY J. EMP. & LAB. L. 71, 84-85 (2014).

132. See J. Maria Glover, The Federal Rules of Civil Settlement, 87 N.Y.U. L. REV. 1713, 1750-78

(2012) (arguing that the Federal Rules of Civil Procedure should be recalibrated to align

settlement values with the merits of underlying claims); Richard A. Nagareda,

Aggregation and Its Discontents: Class Settlement Pressure, Class-Wide Arbitration, and

footnote continued on next page

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in terrorem—when it derives in whole or substantial part from factors

unrelated to the merits of claims.

133

The fact that a claim’s value is less than the

cost of pursuing that claim says nothing of the claim’s worth. It may say

something about the high cost of litigation.

134

It may also reveal something

about the type of claim, the type of claimant, or both—for instance, that the

claim is for wage theft by a minimum-wage worker. All of that is orthogonal

to whether the claims have legal merit.

135

Many claims eliminated by forced arbitration and class-action waivers,

then, are not so much low merit as they are low value. For a majority of the

Supreme Court, though, those two may as well be the same thing. In essence,

the Supreme Court’s FAA jurisprudence deems a broad range of legal

entitlements the wrong types of claims, and by extension, effectively deems a

broad swath of Americans—and in particular, racial minorities, women, and

the working poor

136

—the wrong types of claimants.

Mandatory arbitration clauses appear more frequently in contracts for

frontline jobs like education and healthcare.

137

They are also more common in

“low-wage workplaces” and industries that are “disproportionately composed

CAFA, 106 COLUM. L. REV. 1872, 1894 (2006) (“What one should make of the

amplification effect [of aggregation] in normative terms depends crucially on what

explanation one embraces for the underlying probability of plaintiff success that

aggregation would amplify.”).

133. See Glover, supra note 132, at 1727-44 (tracing the numerous ways that non-merits

“distortions” can affect settlement values).

134. See Samuel Estreicher, Dwight D. Opperman Professorship Inaugural Lecture, Beyond

Cadillacs and Rickshaws: Towards a Culture of Citizen Service, 1 N.Y.U.

J.L. & BUS. 323, 329-

30 (2005) (describing the “[m]ushrooming” costs of litigation); see also Robert Bovarnick,

When Is Litigation Worth the Hassle?, F

ORBES (July 21, 2010, 6:40 PM EDT),

https://perma.cc/RG3B-MN4T (noting that the hardest decision for a claimant is

whether litigation is worth the high cost, and that in many cases it is more

economically rational to settle).

135. In fact, research shows that the filing of meritless claims to extract shakedown

settlements is rare. See, e.g., Charles Silver, “We’re Scared to Death”: Class Certification and

Blackmail, 78 N.Y.U.

L. REV. 1357, 1359 (2003) (“[T]he risks of . . . blackmail settlements

have been overstated.” (alterations in original) (quoting Bruce Hay & David Rosenberg,

“Sweetheart” and “Blackmail” Settlements in Class Actions: Reality and Remedy, 75 N

OTRE

DAME L. REV. 1377, 1379 (2000))); John C. Coffee, Jr., Rescuing the Private Attorney

General: Why the Model of the Lawyer as Bounty Hunter Is Not Working, 42 M

D. L. REV.

215, 225-26 (1983) (stating that, if anything, certain class actions settle too cheaply);

Warren F. Schwartz, Long-Shot Class Actions: Toward a Normative Theory of Legal

Uncertainty, 8 L

EGAL THEORY 297, 298 (2002) (“[T]he hostility to ‘long-shot’ class actions

is . . . unsupported on any basis currently articulated in judicial opinions or legal

scholarship.”).

136. A Profile of the Working Poor, 2019, U.S. BUREAU LAB. STAT.: BLS REPS. (May 2021),

https://perma.cc/2MVM-966N.

137. COLVIN, supra note 99, at 8.

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of women . . . [and] African American workers.”

138

Indeed, 59.1% of African

American workers—7.5 million individuals—are subject to mandatory

arbitration agreements that tend to eliminate claims.

139

Along similar lines, 57.6% of women in the workforce are subject to

mandatory arbitration agreements.

140

These agreements suppress a host of

claims, from wage theft to gender discrimination to sexual harassment.

Notably, forced arbitration agreements tend to prevent sexual-assault and

sexual-harassment survivors from speaking up about their experiences.

141

This is true even (and perhaps especially) when well-known, well-capitalized

claimants are involved. Famously, Donald Trump used a mandatory

arbitration clause to help fend off a lawsuit by Stormy Daniels.

142

And Fox

News used forced arbitration to silence scores of women who were sexually

harassed by Roger Ailes.

143

Although forced arbitration has come under

scrutiny following its use in a range of cases involving sexual harassment

allegedly perpetrated by famous men,

144

companies have only recently started

to move away from forced arbitration, and even then only in response to

sustained public outcry.

145

Publicly, corporations #MeToo their websites and don “Time’s Up”

ribbons. Privately, many corporations continue to subject their employees to

138. Id. at 2.

139. Id. at 9. By comparison, only 55.6% of white, non-Hispanic workers are subject to

mandatory arbitration agreements. Id.

140. Id. at 8-9. By comparison, only 53.5% of men in the workforce are subject to mandatory

arbitration agreements. Id. at 9.

141. See Rachel M. Schiff, Note, Not So Arbitrary: Putting an End to the Calculated Use of Forced

Arbitration in Sexual Harassment Cases, 53 U.C.

DAVIS L. REV. 2693, 2709-14 (2020);

Gretchen Carlson, Opinion, After Bill Cosby and Fox News, Something Good Is Going to

Come of This, USA

TODAY (updated July 6, 2021, 4:21 PM ET), https://perma.cc/3ZNK-

HWBA (describing how forced arbitration “can cover up, and allow for, repeated ugly

behavior from harassers in every industry”).

142. See Jeremy Stahl, Donald Trump Basically Just Said He Should Lose the Litigation with

Stormy Daniels, S

LATE (Apr. 5, 2018, 9:54 PM), https://perma.cc/MM63-C35P.

143. See Emily Martin, Keeping Sexual Assault Under Wraps, U.S. NEWS & WORLD REP.

(Sept. 28, 2016, 2:10 PM), https://perma.cc/VV93-D3FD.

144. See id.; Hiba Hafiz, How Legal Agreements Can Silence Victims of Workplace Sexual Assault,

TLANTIC (Oct. 18, 2017), https://perma.cc/C6V5-SF85; cf. Carlson, supra note 141

(noting that highly publicized sexual-harassment scandals can draw greater societal

attention to the forced arbitration of workplace harassment claims). But cf. Inez

Feltscher Stepman, Once Again, #MeToo Becomes Political Tool to Line Lawyer Pockets,

NDEP. WOMEN’S F. (Sept. 21, 2021), https://perma.cc/V8U2-ZK7D (arguing that “the

issue of sexual assault has been politically weaponized” to harm arbitration, which the

author states may be good for employees).

145. See Jena McGregor, New Database Aims to Expose Companies that Make Employees

Arbitrate Sexual Harassment Claims, W

ASH. POST (Feb. 27, 2020), https://perma.cc/5GTF-

42P7.

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forced arbitration and class-action waivers.

146

Some states have taken steps to

limit forced arbitration for sexual-harassment claims.

147

At the federal level,

Representatives Pramila Jayapal (D-WA), Cheri Bustos (D-IL), and Morgan

Griffith (R-VA), and Senators Kirsten Gillibrand (D-NY), Lindsey Graham (R-

SC), and Dick Durbin (D-IL) introduced the Ending Forced Arbitration of

Sexual Harassment Act in July 2021.

148

That bill has since passed both Houses

of Congress,

149

but work to ameliorate forced arbitration’s disproportionate

impact on women remains.

The arbitration revolution has also disproportionately impacted the

working poor, many of whom are racial minorities and women. One 2021

study found that forced arbitration helped employers pocket $9.2 billion from

workers in low-paid jobs in 2019 alone.

150

Arbitration is almost always too

expensive for typical wage-and-hour employees to pursue, and employees are

routinely dismayed to learn that no attorney can afford to represent them in

light of forced arbitration agreements and class-action waivers.

151

And the

conclusion that the Supreme Court’s arbitration jurisprudence effectively

deems the working poor the “wrong type of claimant” is hard to avoid when

comparing it to the Court’s class-action–friendly jurisprudence for securities

fraud.

152

146. Some corporations (for example, Facebook, Google, Microsoft, and Uber) have

responded to public pressure by rolling back forced arbitration, particularly for claims

of sexual harassment. Abha Bhattarai, As Closed-Door Arbitrations Soared Last Year,

Workers Won Cases Against Employers Just 1.6 Percent of the Time, W

ASH. POST (Oct. 27,

2021, 7:00 AM EDT), https://perma.cc/YY95-U7BD. Many others, however, have

“doubled down” on the practice. Id.; see A

M. ASS’N FOR JUST., FORCED ARBITRATION

DURING A PANDEMIC: CORPORATIONS DOUBLE DOWN 4, 6 (2021), https://perma.cc/3JFT-

W9VM.

147. See Kathleen McCullough, Note, Mandatory Arbitration and Sexual Harassment Claims:

#MeToo- and Time’s Up–Inspired Action Against the Federal Arbitration Act, 87 F

ORDHAM L.

REV. 2653, 2677-83 (2019).

148. Press Release, Rep. Pramila Jayapal, Jayapal Helps Reintroduce Bipartisan Ending

Forced Arbitration of Sexual Assault and Sexual Harassment Act (July 14, 2021),

https://perma.cc/4UFG-TDL6.

149. Emily Peck & Sophia Cai, Congress Passes Landmark #MeToo Bill, AXIOS (updated Feb. 10,

2022), https://perma.cc/SVF3-Y4C3.

150. See HUGH BARAN & ELISABETH CAMPBELL, NAT’L EMP. L. PROJECT, FORCED ARBITRATION

HELPED EMPLOYERS WHO COMMITTED WAGE THEFT POCKET $9.2 BILLION IN 2019 FROM

WORKERS IN LOW-PAID JOBS 1 (rev. 2021), https://perma.cc/LB8K-S3QZ.

151. See, e.g., Estlund, supra note 38, at 700-02; Interview with Nancy Erika Smith, supra

note 41 (“Minimum-wage workers get screwed by arbitration. . . . [An arbitration

agreement with a] class-action waiver is the first thing lawyers look for.”); Interview

with Cory L. Zajdel, supra note 40 (observing that lawyers screen out consumer cases

with arbitration agreements).

152. See Glover, supra note 67, at 1628-33 (describing the Supreme Court’s tendency toward

“pro–class action” opinions in the securities-fraud context); Brian T. Fitzpatrick, The

footnote continued on next page

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All told, the defense coalition’s decades-long effort to retrench aggregate

dispute resolution through arbitration agreements and class-action waivers

resulted in a resounding victory for corporate interests. But that victory was a

tremendous loss for consumers and employees, particularly those who were

already vulnerable based on race, gender, and class.

II. Can’t Stop The Revolution: Public-Reform Pitfalls, Private-

Reform Possibilities

As the prior Part detailed, the arbitration revolution and class-action

counterrevolution had sweeping effects on the civil justice landscape. For over

a decade, legal commentators, legislators, policymakers, interest-group

advocates, the plaintiffs’ bar, and others have called for reform, largely from

Congress. As Subpart A below details, however, few public procedural-reform

efforts have succeeded, and none have provided a meaningful response to the

arbitration revolution. Given public procedural ordering’s inability to stem the

arbitration revolution’s tide, the general perception has been that arbitration

agreements with class-action waivers are (and will remain) near-bulletproof

claim eliminators.

153

My analysis of the Supreme Court’s arbitration jurisprudence in

Subpart B, however, challenges this view. I do not think reform by way of

public procedural ordering is particularly likely to occur, at least not on any

broad scale. Instead, it is my long-held view that the Court’s FAA

jurisprudence—broad as it may be—left narrow room for a private procedural

response to the arbitration revolution. It left room for a procedural offensive

like mass arbitration.

A. The Failure of Public Procedural-Ordering Efforts

In one of her very last dissents, the late Justice Ginsburg recognized that

the Court’s reading of the FAA

154

had reached, in the words of one

End of Class Actions?, 57 ARIZ. L. REV. 161, 181 (2015) (noting that securities fraud is the

one “exception” to the arbitration revolution’s elimination of claims).

153. See, e.g., Effron, supra note 44, at 136 (explaining that although certain substantive

rights may exist in theory, they are eliminated in practice through class-action

waivers); Fitzpatrick, supra note 152, at 162-63 (concluding that, given Concepcion,

“businesses will eventually be able to eliminate virtually all class actions that are

brought against them”); Resnik, supra note 75, at 2836-40 (describing certain waivers as

erasing substantive rights); Gilles & Friedman, supra note 97, at 628 (questioning

whether any grounds remain for finding class-action waivers unenforceable).

154. For criticisms of the Court’s reading, see, for example, Anthony J. Sebok, The Unwritten

Federal Arbitration Act, 65 D

EPAUL L. REV. 687, 688, 720 (2016) (arguing that the FAA

supports “a substantive theory of arbitration” and suggesting that states “can

experiment with different interpretations of the FAA’s theory”); and Aragaki, supra

footnote continued on next page

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commentator, a “critical tipping point.”

155

Accordingly, Justice Ginsburg

“urgently” pled for “‘[c]ongressional correction of the Court’s elevation of the

FAA over’ the rights of employees and consumers ‘to act in concert.’”

156

Justice

Ginsburg no doubt knew that her plea to Congress was a long shot. For

decades, Congress has been presented with opportunity upon opportunity to

reform arbitration through “arbitration-fairness” bills. Almost all have died in

committee.

157

And though Congress in 2010 passed the Dodd–Frank Act and

created the CFPB, which it directed to study mandatory arbitration

agreements,

158

hope for reform was short-lived. The CFPB formulated a rule

that restricted the use of class-action waivers,

159

but the Senate rejected it

51–50 under the Congressional Review Act. Then–Vice President Mike Pence,

himself no stranger to the business community,

160

cast the tiebreaking vote.

161

While the narrow Ending Forced Arbitration of Sexual Harassment Act,

which had rare bipartisan support, finally passed in February 2022,

162

the

Forced Arbitration Injustice Repeal (FAIR) Act, a sweeping arbitration-reform

bill, remains in the Senate Judiciary Committee.

163

The defense coalition is

actively fighting the FAIR Act; the Chamber of Commerce has even offered to

note 51, at 1946-53 (arguing that the Supreme Court’s expansive reading of the FAA is

based on “isolated snippets” of legislative history that do not correctly capture the

history and purpose of the law). But see Amalia D. Kessler, Feature: Arbitration,

Transparency, and Privatization, Arbitration and Americanization: The Paternalism of

Progressive Procedural Reform, 124 Y

ALE L.J. 2940, 2943-44, 2991 (2015) (noting that, in

part because of the FAA’s progressive history, efforts to determine whether the Act

was intended to enable access to justice or empower corporate elites are “bound to

disappoint”).

155. House Arbitration Hearing, supra note 113 (statement of Myriam Gilles, Professor,

Benjamin N. Cardozo School of Law).

156. Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1422 (2019) (Ginsburg, J., dissenting) (quoting

Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1633 (2018) (Ginsburg, J., dissenting)).

157. Thomas V. Burch, Regulating Mandatory Arbitration, 2011 UTAH L. REV. 1309, 1332-33,

app. (cataloging 139 arbitration bills introduced between 1995 and 2010, most of which

did not make it past the committee stage). “[T]he few [bills] that ultimately passed” from

1995 to 2010 “applied only to relatively narrow categories of disputes.” Id. at 1333.

158. See CFPB, supra note 103, § 1, at 1.

159. Press Release, CFPB, CFPB Issues Rule to Ban Companies from Using Arbitration

Clauses to Deny Groups of People Their Day in Court (July 10, 2017), https://perma.cc/

VG92-9Q9Q.

160. See Jane Mayer, The Danger of President Pence, NEW YORKER (Oct. 16, 2017)

https://perma.cc/Q4GV-TYZC.

161. Zachary Warmbrodt, Pence Breaks Tie in Senate Vote to Ax Arbitration Rule, POLITICO

(updated Oct. 24, 2017, 11:25 PM EDT), https://perma.cc/72KR-9ZQ3.

162. See supra notes 148-49 and accompanying text.

163. See S.505—Forced Arbitration Injustice Repeal Act, CONGRESS.GOV, https://perma.cc/L9R5-

8ECG (archived June 26, 2022).

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1313

pay attorneys if their clients sign op-eds opposing the bill.

164

And although

there have been rumblings of congressional action after forced arbitration

provisions appeared in payments made under the Coronavirus Aid, Relief, and

Economic Security (CARES) Act,

165

the passage of broad arbitration reform

remains unlikely.

166

Congress has introduced more targeted bills on the issue of forced

arbitration with varying success. The Ending Forced Arbitration of Sexual

Harassment Act was one such successful bill. But compare this Act to the

Nursing Home Improvement and Accountability Act of 2021, which would

prohibit forced arbitration clauses in contracts between nursing home facilities

and their patients.

167

Congress has tried to end the use of forced arbitration in

nursing homes for over a decade; the Nursing Home Improvement and

Accountability Act, a Charlie Brown football of a bill, is simply the latest

version of that effort.

168

It is unclear, then, whether Congress will be able to

enact even targeted reforms going forward.

There have been a few modest arbitration-reform successes at the state

level, but none have had a particularly meaningful impact on the post–

arbitration revolution landscape. Some scholars had hoped that suits brought

under the parens patriae doctrine (which provides a state with third-party

standing to bring a case on behalf of its citizens for their well-being) would

help fill the void created by the elimination of class actions.

169

But these suits

164. See Amelia Pollard, Corporate Lobbyists Seek “Grassroots” Support for Forced Arbitration,

M. PROSPECT (Aug. 10, 2021), https://perma.cc/SUF6-MYUG (reporting that the

Chamber of Commerce offered an attorney $2,000 in exchange for a client willing to

sign a prewritten op-ed opposing the FAIR Act); Karl Bode, U.S. Chamber of Commerce

Paying People $2,000 to Pretend Binding Arbitration Is Good, T

ECHDIRT (Aug. 13, 2021,

6:14 AM), https://perma.cc/3932-BXYE (same).

165. See David Dayen, Unsanitized: Stimulus Debit Cards Come with a Forced Arbitration Clause,

M. PROSPECT (June 26, 2020), https://perma.cc/H976-4EYY.

166. See Glover, supra note 75, at 3083-91; David L. Noll & Zachary D. Clopton, An

Arbitration Agenda for the Biden Administration, 2021 U.

ILL. L. REV. ONLINE 104, 105-06;

Mike LaSusa, Dems’ Bid to Ban Workplace Arbitration Faces Uphill Fight, L

AW360 (Aug. 5,

2021, 7:09 PM EDT), https://perma.cc/4MPH-3449 (to locate, select “View the live

page”).

167. See H.R. 5169, 117th Cong. § 105 (2021); S. 2694, 117th Cong. § 105 (2021).

168. See, e.g., Fairness in Nursing Home Arbitration Act of 2008, H.R. 6126, 110th Cong.

(2008); Fairness in Nursing Home Arbitration Act, S. 2838, 110th Cong. (2008); Fairness

in Nursing Home Arbitration Act of 2009, H.R. 1237, 111th Cong. (2009); Fairness in

Nursing Home Arbitration Act, S. 512, 111th Cong. (2009); Fairness in Nursing Home

Arbitration Act of 2012, H.R. 6351, 112th Cong. (2012); Fairness in Nursing Home

Arbitration Act, H.R. 5326, 116th Cong. (2019); Fairness in Nursing Home Arbitration

Act, H.R. 2812, 117th Cong. (2021); see also Glover, supra note 75, at 3090-91 (detailing

the failed legislative efforts to end forced arbitration in various contexts, including in

nursing home contracts, that began in 2008).

169. See Gilles & Friedman, supra note 97, at 629-30, 661.

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are limited by political and resource constraints.

170

As an alternative, private–

attorneys general acts (PAGAs) can circumvent the problems that hinder

parens patriae suits by allowing citizens to take on the mantle of the state and

bring suit, in a representative capacity, against a defendant with whom they

would otherwise be required to arbitrate. California currently has an

employment-litigation PAGA.

171

A number of other states have been

considering similar legislation, but some bills have struggled to gain passage

and the future of PAGA-like laws is uncertain.

172

In addition, the Supreme

170. See, e.g., Jack Ratliff, Parens Patriae: An Overview, 74 TUL. L. REV. 1847, 1857-58 (2000)

(describing how the “political motivations” behind parens patriae decisions can create

“intractable conflicts” between states and individuals); Gilles & Friedman, supra note 97,

at 668 n.205 (“[Industry groups] know that public officials don’t have the resources to

finance complicated law suits [sic] that often take years to work their way through the

courts.” (alterations in original) (quoting Ohio Att’y Gen. Marc Dann, Address to the

City Club of Cleveland 5 (June 29, 2007), https://perma.cc/4X3L-RLBU)); Margaret H.

Lemos, Aggregate Litigation Goes Public: Representative Suits by State Attorneys General, 126

ARV. L. REV. 486, 523 n.154 (2012) (noting “instances where states were outgunned by

large corporations [and] there was substantial pressure to settle on terms that were not

desirable and not in the public interest” (alteration in original) (quoting remarks made

by Iowa Attorney General Tom Miller at a 2003 Columbia Law School symposium)).

171. See CAL. LAB. CODE § 2699, 2699.3 (West 2022).

172. At least nine states were actively considering PAGA-like bills by the 2019-2020

legislative session. Charles Thompson, Anthony Guzman & Linda Ricci, Employers

Must Brace for PAGA-Like Bills Across US, L

AW360 (June 18, 2021, 3:25 PM EDT),

https://perma.cc/CKQ8-M26H (to locate, select “View the live page”) (noting that

Connecticut, Illinois, Maine, Massachusetts, New Jersey, New York, Oregon, Vermont,

and Washington were considering bills with the same basic structure as California’s

law). In Connecticut, Massachusetts, New Jersey, New York, and Washington, these

bills are still pending as of this writing. See H.R. 5245, 2022 Gen. Assemb., Feb. Sess.

(Conn. 2022) (allowing plaintiffs to sue for labor law violations on behalf of the state

even “after having waived their personal rights to sue by signing forced arbitration

agreements”); H.R. 1959, 192d Gen. Ct. (Mass. 2021) (creating a “public enforcement

action” for whistleblowers or “representative organization[s]” to sue employers for

wage theft); S. 362, 220th Leg. (N.J. 2022) (permitting an employee or representative to

bring the same action as state officials against an employer for unlawful work-

scheduling practices); S. 12, 244th Leg., Reg. Sess. (N.Y. 2021) (creating “a means of

empowering citizens as private attorneys general to enforce” labor laws through “a

public enforcement action to collect civil penalties”); H.R. 1076, 67th Leg., Reg. Sess.

(Wash. 2021) (creating a “qui tam action” for whistleblowers or “representative

organization[s]” to sue for violations of workplace laws). PAGA-like bills in Oregon

and Vermont have died. See H.R. 2205, 81st Leg., Reg. Sess. (Or. 2021) (creating a “public

enforcement action” for an individual or “representative organization” to seek “civil

penalties” for violation of state laws); S. 139, 2019 Leg. (Vt. 2019) (allowing “an

aggrieved employee, representative organization, or whistleblower” to bring a “public

enforcement action” for labor law violations). Maine’s PAGA-like bill passed both

houses but was vetoed by the governor. See S. 525, 130th Leg., 1st Spec. Sess. (Me. 2021)

(providing a “private enforcement action” for a “whistleblower” or “representative

organization” to enforce employment law violations); Letter from Maine Governor

Janet T. Mills to the 130th Legislature of the State of Maine 1-2 (July 12, 2021),

https://perma.cc/3CSD-WRAS.

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1315

Court dealt a recent blow to PAGAs by holding that an individual PAGA claim

can be severed from a representative PAGA claim—the former of which can be

compelled to arbitration, leaving the individual without standing to pursue the

representative claim in court.

173

And new, controversial uses of the private

attorney general (most notably S.B. 8, Texas’s “heartbeat” abortion ban) could

generate reticence around private–attorneys general enforcement

frameworks.

174

B. The Possibility of Private Procedural Counteroffensives

With government entities unwilling or unable to engage in meaningful

reform, the focus returns to the private sphere. Private procedural warfare,

after all, created the current landscape; perhaps it could reverse it. The defense

coalition, however, has long sought to anticipate and block any potential

counteroffensive by the plaintiffs’ bar. This Subpart analyzes how the defense

coalition and the Court left little room—but not no room—for private

procedural innovations to reverse the revolution.

Every year since the Supreme Court decided Italian Colors, I have told my

complex-litigation students about a lucrative dispute-resolution opportunity

lurking in arbitration agreements themselves. That opportunity, I warned,

would be high-risk. It would be costly (perhaps prohibitively so). It would be

legally uncertain. If it worked, though, it might well stop the arbitration

revolution in its tracks. That opportunity was mass arbitration.

How could any plaintiffs’ attorney, enterprising or otherwise, get away

with mass arbitration—especially given the Supreme Court’s arbitration

jurisprudence? I believed that something like mass arbitration could happen

for three main reasons. One, nature abhors a vacuum. The elimination of a

mechanism for aggregating claims does not eliminate mass harm or the mass of

individuals affected by such harm.

175

Two, the terms of arbitration agreements made something like mass

arbitration tempting, at least for plaintiffs’ attorneys with the resources and

173. See Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906, 1915-17, 1924-25 (2022). In her

concurrence, however, Justice Sotomayor noted that state legislatures are “free to

modify the scope of statutory standing under [their PAGAs] within state and federal

constitutional limits.” Id. at 1925-26 (Sotomayor, J., concurring).

174. See generally, e.g., Jon D. Michaels and David L. Noll, Vigilante Federalism, 108 CORNELL

L. REV. (forthcoming 2023), https://perma.cc/RB6P-5JC2; Aziz Huq, What Texas’s

Abortion Law Has in Common with the Fugitive Slave Act, W

ASH. POST (Nov. 1, 2021,

10:42 AM EDT), https://perma.cc/5WLP-JH6N.

175. See generally Samuel Issacharoff & John Fabian Witt, The Inevitability of Aggregate

Settlement: An Institutional Account of American Tort Law, 57 V

AND. L. REV. 1571 (2004)

(challenging the perception of American litigation as typically individualized and

tracing the importance of repeat-play agents for tort claimants).

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risk tolerance to attempt it. As I have traced in prior work, arbitration

agreements in the early 2000s tended to get struck down on unconscionability

and effective-vindication grounds.

176

To avoid such rulings, corporations

removed some of their more draconian arbitration-related clauses and added

provisions that they described as “friendly” to consumers and employees:

provisions requiring them to reimburse some or all of a claimant’s arbitration

fees, or even to pay bonuses to prevailing claimants.

177

Effectively,

corporations injected fee shifting into any arbitral proceedings pursuant to

their contracts.

The not-so-secret secret behind these “friendly” fee-shifting provisions

was that none of them were intended to have any real effect. That is because

these provisions existed alongside the one provision businesses would not

remove from their agreements: the class-action waiver. More than that, the

“friendly” fee-shifting provisions existed to facilitate the enforcement of class-

action waivers. While dodging unconscionability rulings might have been a

short-term benefit to corporations, the long-term (and far more ambitious)

strategy of the “friendly” provisions was to tee up for the Supreme Court an

arbitration agreement that contained a class-action waiver, but which

otherwise seemed to bend over backwards to facilitate individual claiming—

thus creating a plausible basis to deny that upholding the class waiver would

abrogate the substantive claim.

178

The calculus by corporations here was as obvious as it was rational. Even

with the fee-shifting provisions in arbitration agreements, individual

arbitration would not frequently be economically feasible for an ordinary

claimant or her lawyer.

179

From the corporate perspective, far better to foot

the bill associated with “friendly” fee-shifting provisions in a small handful of

176. See J. Maria Glover, Note, Beyond Unconscionability: Class Action Waivers and Mandatory

Arbitration Agreements, 59 V

AND. L. REV. 1735, 1751-55, 1767-69 (2006).

177. See Miller, supra note 103, at 799-800.

178. See Brief of AT&T Mobility LLC as Amicus Curiae in Support of Neither Party at 4-7,

T-Mobile USA, Inc. v. Laster, 553 U.S. 1064 (2008) (No. 07-976), 2008 U.S. S. Ct. Briefs

LEXIS 2319, at *5-9 (encouraging the Court to deny certiorari and suggesting that T-

Mobile’s arbitration clause did not look “friendly” enough to be a vehicle for evaluating

the legality of class-action waivers); see also Interview with Anonymous No. 1, supra

note 42 (stating that AT&T wanted its arbitration clause in front of the Supreme

Court, believing it to be the best vehicle for obtaining a favorable ruling on class-action

waivers); Bruhl, supra note 29 (speculating that AT&T filed briefs opposing certiorari

in cases involving other companies’ arbitration clauses because it “had developed a

brand new arbitration clause that was so amazingly consumer-friendly that if any

court struck it down, such a ruling would [in AT&T’s view] have to be preempted

because it would represent a per se bar against class waivers even when consumers

could profitably pursue individual arbitration,” a move that made AT&T’s attorneys

“very unpopular at cocktail parties for a while”).

179. See supra notes 26-28 and accompanying text.

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individual arbitrations than to bear the expense of litigating class actions that

purported to resolve the claims of all customers or employees. The gambit

worked.

The opportunity for mass arbitration, then, lurked in the unlikely but

devastating possibility that a significant number of individual arbitration

claims would be filed all at once.

Given this possibility, remote as it may have been, why did corporations

keep “friendly” arbitration provisions in their contracts? One likely reason is

that the “friendly” provisions did a fair amount of work for Justice Scalia in

Concepcion. Justice Scalia recounted these provisions in some detail in his

opinion for the Court, and he essentially offered them up as a template for

corporations to use in their contracts with consumers and employees going

forward.

180

Another likely reason is that post-Concepcion, businesses believed

they had arrived at a “more or less optimal form of blocking consumer

disputes.”

181

Even after the Court cast doubt on the necessity of “friendly”

provisions to the enforceability of arbitration agreements in Italian Colors,

182

corporations generally did not remove pro-consumer terms or add pro-

business ones.

183

The class-action waiver was all that mattered. The Court’s

full-throated embrace of class-action waivers directed the pressure generated

by mass harm away from private enforcement; mass arbitration, which

required both arbitration and aggregation, seemed conceptually incoherent

(and thus a dead letter).

Yet my third reason for thinking that something like mass arbitration

could happen, at least theoretically, was that the Supreme Court’s class

arbitration jurisprudence did not give defendants a strong basis to foreclose

mass arbitration. To be sure, the Court’s arbitration opinions, particularly

Italian Colors, read broadly. And cases like Italian Colors likely leave room—

perhaps substantial room—for less “friendly” arbitration contracts under the

FAA.

184

Expressing this concern, Justice Kagan criticized the Italian Colors

majority for essentially limiting its effective-vindication jurisprudence to

“baldly exculpatory provisions.”

185

But Justice Kagan may have overstated the

point.

180. See AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 336-38, 351-52 (2011); see also

Miller, supra note 103, at 800-01 (describing how Concepcion “ensur[ed] companies that

[contracts like AT&T’s] were undoubtedly safe”).

181. Miller, supra note 103, at 824.

182. See Glover, supra note 75, at 3057.

183. Miller, supra note 103, at 826.

184. See supra note 182 and accompanying text.

185. See Am. Express Co. v. It. Colors Rest., 570 U.S. 228, 240-43, 247-48, 253 (2013) (Kagan, J.,

dissenting).

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One can conceive of other provisions, not quite baldly exculpatory, that

would seem to ask too much of the FAA. Consider a provision requiring an

individual claimant to pay the defendant a $100,000 up-front fee to pursue

statutory claims. Or a provision specifying that all disputes will be arbitrated

by someone on the board of directors of the defendant company. Surely the

preemptive scope of the FAA is not so broad as to prohibit legislatures (or

courts) from deeming “pay-defendant-to-play” or “adjudication-by-defendant”

provisions void as against public policy.

186

Surely those provisions interfere

impermissibly with the effective vindication of rights.

Along similar lines, the logic of the Court’s arbitration jurisprudence does

not easily extend to individual claims—even a substantial number of them—as

opposed to claims brought on a representative basis. In representative

litigation, one individual can litigate on behalf of 999 others who do not have

to participate at all.

187

The class-waiver cases hinge on the fact that

representative devices like the class action create a form of dispute resolution

that (at least according to the Court) is fundamentally inconsistent with the

FAA’s preference for bilateral arbitration.

188

But having established bilateral

arbitration as the paradigm the FAA was intended to protect, it would be a

stretch, even for a defense-minded Court, to disapprove of any quantity of

bilateral arbitration proceedings.

Of course, the Court has not addressed mass arbitration. In my mind,

however, the Supreme Court’s jurisprudence cannot go so far as to prohibit a

parade of proverbial fools and fanatics from pursuing negative-value claims on

an individual basis.

189

Imagine that 1,000 similarly situated individuals filed

individual arbitration claims. There is no doubt that a judge—at least one who

views aggregation as a mechanism for imposing in terrorem settlement

pressure—would find the settlement pressure generated by these 1,000 claims

normatively undesirable. But it is doubtful that the same judge could use Stolt-

Nielsen, Concepcion, Italian Colors, Epic Systems, or any other arbitration case to

prevent those 1,000 claimants from pursuing their 1,000 individual cases.

186. Some courts have said as much. See, e.g., Chavarria v. Ralphs Grocery Co., 733 F.3d 916,

926-27 (9th Cir. 2013) (“If state law could not require some level of fairness in an

arbitration agreement, there would be nothing to stop an employer from imposing an

arbitration clause that, for example, made its own president the arbitratior of all claims

brought by its employees.”).

187. See Phillips Petrol. Co. v. Shutts, 472 U.S. 797, 810 (1985).

188. See supra notes 81-87 and accompanying text. Indeed, the Stolt-Nielsen Court indicated

that the “shift from bilateral arbitration to class-action arbitration” would cause

“fundamental” (and presumably undesirable) changes. See Stolt-Nielsen S.A. v.

AnimalFeeds Int’l Corp., 559 U.S. 662, 686-87 (2010) (expressing concern that, among

other things, the arbitrator’s award would “adjudicate[] the rights of absent parties”).

189. Cf. Carnegie v. Household Int’l, Inc., 376 F.3d 656, 661 (7th Cir. 2004) (“[O]nly a lunatic

or a fanatic sues for $30.”).

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Indeed, during oral argument in Italian Colors, Chief Justice Roberts all but

stated as much.

190

For decades, the defense coalition proceeded on the assumption that a

campaign targeting the class-action device, but not underlying substantive

rights, would achieve the holy grail of defense-side goals: avoiding legal

liability.

191

Defendants’ extended honeymoon with the class action, however,

may have obscured the ways in which the aggregate unit itself was the true

source of their discontent. The potential for low-value cases to generate

significant settlement pressure comes from a mass of claims, which can exist

independently of any specific aggregate device.

192

But the Supreme Court’s

jurisprudence has targeted the class action, not the aggregate unit generally.

Individual claims are the boundary—and a mass of individual claims now the

price—of the arbitration revolution’s legal immortality.

193

III. Mass-Arbitration Case Study

Consistent with the analysis in Part I.C above, the opportunity for mass

arbitration arose from two consequences of the arbitration revolution. First,

the revolution produced orphaned aggregate claim units—groups of classable

claims deprived of any civil justice home, but which still had potential legal

merit. Second, the revolution produced millions of “friendly” arbitration

agreements. If corporations were forced to comply with the “friendly”

contractual terms they had drafted, orphaned aggregate claim units could

increase the settlement pressure stemming from their claims. As it turns out,

enforcement of those terms is not only expressly permitted but explicitly

190. The full exchange was as follows:

CHIEF JUSTICE ROBERTS. Well, again, that doesn’t seem too difficult. You either have your

trade association or you have a big meeting of all [the plaintiffs] and say we need to pay for

this expert report and once we’ve got it, you know, I’m going to represent each of you

individually in individual arbitrations and I’m going to win the first one, and then the others

are going to fall into place and they’ll get a settlement from American Express that’s going

to . . . satisfy their concerns.

R. KELLOGG. Absolutely right.

HIEF JUSTICE ROBERTS. Okay. And you have no problem with that.

R. KELLOGG. I have no problem with that.

Transcript of Oral Argument at 21-22, It. Colors, 570 U.S. 228 (No. 12-133).

191. See generally Gilles, supra note 47.

192. Cf. Nagareda, supra note 132, at 1882-85 (“Aggregation operates harmoniously with

remedial design by making feasible private litigation . . . to enforce strictures against

misconduct that otherwise would not give rise to marketable claims . . . .”).

193. Cf. INDIANA JONES AND THE LAST CRUSADE, at 01:54:16 (Steven Spielberg dir., 1989) (“But

the [Holy] Grail cannot pass beyond the great seal. That is the boundary, and the price,

of immortality.”).

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required: After all, the FAA says that “courts must ‘rigorously enforce’

arbitration agreements according to their terms.”

194

To say that an opportunity for mass arbitration existed, however, is not to

say that mass arbitration was likely to occur. As this Part demonstrates, mass

arbitration’s path from theoretical opportunity to viable model of dispute

resolution was economically prohibitive, legally uncertain, and, in the view of

most attorneys who considered it, intolerably risky.

195

And yet, mass

arbitration emerged.

Parts III, IV, and V now present the first and only case study of mass

arbitration. Part III investigates the origins of and obstacles to mass arbitration

and describes mass arbitration’s key features. Part IV uncovers and analyzes a

number of contemporaneous developments to which mass arbitration must

adapt. What emerges from this investigation is a new and distinct model of

aggregate dispute resolution, which Part V.A taxonomizes and compares to

taxonomies I developed for two other firmly established models of aggregate

dispute resolution (class actions and MDL consolidations). Part V.B discusses

some limitations of this Article’s case study and highlights important open

questions that those limitations reveal.

The case-study method “explores a real-life, contemporary bounded

system (a case) or multiple bounded systems (cases) over time.”

196

As such, it is

the most effective way to understand a real-life phenomenon like mass

arbitration. The case study begins with a brief background section, followed by

a discussion section that investigates two questions. One, what were the

principal obstacles to the development of viable mass arbitration, and how

were they overcome? Two, what are the key features of the mass-arbitration

model? The case study continues by asking a third question: What are the

current challenges to mass arbitration, and what do they reveal about its

future? After investigating these questions, the case study presents the

taxonomy described above.

A quick note on taxonomy: I chose to compare mass arbitration to class

actions and MDL consolidations for two reasons. First, class action and MDL

consolidation are the most established mechanisms for aggregate claiming in

litigation.

197

As such, they serve as important reference points against which

194. It. Colors, 570 U.S. at 233 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 221

(1985)).

195. See, e.g., Interview with Cory L. Zajdel, supra note 40.

196. JOHN W. CRESWELL, QUALITATIVE INQUIRY & RESEARCH DESIGN: CHOOSING AMONG

FIVE APPROACHES 97 (3d ed. 2013) (emphasis omitted).

197. See, e.g., Richard Marcus, Bending in the Breeze: American Class Actions in the Twenty-First

Century, 65 D

EPAUL L. REV. 497, 499-504 (2016) (describing the “golden age” of class-

action suits); Andrew D. Bradt, “A Radical Proposal”: The Multidistrict Litigation Act of

1968, 165

U. PA. L. REV. 831, 833 (2017) (“With the Supreme Court and lower courts

footnote continued on next page

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1321

other forms of formal or informal aggregate dispute resolution can be

compared. Second, mass arbitration is fundamentally a reactionary

phenomenon. It is almost impossible to imagine the development of a mass-

arbitration model without the existence of some external driving force.

Corporations created such a force not only through their resistance to the class

action, but also through their resistance to MDL consolidation.

198

Contractual

avoidance of MDL consolidation has received relatively little discussion, but it

is not insignificant: Like class actions, MDL consolidations allow cost

spreading among claimants,

199

thereby facilitating claiming and imposing

significant settlement pressure on defendants.

200

cutting back the viability of the class action . . . MDL has become the leading

mechanism for resolving mass torts.”).

198. See generally 28 U.S.C. § 1407 (providing for the transfer of related cases “to any district

for coordinated or consolidated pretrial proceedings”). The most recent and high-

profile attempt by a corporation to avoid MDL consolidation involved Johnson &

Johnson, which tried to channel consolidated mass-tort claims through a new legal

entity, LTL Management LLC, in Chapter 11 bankruptcy proceedings. Informational

Brief of LTL Management LLC at 1, In re LTL Mgmt. LLC, No. 21-30589 (Bankr.

W.D.N.C. Oct. 14, 2021), ECF No. 3; Motion of the Official Committee of Talc

Claimants to Dismiss Debtor’s Chapter 11 Case ¶¶ 1-3, In re LTL Mgmt., LLC, 637 B.R.

396 (Bankr. D.N.J. 2022) (No. 21-30589), ECF No. 632-1; Memorandum of Law of Amici

Curiae by Certain Complex Litigation Law Professors in Support of Motion of the

Official Committee of Talc Claimants to Dismiss Debtor’s Chapter 11 Case ¶¶ 4-6, In re

LTL Mgmt., 637 B.R. 396 (No. 21-30589), ECF No. 1410 (describing, in a brief submitted

by the Author, the MDL process as an alternative to such a novel bankruptcy plan);

Memorandum of Law of Amicus Curiae by Erwin Chemerinsky in Support of Motion

of the Official Committee of Talc Claimants to Dismiss Debtor’s Chapter 11 Case ¶ 4, In

re LTL Mgmt., 637 B.R. 396 (No. 21-30589), ECF No. 1396 (warning that the “bankruptcy

petition stretches the Bankruptcy Code beyond the breaking point”). Despite the

arguments of complex-litigation, constitutional law, and bankruptcy professors, Judge

Michael Kaplan of the Bankruptcy Court of the District of New Jersey denied the tort

claimants’ motions to dismiss. In re LTL Mgmt., 637 B.R. at 399-400. In his sweeping

opinion, Judge Kaplan stated that LTL’s Chapter 11 filing “was not undertaken to

secure a tactical advantage” and that, to the extent such a tactic would open the

floodgates to the use of bankruptcy proceedings to terminate and resolve legal claims,

“maybe the gates . . . should be opened.” Id. at 421, 428 (capitalization altered).

199. Jaime Dodge, Facilitative Judging: Organizational Design in Mass-Multidistrict Litigation,

64 E

MORY L.J. 329, 347-48 (2014).

200. Id. at 345-46 (“[T]he cost-spreading MDL enables counsel to pursue many meritorious

cases that would have been negative-value claims outside of an aggregative context.”);

John M. Majoras, Steven N. Geise, Christopher R.J. Pace, Sharyl A. Reisman & Leon F.

DeJulius, Jr., Settlement Strategy in MDL, in 2 B

USINESS AND COMMERCIAL LITIGATION IN

FEDERAL COURTS § 19:52 (Robert L. Haig ed., West 2021) (describing how MDL

consolidation can encourage settlement).

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A. Background

1. Definitions

There are two distinct models of dispute resolution that one might hear

referred to as “mass arbitration.” The first model, which has existed for many

years, was developed principally by a subset of labor and employment firms,

which would arbitrate the relatively small number of claims by employee-

clients against their employers.

201

After proceeding through arbitration on

those test cases, the firms would attempt to leverage successful individual

results as de facto bellwethers to obtain settlements for unfiled claims.

202

This

model might sound a bit familiar: It closely resembles Chief Justice Roberts’s

observations about arbitration during oral argument in Italian Colors. As a

claimant, Chief Justice Roberts noted, you could “have your trade

association . . . represent each of you individually in individual arbitrations

and . . . win the first one, and then the others are going to fall into place and

[you’ll] get a settlement.”

203

This “test-case” model is not what this Article

terms mass arbitration.

In the second model—what this Article refers to as mass arbitration—firms

amass thousands of clients who have allegedly suffered a common harm by a

common defendant.

204

Rather than file a handful of claims in arbitration for

potential use as bellwethers or test cases,

205

the firms then file hundreds or

thousands of individual arbitration demands. And they do so with the stated

intent of arbitrating each individual case until a satisfactory aggregate

settlement is reached.

The first example of this second model occurred, largely unnoticed, in

2011. That year a California firm, Bursor & Fisher, filed over 1,000 identical

arbitral demands seeking to enjoin a proposed merger between AT&T and T-

201. Interview with Travis Lenkner & Warren Postman, supra note 40.

202. Id.

203. Transcript of Oral Argument at 21, Am. Express Co. v. It. Colors Rest., 570 U.S. 228

(2013) (No. 12-133); see supra note 190 and accompanying text.

204. Between 2010 and 2018, some employment firms filed what might be called “mini mass

arbitrations” in the employment context. These arbitrations generally consisted of 100

or 200 claims. See, e.g., Aguilera v. Prospect Mortg., LLC, No. 13-cv-05070, 2013 WL

4779179, at *1-2 (C.D. Cal. Sept. 5, 2013) (describing how 188 plaintiffs who signed

arbitration agreements with the defendant company filed individual demands against

the company through the AAA and JAMS).

205. This model closely tracks that of a large MDL. See, e.g., Richard J. Arsenault & J.R.

Whaley, Practice Tip, Multidistrict Litigation and Bellwether Trials: Leading Litigants to

Resolution in Complex Litigation, B

RIEF, Fall 2009, at 60, 60-62 (discussing the MDL

bellwether model).

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Mobile.

206

AT&T responded with eight separate lawsuits arguing that the

demands, which arose under the Clayton Act, fell outside the scope of the

arbitration agreement with its customers.

207

Courts agreed with AT&T in at

least five of these cases;

208

several stated that the demands bore “all the

hallmarks of ‘class arbitration’ laid out in Concepcion.”

209

Nothing about this

attempted mass arbitration seems to have been written since.

210

A few other small-scale mass arbitrations popped up in the mid-2010s.

Small-scale mass arbitrations share some of the same features as large-scale

mass arbitrations, and they may have laid some of the groundwork for the

mass-arbitration model. Accordingly, this Article includes them in its study.

211

But small-scale mass arbitrations did not provide a meaningful substitute for

the class actions eliminated by the arbitration revolution, in large part because

of their size. As such, they did not capture much attention, much less affect the

arbitration revolution generally.

Mass arbitration on a significant scale did not materialize until around

2018, when (seemingly out of nowhere) a group of plaintiffs’ firms and

attorneys—a startup named Keller Lenkner LLC, a small Maryland consumer

firm called Z Law Group, and a Minnesota lawyer named Kent Williams—

began filing thousands of arbitration demands against some of the biggest

corporations in the United States. In 2018: Uber. Lyft. Chipotle. In 2019:

206. See Daniel Fisher, AT&T’s Arbitration Victory Breeds Swarm Of Antitrust Cases, FORBES

(Aug. 18, 2011, 4:36 PM EDT), https://perma.cc/Y6TX-M4H4 (noting that Bursor &

Fisher attracted “more than 1,000 people who agreed to file arbitration complaints

against AT&T seeking to block the merger”); Letter from Kevin Ranlett to the Hon.

Dennis M. Cavanaugh at 1, AT&T Mobility LLC v. Keller, No. 11-cv-04671 (D.N.J.

Oct. 28, 2011), ECF No. 34 [hereinafter Ranlett Letter] (describing the arbitral demands

as identical).

207. Ranlett Letter, supra note 206, at 1 (describing the relevant case as “one of eight

lawsuits”); see, e.g., AT&T Mobility LLC v. Fisher, No. 11-cv-02245, 2011 WL 5169349,

at *3 (D. Md. Oct. 28, 2011) (describing AT&T’s contention that “the Clayton Act claim

brought in the demand for arbitration exceeds the scope of the Arbitration

Agreement.”).

208. Fisher, 2011 WL 5169349, at *7; AT&T Mobility LLC v. Bernardi, Nos. 11-cv-03992 &

11-cv-04412, 2011 WL 5079549, at *13 (N.D. Cal. Oct. 26, 2011); AT&T Mobility LLC v.

Smith, No. 11-cv-05157, 2011 WL 5924460, at *11 (E.D. Pa. Oct. 7, 2011); AT&T

Mobility LLC v. Gonnello, No. 11-cv-05636, 2011 WL 4716617, at *5 (S.D.N.Y. Oct. 7,

2011); AT&T Mobility LLC v. Bushman, No. 11-cv-80922, 2011 WL 5924666, at *4 (S.D.

Fla. Sept. 23, 2011).

209. Smith, 2011 WL 5924460, at *7; see also, e.g., Bernardi, 2011 WL 5079549, at *7. The

remaining arbitral demands likely disappeared in light of judicial skepticism.

Interview with Daniel Fisher, Senior Ed., Forbes, in Wash., D.C. (Aug. 5, 2021).

210. That said, the attorneys pursuing these types of claims were later referred to as

“arbitration entrepreneurs.” David Horton & Andrea Cann Chandrasekher, After the

Revolution: An Empirical Study of Consumer Arbitration, 104

GEO. L.J. 57, 63 & n.38 (2015).

211. See infra Appendix.

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CenturyLink. DoorDash. Family Dollar. Peloton. Intuit. In 2020: Chegg.

Amazon. In 2021: DoorDash, again (different claimants; different claims). Uber,

again (different claimants; different claims). These corporate defendants are

represented by some of the most well-known firms in “big law”: Gibson Dunn,

Morrison & Foerster, and Mayer Brown.

2. Methodology

“When a study includes more than one single case, a multiple case study is

needed.”

212

This case study draws from multiple cases and therefore uses the

“multiple-case study” method.

213

A multiple-case study enables the researcher

to understand key similarities and differences and allows her to analyze data

both within and across cases.

214

The multiple-case study method calls for

“detailed . . . data collection involving multiple sources of information.”

215

Accordingly, for this study, I collected case-related materials from multiple

sources to form the underlying dataset. Those materials included (1) all

publicly available data on arbitral claims in the AAA, JAMS, and CPR

databases;

216

(2) publicly available filings, judicial opinions, and orders from a

broad and representative sample of mass-arbitration cases; (3) publicly

available financial disclosures relevant to certain companies’ mass-arbitration

liability; (4) interviews I conducted with the principal architects of mass

212. Johanna Gustafsson, Single Case Studies vs. Multiple Case Studies: A Comparative

Study 3 (2017), https://perma.cc/2XD7-GUSC.

213. See ROBERT K. YIN, CASE STUDY RESEARCH: DESIGN AND METHODS 46-47 (3d ed. 2003)

(comparing single-case and multiple-case study designs); see also, e.g., Mark Gil A. Vega,

Investigating the Learning Action Cell (LAC) Experiences of Science Teachers in Secondary

Schools: A Multiple Case Study, IOER

INT’L MULTIDISCIPLINARY RSCH. J., Mar. 2020, at 20,

20-22 (evaluating an educational program in the Philippines via “multiple case studies

that utilized . . . survey questionnaires, individual interviews, focus group discussions,

and . . . observations”).

214. See YIN, supra note 213, at 47-48.

215. See CRESWELL, supra note 196, at 97 (emphasis omitted).

216. See Consumer and Employment Arbitration Statistics, AM. ARB. ASS’N, https://perma.cc/

J6R8-GRHC (archived May 14, 2022) (to locate, select “View the live page,” and then

select the first link under “AAA Consumer and Employment Arbitration Statistics”)

(listing AAA consumer cases closed within the last five years); JAMS Consumer Case

Information Spreadsheet, JAMS, https://perma.cc/7V8J-MFCX (archived May 14, 2022)

(to locate, select “View the live page,” and then select “JAMS Consumer Case

Information spreadsheet”) (listing consumer arbitrations administered by JAMS and

completed in the last five years); CPR Consumer Case Information, I

NT’L INST. FOR

CONFLICT PREVENTION & RESOL., https://perma.cc/GV8C-PCH6 (archived May 14,

2022) (to locate, select “View the live page,” and then select “CPR Consumer Case

Information”) (providing information on CPR consumer matters closed within the last

five years); see also Colvin, supra note 122, at 21 (describing the AAA’s records as a “best-

case example” of arbitration).

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arbitration

217

and with other leading plaintiffs’ attorneys;

218

(5) interviews I

conducted with the principal architects and leaders of the defense coalition’s

arbitration revolution;

219

and (6) public media reports on mass arbitration.

Given that mass arbitration did not emerge until around 2018, I established

the following criteria to ensure a sufficiently developed and representative case

sample for the study’s dataset. These criteria ensured that the dataset was

representative across time (criteria 1 and 2), claim size and number (criteria 3,

4, and 5), substantive legal context (criteria 6 and 7), and procedural origin

(criteria 8 and 9).

1. First-mover cases

220

(necessary to investigate how mass arbitration

emerged);

2. Second-mover cases

221

(necessary to investigate the evolution and future

of mass arbitration);

3. At least one case with claims that are claim-marketability failures in

arbitration

222

(necessary to investigate the claim-value threshold

223

of the

mass-arbitration model in the abstract and in comparison with other

aggregate dispute resolution mechanisms);

4. Cases of diverse scale, as measured by number of claimants (necessary to

investigate the mass-arbitration model’s scaling capabilities);

5. Cases involving (relatively) high-value individual claims and (relatively)

low-value individual claims (necessary to investigate claim-value ranges

for the mass-arbitration model’s economic viability);

6. Cases arising out of employment contracts;

7. Cases arising out of consumer contracts;

8. Cases that began as class actions; and

9. Cases that were initiated in arbitration.

217. See supra note 40.

218. See supra note 41.

219. See supra note 42.

220. I classify first-mover cases as those mass arbitrations where claim filing began in 2018.

221. I classify second-mover cases as those mass arbitrations where claim filing began in

2019 or later.

222. For purposes of this study, I define a claim that is a “claim-marketability failure” in

arbitration as one that would have been economically viable in litigation (via a class

action or other aggregate claiming mechanism) but is not economically viable in

arbitration, as the costs of arbitration relative to the value of the claim make it

economically irrational to pursue.

223. By “claim-value threshold,” I mean the following: the value of individual claims that

mass-arbitration attorneys have found to be the minimum—the threshold—for such

claims to be economically viable in the mass-arbitration model.

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Once a sufficient number of mass arbitrations emerged and developed to

satisfy these criteria, I compiled them into a dataset for study here.

224

The

overall dataset spans the mass-arbitration landscape (including some mass

arbitrations that never appear publicly), enabling thorough investigation of

the mass-arbitration model as it exists today.

B. Overcoming the Principal Obstacles to Mass Arbitration

The path to a viable model of mass arbitration was a narrow one.

Corporate defendants and their attorneys were experienced, sophisticated,

well-capitalized, and steadfastly devoted to preserving the bounty of the

arbitration revolution.

225

The win–loss and recovery rates for consumers and

employees in arbitration were too discouraging for even optimistic attorneys

to ignore.

226

The startup costs of mass arbitration were likely too high for

most attorneys, particularly those with the experience needed to go toe-to-toe

with the defense bar.

How, then, did mass arbitration ever come to be? Who could do it? Who

would do it?

1. Competing with the defense bar

Any path to mass arbitration had to go through the defense bar—the same

defense bar that engineered the arbitration revolution and the class-action

counterrevolution. While the proverbial “enterprising young attorney” might

224. The full dataset is on file with the Author. A subset of the data is reproduced in the

Appendix below.

225. Indeed, in many ways they still are. In a 2021 study, the American Association for

Justice (AAJ) noted that “[c]onsumer and employee win rates decreased” and “consumer

and employment forced arbitrations increased during the pandemic.” A

M. ASS’N FOR

JUST., supra note 146, at 2. Many of the cases studied by the AAJ, however, involved

claims in the mass arbitrations analyzed in this Article. See id. at 4 (listing the top ten

corporate defendants for employment arbitration in 2020, including Family Dollar,

Dollar Tree, and Chipotle); infra Appendix. The increase in arbitration between 2018

and 2021 is thus partly attributable (if not highly attributable) to the emergence of mass

arbitration. Accordingly, any analysis of the AAJ’s study must consider the distinction

between an increase in arbitration cases and an increase in mandatory arbitration

agreements. Cf., e.g., Bhattarai, supra note 146 (using the fact that Family Dollar closed

1,135 arbitration cases in 2020, as opposed to three cases in 2019, to show that “U.S.

companies are increasingly relying [on] . . . arbitration . . . during the pandemic,” a

conclusion that conflates an increase in cases with an increase in arbitration

agreements). For any given defendant, and in particular Family Dollar, the increase in

2020 cases would seem largely (if not exclusively) due to mass arbitration. Indeed, the

fact that Family Dollar closed three arbitration cases in 2019 likely reflects the general

tendency of mandatory arbitration agreements to suppress case filings, not facilitate

them. See supra Part I.C.

226. See Interview with Cory L. Zajdel, supra note 40.

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1327

be willing to devote countless hours to individualized claim management and

pursuit, that young attorney would be no match for the defense bar. And an

attorney with the skill and experience necessary to challenge the defense bar

would almost certainly lack the willingness to abandon a well-established and

lucrative practice for a risky and unfamiliar endeavor.

227

Unsurprisingly, then, first-mover firms in mass arbitration were unique

among plaintiffs’ firms. Keller Lenkner, the firm behind the Uber, Lyft,

Postmates, DoorDash, Intuit, Amazon, and FanDuel mass arbitrations, is

uniquely well capitalized for a startup firm, especially one founded just three

years ago. Two years before starting Keller Lenkner, Adam Gerchen, Ashley

Keller, and Travis Lenkner sold Gerchen Keller Capital—a litigation-funding

firm Gerchen and Keller had founded in 2013—to Burford Capital for $160

million.

228

Keller Lenkner is also unusual among plaintiffs’ firms in that its

attorneys were “trained at leading defense firms and commercial litigation

boutiques.”

229

Indeed, Keller Lenkner’s ranks include Warren Postman, the

former vice president and chief counsel for appellate litigation at the U.S.

Chamber of Commerce.

230

Other attorneys come from shops like Kirkland &

Ellis, Williams & Connolly, and Kellogg Hansen.

231

The marketing

implication is obvious: “Keller Lenkner’s lawyers can match the best lawyers

on the other side because they’ve been there.”

232

Cory Zajdel, whose firm, Z Law Group, is behind both the Chegg and

DoorDash (consumer) mass arbitrations, is also unique among plaintiffs’

attorneys. Zajdel invested his life savings into mass arbitration.

233

His

reasoning? The arbitration revolution left consumers, including many of his

227. Even now, well-capitalized plaintiff-side powerhouses are hesitant about the risk–

benefit calculus. Interview with Jonathan D. Selbin, supra note 41.

228. Press Release, Burford Cap., Burford Capital Adds Scale and Significant Private Capital

Management Business Through Acquisition of Gerchen Keller Capital (Dec. 14, 2016),

https://perma.cc/V8PU-M3BJ; Press Release, Gerchen Keller Cap., LLC, Gerchen

Keller Capital, LLC Launches New $250 Million Commercial Litigation Finance Fund

(Jan. 13, 2014), https://perma.cc/9YNP-LP5H.

229. About Us, KELLER POSTMAN LLC, https://perma.cc/U574-WY4X (archived July 12,

2022). Keller Lenkner changed its name to Keller Postman after the departure of Travis

Lenkner in April 2022. Andrew Strickler, “Mass Action” Firm Keller Lenkner Becomes

Keller Postman, L

AW360 (Apr. 25, 2022, 4:54 PM EDT), https://perma.cc/9RWD-YRN5

(to locate, select “View the live page”). I refer to the firm as Keller Lenkner throughout

the Article.

230. Our Team, KELLER POSTMAN LLC, https://perma.cc/R3WZ-TBHD (archived May 14,

2022). Lenkner himself worked as an attorney at Gibson Dunn. Press Release, Burford

Cap., supra note 228.

231. See Our Team, supra note 230.

232. Alison Frankel, DQ from Facebook Class Action Shows Risk of Keller Lenkner’s Model,

EUTERS (July 21, 2021, 1:34 PM PDT), https://perma.cc/32JS-NFTW.

233. Interview with Cory L. Zajdel, supra note 40.

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clients, with virtually no access to justice. Zajdel knew that attorneys across

the country would routinely screen out cases where an arbitration clause was

present.

234

Because of this, he was concerned that no consumers subject to

arbitration agreements would be able to secure representation for their

claims.

235

If Zajdel didn’t do it, who would?

236

Other plaintiffs’ firms that have gotten involved in mass arbitration are

well established and well capitalized. Quinn Emanuel joined Keller Lenkner in

the DoorDash (employment) mass arbitration,

237

and it is on record as counsel

in the Ticketmaster mass arbitration.

238

Lieff Cabraser, class council against

Fitbit,

239

is considering dipping its toes into the mass-arbitration waters in the

context of Telephone Consumer Protection Act (TCPA) claims against

DirecTV.

240

Firms like Lieff Cabraser and Quinn Emanuel are large enough to

handle the volume of individual cases—and the attendant ethical obligations to

clients—generated by mass arbitration.

2. Overcoming substantial startup costs

The economic barriers to initiating a mass arbitration are substantial.

Creating the “mass” is a particularly expensive endeavor, both in the abstract

and relative to class actions and MDL consolidations. The filing of even a

single arbitration demand requires the claimant to pay a filing fee. (That is

generally true even if that filing fee is reimbursable under the terms of the

relevant arbitration agreement.)

The thousands of arbitration demands in this study were subject to a web

of multifarious, frequently amended fee schedules. Initial filing fees for

individual arbitration claims during the study period often fell somewhere

234. Id.

235. Id.

236. Id.

237. Alison Frankel, DoorDash Accused of Changing Driver Rules to Block Mass Arbitration

Campaign, R

EUTERS (Nov. 20, 2019, 3:34 PM), https://perma.cc/EFW9-7SW7.

238. Complaint, Heckman v. Live Nation Ent., Inc., No. 22-cv-00047 (C.D. Cal. Jan. 4, 2022),

ECF No. 1 (listing Keller Lenkner and Quinn Emanuel as counsel for the plaintiffs).

239. See infra notes 384-88 and accompanying text.

240. Interview with Jonathan D. Selbin, supra note 41 (noting that privacy claims stemming

from a TCPA class action had been sent to arbitration and that Lieff Cabraser was

seeking individual names in order to help claimants arbitrate). The underlying case is

Cordoba v. DirectTV, LLC, No. 15-cv-03755 (N.D. Ga. filed Oct. 27, 2015).

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74 STAN. L. REV. 1283 (2022)

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between $200 and $400,

241

although under some schedules and some

agreements they could have been much higher.

242

In many cases, just the filing fee for the arbitration demand can exceed the

value of any individual claim. Indeed, the initial filing fee is the reason that

most individual consumer and employment demands, at least if unconnected

to a mass arbitration, are never brought. As an example: To a couple earning

$32,877 a year, $200 owed by Intuit is a significant amount of money.

243

But

pursuant to the couple’s arbitration agreement, the filing fee to recover that

$200 would have been $200.

244

This made the claim economically irrational for

the couple (and their counsel) to pursue.

In order to launch a mass arbitration, then, a law firm typically must

advance the filing fees owed by its clients.

245

Given the number of individual

demands that mass arbitration entails, this is a substantial (and potentially

risky) up-front investment. In the Intuit mass arbitration, Keller Lenkner

invested more than $8 million dollars of its own capital to advance filing fees

for the first wave of individual arbitration demands.

246

In the DoorDash

241. See Am. Arb. Ass’n, Consumer Arbitration Rules: Costs of Arbitration 1 (2016),

https://perma.cc/TQ3J-H22N (setting out a default filing fee of $200 for consumers);

Arbitration Schedule of Fees and Costs, JAMS, https://perma.cc/L7US-MB6T (archived

May 19, 2022) (setting default fees of $250 for consumers and $400 for employees).

These fees can generally be altered via contract. At least prior to mass arbitration,

agreements that amended filing fees tended to lower the claimant’s fee or provide that

the defendant would reimburse the claimant’s fee. See, e.g., AT&T Mobility LLC v.

Concepcion, 563 U.S. 333, 336-37 (2011).

242. See, e.g., Rule 13900. Fees Due When a Claim Is Filed, FIN. INDUS. REGUL. AUTH.,

https://perma.cc/C9BD-GGPJ (archived May 19, 2022) (setting up a sliding scale where

filing fees vary based on the amount in controversy).

243. [Proposed] Brief of Amici Curiae the Office of the Los Angeles City Attorney & the

Office [sic] the County Counsel, County of Santa Clara Opposing Plaintiffs’ Motion for

Preliminary Approval at 40, Arena v. Intuit Inc., No. 19-cv-02546, 2021 WL 834253

(N.D. Cal. Mar. 5, 2021), ECF No. 176-1.

244. See Motion to Intervene & in Opposition to Preliminary Approval of Class Action

Settlement at 5, Intuit, 2021 WL 834253 (No. 19-cv-02546), ECF No. 177 [hereinafter

Intuit Motion to Intervene]. The AAA changed its fee schedule in November 2020 to

adjust for mass arbitration, reducing the required outlay for similarly situated

claimants to as low as $50. Mark Levin, New AAA Consumer Fee Schedule Addresses Mass

Arbitration Costs, JD

SUPRA (Mar. 2, 2021), https://perma.cc/6YR9-C9EB; Am. Arb.

Ass’n, Consumer Arbitration Rules: Costs of Arbitration 1 (2020), https://perma.cc/

K43E-URXP.

245. This is not always the case. For instance, the AAA waives filing fees when a California

consumer-claimant establishes a condition of “poverty” via affidavit. See Am. Arb.

Ass’n, American Arbitration Association Affidavit for Waiver of Fees Notice 1 (n.d.),

https://perma.cc/AJW2-45FM.

246. Defendant Intuit Inc.’s Opposition to Motion to Intervene & Motion for Leave to File

Brief of Amici Curiae at 7, Intuit, 2021 WL 834253 (No. 19-cv-02546), ECF No. 189

[hereinafter Intuit Opposition to Motion].

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(employment) mass arbitration, filing the first wave of claims for wage theft

cost counsel around $1.2 million.

247

By May 2020, Keller Lenkner had fronted

more than $10 million in filing fees for its clients.

248

In the Chegg mass

arbitration, Cory Zajdel put up his “life savings” to front the filing fees for

more than 15,000 arbitration demands.

249

There is no analogue to this up-front

capital outlay in a class action. In a class action in court, there is typically only

one filing for which a fee could be assessed—the class complaint.

Before a firm can even reach this expensive filing stage, it must expend

significant time and resources in order to amass claims to file. The “mass” in a

mass arbitration is the sum of hundreds or thousands of individual claimants,

all of whom the firm must identify, notify, contact, and ultimately retain.

Creating the “mass” requires firms to develop (internally) or hire (externally)

an advertising and marketing team capable of designing and implementing an

expansive, but also targeted, multimedia campaign. That campaign must not

only identify and reach a diffuse set of potential claimants; it must also

persuade those individuals to reach out to the firm so that the firm can file

claims on their behalf.

250

The outlay of resources required to create the “mass” in a mass arbitration

substantially exceeds that required in a typical class-action proceeding. First, in

a class action, the relevant “mass” (a class) is created through the relatively

inexpensive process of crafting a class definition in the complaint. Second,

notifying individuals of their inclusion in the class is typically done via a

formal court-ordered and court-supervised notice campaign.

251

And while

Rule 23(c)(2)(B) requires plaintiffs to bear the costs of notice, at least at the

outset, a judge can order reimbursement of those costs by the defendant at the

247. See Susan Antilla, Arbitration Storm at DoorDash, AM. PROSPECT (Feb. 27, 2020)

https://perma.cc/AWE3-C6P4.

248. Declaration of Warren Postman in Opposition to CenturyLink’s Motion to Disqualify

Counsel & Require Corrective Notice ¶ 6, In re CenturyLink Sales Pracs. & Sec. Litig.,

No. 17-md-02795, 2020 WL 3513547 (D. Minn. June 29, 2020), ECF No. 715 [hereinafter

CenturyLink Postman Declaration].

249. Interview with Cory L. Zajdel, supra note 40; Alison Frankel, Mass Consumer Arbitration

is On! Ed Tech Company Hit with 15,000 Data Breach Claims, R

EUTERS (May 12, 2020,

1:51 PM), https://perma.cc/68TS-KCMH.

250. One example of such a campaign is Labaton Sucharow’s outreach via Facebook to

individuals who might have claims against MoneyLion for charging excessive interest

rates. The MoneyLion advertisement did not appear on Labaton Sucharow’s main

Facebook feed. Instead, the ad appeared on a targeted subset of Facebook users’ feeds. A

copy of the ad is on file with the Author. For more on advertising campaigns, see

generally Interview with Cory L. Zajdel, supra note 40 (discussing the need for a

marketing budget and a targeted advertising plan); and Interview with Warren

Postman, supra note 40 (listing as a mass-arbitration startup requirement an intake

process to target and find clients).

251. See FED. R. CIV. P. 23(c)(2)(B).

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74 STAN. L. REV. 1283 (2022)

1331

end of the case.

252

Reimbursement can also occur through the negotiated terms

of a settlement agreement.

253

Finally, unlike mass-arbitration counsel, class counsel does not need to

individually retain the members of a class. At most, a court might require

counsel to produce a class list for purposes of satisfying the class-action

ascertainability requirement.

254

The outlay of resources required to create the “mass” in a mass arbitration

likely also exceeds that required in an MDL consolidation. In contrast with

MDL proceedings, which are public and often widely publicized,

255

arbitration

proceedings are private and less publicized (if publicized at all).

256

Potential

MDL claimants are thus more likely to know about the case against the

relevant defendant(s) and more likely to self-identify their claims. One might

252. See, e.g., Irving Tr. Co. v. Nationwide Leisure Corp., 93 F.R.D. 102, 111 (S.D.N.Y. 1981)

(“Notice must be financed by the class claimants. However, class claimants may apply

to this court for an order shifting the costs of some class member identification

procedures . . . . And, of course, if the class claimants prevail, an application to garner

costs and fees from the recovery fund can be made.” (citations omitted)).

253. See, e.g., Brief in Support of Unopposed Motion for Certification of Settlement Class,

Preliminary Approval of Settlement, & Approval of Class Notice at 25, In re

Caterpillar, Inc., C13 & C15 Engine Prods. Liab. Litig., No. 14-cv-03722 (D.N.J. Apr. 11,

2016), ECF No. 211-1 (“The costs of [class] notice will be paid out of the Settlement

Fund.”).

254. Compare, e.g., Cherry v. Dometic Corp., 986 F.3d 1296, 1304 (11th Cir. 2021) (“[A]

proposed class is ascertainable if it is adequately defined such that its membership is

capable of determination.” (emphasis added)), and Seeligson v. Devon Energy Prod. Co.,

761 F. App’x 329, 334 (5th Cir. 2019) (rejecting the idea that a class must be currently

ascertainable), with Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 592-94 (3d Cir. 2012)

(holding that “[a] class must be currently and readily ascertainable based on objective

criteria” and noting that class-member identification must be administratively

feasible). Although it insisted it was not changing circuit precedent, the Third Circuit

recently issued an opinion that seemed to weaken its heightened ascertainability

standard. Hargrove v. Sleepy’s LLC, 974 F.3d 467, 477-81 (3d Cir. 2020) (finding the

district court “too exacting” in its demand that the plaintiffs “identify the class

members at the certification stage”); see James Bogan III, Third Circuit Weakens

Ascertainability Requirement by Lowering Evidentiary Bar, JD

SUPRA (Oct. 1, 2020),

https://perma.cc/3VGY-Z5UW.

255. See, e.g., Jan Hoffman, Can This Judge Solve the Opioid Crisis?, N.Y. TIMES (Mar. 5, 2018),

https://perma.cc/RDF3-Y6G3 (covering the Judicial Panel on Multidistrict Litigation’s

transfer of opioid cases to Northern District of Ohio Judge Dan Polster for MDL

consolidation); Alyse Shorland, Johnson & Johnson Lawsuits Raise Fears Over Baby Powder,

N.Y.

TIMES: THE WKLY. (updated Dec. 8, 2019), https://perma.cc/S3AM-7G37 (to locate,

select “View the live page”) (covering the Johnson & Johnson asbestos-in-baby-powder

products liability MDL); see also Interview with Cory L. Zajdel, supra note 40 (noting

that aggregate proceedings in court tend to generate more publicity than arbitration

proceedings, even those related to mass arbitration).

256. See, e.g., Judith Resnik, Norman Shachoy Lecture, Courts: In and out of Sight, Site, and

Cite, 53 V

ILL. L. REV. 771, 799-810 (2008) (advocating for more “sunshine” in arbitration

and other private dispute-resolution arrangements).

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74 STAN. L. REV. 1283 (2022)

1332

think of it this way: In mass arbitration, attorneys must find the would-be

claimants, typically by way of costly and proprietary targeted advertising

systems. In an MDL consolidation, would-be claimants can and often do find

the attorneys. Relatedly, the public (and publicized) nature of an MDL allows

plaintiff leadership to rely on a nationwide network of firms to amass and

refer claims.

257

Referral networks like those seen in MDL consolidations are

less conceivable in mass arbitration. Without some form of publicity or an

expensive advertising apparatus, claim-collection websites by potential mass-

arbitration referral firms would be largely invisible.

Along these lines—and perhaps unsurprisingly—all of the first-mover

mass arbitrations and most of the second-mover mass arbitrations occurred

after or alongside the stay (or dismissal) of a class or collective action

258

on a

defendant’s motion to compel arbitration.

259

This procedural posture makes

257. See generally, e.g., D. Theodore Rave, Closure Provisions in MDL Settlements, 85 FORDHAM

L. REV. 2175, 2190 (2017) (“The network of client solicitation and referral arrangements

that exists on the plaintiffs’ side in mass litigation tends to consolidate groups of

claimants in the hands of major aggregators.”).

258. Note that the FLSA provides for class-wide proceedings by way of an opt-in collective

action. See 29 U.S.C. § 216(b).

259. For example: (1) Uber (employment): First arbitration claims filed in August 2018 after

Mohamed v. Uber Technologies, Inc., 848 F.3d 1201, 1206 (9th Cir. 2016) (reversing the

denial of Uber’s motion to compel arbitration regarding certain labor law claims), and

alongside O’Connor v. Uber Technologies, Inc., 904 F.3d 1087, 1090-91 (9th Cir. 2018) (doing

the same, and reversing class certification, for cases involving wage-theft claims by

Uber drivers); (2) Lyft: First arbitration claims filed in October 2018 after Bekele v. Lyft,

Inc., 199 F. Supp. 3d 284, 288 (D. Mass. 2016) (granting Lyft’s motion to compel

arbitration and dismissing the putative labor class action), aff ’d, 918 F.3d 181 (1st Cir.

2019); (3) Postmates: First wave of arbitration demands filed in March 2019 after Lee v.

Postmates Inc., No. 18-cv-03421, 2018 WL 6605659, at *1-3, *11 (N.D. Cal. Dec. 17, 2018)

(granting Postmates’ motion to compel arbitration and dismissing the plaintiffs’ wage-

theft claims) and alongside Adams v. Postmates, Inc., 414 F. Supp. 3d 1246, 1248, 1255-56

(N.D. Cal. 2019) (staying wage-theft claims pending arbitration), aff’d, 823 F. App’x 535

(9th Cir. 2020); (3) DoorDash (employment): First arbitration demands filed in August

2019 after Magana v. DoorDash, Inc., 343 F. Supp. 3d 891, 895-96, 901-02 (N.D. Cal. 2018)

(same); (4) Chipotle: First arbitration claims filed in August 2018 after Turner v. Chipotle

Mexican Grill, Inc., No. 14-cv-02612, 2018 WL 11314701, at *1 (D. Colo. Aug. 3, 2018)

(dismissing plaintiffs bound by Chipotle’s arbitration agreement from the wage-theft

action); (5) Intuit: First arbitration claims filed in October 2019 alongside Arena v. Intuit

Inc., 444 F. Supp. 3d 1086, 1088 (N.D. Cal.) (denying Intuit’s motion to compel

arbitration regarding deceptive consumer practices), rev’d sub nom. Dohrmann v. Intuit,

Inc., 823 F. App’x 482 (9th

Cir. 2020); (6) Fitbit: Named plaintiff filed arbitration demand

following McLellan v. Fitbit, Inc., No. 16-cv-00036, 2017 WL 4551484, at *1, *5 (N.D. Cal.

Oct. 11, 2017) (granting, for those plaintiffs who did not opt out of arbitration, Fitbit’s

motion to compel arbitration regarding deceptive consumer practices);

(7) FanDuel/DraftKings: First arbitration claims filed in October 2019 alongside In re

Daily Fantasy Sports Litigation, No. 16-md-02677, 2019 WL 6337762, at *1-5, *13 (D.

Mass. Nov. 27, 2019) (granting the defendants’ motions to compel arbitration for

certain classes of plaintiffs); (8) Chegg: First arbitration claims filed in April 2020 just

footnote continued on next page

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1333

sense for two reasons. One, the contractual right to arbitration is generally

waivable. Plaintiffs’ firms may well file class actions (or in the FLSA context,

collective actions) as a matter of strategy to see whether defendants will

exercise their right to compel arbitration via motion.

260

Two, the filing of a

class or collective action often leads to the formation and release of a class list

(that is, a list of claimants), and many mass arbitrations need something like a

class list to get started. According to Kent Williams, one of the lead attorneys

in the Chipotle mass arbitration: “Had the claimants not already been in a

collective action, the mass arbitration strategy likely wouldn’t have been

possible . . . .”

261

Investigation shows, however, that a class list is not necessary in all cases.

In some instances, the amassing of wage-and-hour claims against a defendant

can grow organically—at least when employees are connected and vocally

disgruntled about wage theft.

262

Family Dollar, for example, started and ended

as a mass arbitration.

263

In other instances, and in an ironic procedural

reversal, mass arbitrations can spawn class actions preferred by defendants

who refuse to arbitrate individual demands.

264

But both of these scenarios still

require spending on advertising, marketing, and outreach.

265

Nonetheless, in many cases the class list (or a similar data source) is

necessary for a mass arbitration to begin. This is especially true in cases where

claimants are disconnected or otherwise diffuse. In the potential Arise mass

after Lyles v. Chegg, Inc., No. 19-cv-03235, 2020 WL 1985043, at *1, *4 (D. Md. Apr. 27,

2020) (granting Chegg’s motion to dismiss and compel arbitration regarding data-

breach claims). If Ticketmaster becomes a mass arbitration, it will follow on the heels

of Oberstein v. Live Nation Entertainment, Inc., No. 20-cv-03888, 2021 WL 4772885, at *1

(C.D. Cal. Sept. 20, 2021) (granting the defendants’ motion to compel arbitration

regarding antitrust claims and staying proceedings), appeal filed, No. 21-56200 (9th Cir.

Oct. 29, 2021).

260. See, e.g., Interview with Matthew C. Helland, supra note 40.

261. Wallender, supra note 9.

262. Interview with Matthew C. Helland, supra note 40.

263. See Plaintiff’s Complaint ¶¶ 8-9, Fam. Dollar, Inc. v. Am. Arb. Ass’n, No. 20-cv-00248

(E.D. Va. May 15, 2020), ECF No. 1 [hereinafter Family Dollar Complaint] (discussing the

arbitration demands brought against Family Dollar without any reference to a prior

class action).

264. See, e.g., Fishon v. Peloton Interactive, Inc., 336 F.R.D. 67, 68 (S.D.N.Y. 2020) (indicating

that, after more than 2,700 Peloton consumers filed individual arbitration demands

with the AAA, Peloton failed to pay its required arbitration fees and instead chose to

defend a class-action suit in federal court); John O’Brien, Peloton Shifts Focus from

Arbitration to Courtroom to Defend Itself, L

EGAL NEWSLINE (July 30, 2020),

https://perma.cc/6UAE-KPY9 (“Peloton first tried to fight the case by pointing to an

arbitration clause in its terms of service, but it appears to prefer defending one class

action instead of dozens of arbitration claims.”).

265. See supra notes 250-57 and accompanying text (discussing the high costs of advertising

and intake in mass arbitrations relative to class actions and MDL consolidations).

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1334

arbitration, for instance, employees are spread out, isolated, and working from

home.

266

Arise has a list of its employees, but unless a court orders that list to

be released, a mass arbitration will be challenging to initiate.

267

The same

result is likely when claimant information is in the hands of defendants and

not easily obtainable by others. This is the situation in the potential mass

arbitration against DirecTV.

268

Ultimately, the class-list element of mass

arbitration faces an uncertain future. Some courts have begun to disallow the

release of class lists—or disallow notifications to employees regarding their

claims—in cases involving arbitration agreements.

269

The up-front costs associated with the preparation of individual

arbitration demands are another financial obstacle to mass arbitration. To

prepare an arbitration demand, attorneys must gather and record all personal

information for each individual: name, age, address, contact information,

employer, employment dates, company customer status, and so on. In some

instances, the attorneys might also have to collect factual documentation to

support each claim: receipts, financial statements, pay stubs or other

employment records, gig-economy driving and/or delivery records, and the

like.

270

To be sure, claimants’ attorneys have sought to achieve economies of

scale by submitting something resembling a master complaint (with a

266. Plaintiff’s Motion for Notice to Be Issued Pursuant to 29 U.S.C. § 216(b), & Suggestions

in Support at 1, Bell v. Arise Virtual Sols., Inc., No. 21-cv-00538, 2022 WL 567841 (W.D.

Mo. Feb. 24, 2022), ECF No. 2.

267. See, e.g., Ken Armstrong & Ariana Tobin, A New Suit Seeks to Turn Arbitrations, a Tool of

Big Corporations, Against a Top Customer Service Provider, P

ROPUBLICA (Aug. 3, 2021,

5:00 AM EDT), https://perma.cc/Z8A3-73MF (“Without a court-ordered list, finding

and contacting Arise’s network of customer service agents would present significant

challenges.”).

268. See Cordoba v. DirecTV, LLC, 801 F. App’x 723, 724-25 (11th Cir. 2020) (per curiam)

(noting that DirecTV allegedly violated the law when it created and shared a data file

containing customers’ personal information); Alison Frankel, Latest Mass Arbitration

Wrinkle: Plaintiffs’ Lawyers Want Court Permission to Contact DirecTV Customers,

EUTERS (July 6, 2020, 1:22 PM), https://perma.cc/JCM2-9B6B (describing efforts by

plaintiffs’ firms to contact clients based on the data file); Plaintiffs Seek Release of

DirecTV Customer Contact Info Sealed in Earlier Improper Texting Lawsuit, L

IEFF CABRASER

HEIMANN & BERNSTEIN (July 7, 2020), https://perma.cc/JM5J-V7QJ (emphasizing that,

without the release of contact information held by DirecTV, “those impacted by the

company’s wrongdoing will never know of privacy right breaches or have the

opportunity to bring their contractually-mandated individual arbitration claims”).

269. See, e.g., Cordoba v. DirecTV, LLC, No. 15-cv-03755, 2022 WL 575117, at *1-2, *4 (N.D.

Ga. Jan. 7, 2022) (refusing to let firms use the data file described in note 268 above for

client outreach); In re JPMorgan Chase & Co., 916 F.3d 494, 497-98, 501 (5th Cir. 2019)

(holding that a district court may not provide notice of FLSA collective-action claims

to employees bound by individual arbitration agreements); Bigger v. Facebook, Inc.,

947 F.3d 1043, 1046-47 (7th Cir. 2020) (limiting the circumstances under which a court

can authorize FLSA notice when arbitration agreements are present).

270. See Interview with Warren Postman, supra note 40.

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1335

spreadsheet of individual information linked or attached)

271

and by filing

nearly identical complaints for thousands of demands.

272

Some defendants

have argued that these “generic” filings are both invalid and abusive;

273

Postmates even sued 10,356 of its couriers on these grounds.

274

But the AAA

has not deemed such demands—including 1,000 demands in the CenturyLink

mass arbitration and more than 15,000 in the Postmates mass arbitration—

insufficient.

275

271. See, e.g., In re CenturyLink Sales Pracs. & Sec. Litig., No. 17-md-02795, 2020 WL

7129889, at *8 (D. Minn. Dec. 4, 2020) (“Keller’s pre-arbitration demand consisted of a

generic complaint alleging overcharging and fraud and a list of 9,000 clients with their

names, phone numbers, emails, and addresses.”), appeal dismissed, No. 21-1030, 2021 WL

2792967 (8th Cir. Feb. 23, 2021); Letter from Douglas H. Meal, Partner, Orrick,

Herrington & Sutcliffe LLP, to Cory L. Zajdel, Principal Att’y, Z Law, LLC 1 (June 26,

2020) (on file with author) (noting that Z Law compiled a “spreadsheet regarding the

claimants” in the Chegg mass arbitration).

272. Second Amended Complaint for Declaratory & Injunctive Relief ¶ 7, Postmates

Inc. v. 10,356 Individuals, No. 20-cv-02783 (C.D. Cal. July 1, 2020), 2020 WL 8167433,

ECF No. 61 [hereinafter Postmates Second Amended Complaint] (“[C]ounsel then sent

Postmates a single email that contained a link to 10,356 virtually identical arbitration

demands . . . .”).

273. See, e.g., Complaint for Declaratory & Injunctive Relief at 2, Postmates, Inc. v. 10,356

Individuals, No. 20-cv-02783 (C.D. Cal. Mar. 25, 2020), ECF No. 1 [hereinafter Postmates

Initial Complaint]; Respondent DoorDash, Inc.’s Opposition to Motion for Temporary

Restraining Order at 4, Abernathy v. DoorDash, Inc., No. 19-cv-07545 (N.D. Cal.

Nov. 22, 2019), ECF No. 35 [hereinafter DoorDash Opposition to Motion] (referring to

Keller Lenkner’s “mass arbitration scheme” as a “ransom”); see also, e.g., Supplemental

Declaration of Professor Nancy J. Moore ¶¶ 19-24, In re CenturyLink Sales Pracs. & Sec.

Litig., No. 17-md-2795, 2020 WL 3513547 (D. Minn. June 29, 2020), ECF No. 637

(contending that Keller Lenkner violated its fiduciary duties and ethical

responsibilities); Interview with Jonathan E. Paikin, supra note 42 (noting that, in

arbitration, “there’s really nothing you [the defendant] can do to get to the merits

before you have to pay”).

274. See Postmates Second Amended Complaint, supra note 272, ¶¶ 2-14. Postmates detailed a

number of potential deficiencies in the couriers’ arbitration demands, including that

some claimants never accepted the relevant arbitration agreement, some never did

work for Postmates, and some had released their claims as part of a separate settlement.

Id. ¶ 7.

275. For CenturyLink, see In re CenturyLink, 2020 WL 7129889, at *1 (noting that, after

Keller Lenkner “submitted 1,000 simultaneous arbitration demands against

CenturyLink to the AAA,” CenturyLink rather than the AAA attempted to halt

arbitration proceedings). For Postmates, see Postmates Second Amended Complaint,

supra note 272, ¶¶ 6, 8-10 (describing how the AAA handled proceedings for 10,356

“boilerplate” arbitration demands); and Adams v. Postmates, Inc., 414 F. Supp. 3d 1246,

1250-51 (N.D. Cal. 2019) (“Postmates refused to pay any fees, claiming that the [5,274]

individual arbitration demands were insufficient . . . to initiate arbitration proceedings.

The AAA, however, indicated that the arbitrations would move forward . . . .” (citation

omitted)), aff’d, 823 F. App’x 535 (9th Cir. 2020).

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Claim preparation, claim filing, and other tasks involved in mass claiming

typically require a substantial technology apparatus.

276

Building out such an

apparatus requires millions of dollars in up-front investment and continued

spending on maintenance and management.

277

Z Law and Keller Lenkner

ultimately created their own technology systems to handle mass claiming.

278

Independent developers have also built software for handling mass claims and

sold this software to firms.

279

Some of the up-front work to prepare individual demands can be

automated, at least with the technology mentioned above.

280

But much of it

cannot be. Emails (at least on the intake side) and phone calls with clients are

not automatable, either practically or ethically. And document review is not

fully automatable given legal and ethical strictures.

281

For these tasks a firm

needs attorney hours and a fully staffed client-services team

282

—both of which

come at additional, significant cost.

276. See, e.g., Interview with Cory L. Zajdel, supra note 40; Interview with Warren Postman,

supra note 40; Interview with Adam T. Klein, supra note 41; Interview with Jonathan

D. Selbin, supra note 41. But cf. Interview with Matthew C. Helland supra note 40

(indicating that existing tools for bringing FLSA collective actions can be repurposed

for mass-arbitration claims); Interview with Jonathan E. Paikin, supra note 42 (noting

that mass-arbitration attorneys can use Facebook and similar technologies to find

potential claimants).

277. See sources cited supra note 276; CenturyLink Postman Declaration, supra note 248, ¶ 5

(“Keller has invested millions of dollars in proprietary software and infrastructure to

make litigating clients’ claims more efficient . . . .”).

278. Interview with Cory L. Zajdel, supra note 40; Interview with Warren Postman, supra

note 40.

279. Ray Gallo is one of the leaders in this emerging industry. See GALLO LLP,

https://perma.cc/6JUR-C3LL (archived Aug. 8, 2022) (noting that Gallo is “supported

by truly cutting-edge technology” backed by the firm’s “affiliate Gallo Digital and its

software engineering team”); L

EVERAGE, https://perma.cc/2TKT-68ER (archived

Aug. 8, 2022)

(describing how Leverage, developed by Gallo Digital, can help with

“mass actions and arbitration swarms” (capitalization altered)).

280. See Interview with Cory L. Zajdel, supra note 40.

281. Cf., e.g., FED. R. CIV. P. 11(b)(3) (noting that an attorney, by presenting a document in

court, certifies that “the [underlying] factual contentions have [valid] evidentiary

support”).

282. See, e.g., Interview with Warren Postman, supra note 40 (describing Keller Lenkner’s

elaborate client-services apparatus, which includes more than one client-services

representative per attorney and “elevation attorneys” dedicated to answering client

questions); u/dant_punk, Keller Lenker Settlement, R

EDDIT: R/DOORDASH (Sept. 30, 2020,

3:27:50 PM PDT), https://perma.cc/H29F-MHV3 (containing copies of email exchanges

between claimants and Keller Lenkner client-services staff); u/J_Reigns5, Postmates

Keller/KCC Settlement, R

EDDIT: R/POSTMATES (Aug. 2, 2021, 1:39:57 PM PDT),

https://perma.cc/5FLV-EV94 (sharing the text of email from Keller Lenkner’s support

team updating claimants on the status of settlement payments); see also Interview with

Jonathan D. Selbin, supra note 41 (noting that a “huge” client-services apparatus is

necessary for mass arbitration).

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The investments of capital, time, and other resources needed to launch a

mass arbitration are distinct from those required in other forms of aggregate

claiming in another critical respect: temporal placement in the dispute. The

individualized information required at the outset of a mass arbitration, for

example, is similar (in both type and quantum) to what is required at the

conclusion of a class action.

283

This distinction is economically consequential.

For one thing, high startup costs diminish the present value of an asset.

Economic models of litigation bear this out: A party that incurs asymmetric

costs early in the litigation process suffers a devaluation of the underlying

claim.

284

For another, when the costs of individualized production are front-

loaded (as in mass arbitration) versus back-loaded (as in class actions), those

costs will tend to raise the risk profile of the underlying claims. Back-loaded

costs tend not to affect the risk profile of claims, at least not so substantially,

because an outlay of capital is only required after attorney compensation has

been secured. Those back-loaded costs, in other words, are baked into a deal

that already exists. In mass arbitration, a capital outlay is typically required

prior to any deal being reached.

This distinction also separates mass arbitrations from MDL proceedings,

although to a lesser degree. In mass-tort MDLs, for instance, all claimants

know that their complaints will be consolidated into aggregate proceedings

before a single judge to streamline costs.

285

And all attorneys know that they

will either be a part of the MDL leadership (and get paid in that way) or will

not (and will get paid by amassing claims while waiting for a resolution in the

MDL proceedings). Thus, while the MDL still has up-front costs—amassing

claims and claimants, drafting and filing complaints, comporting with ethical

obligations regarding attorney–client representation, and so on—those costs

are incurred against the backdrop of guaranteed cost-effective procedures. In

contrast, for first-mover mass arbitrations and many second-mover mass

283. See, e.g., Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. 442, 450-51, 460-61 (2016) (discussing

an award-distribution plan for class-action claimants based on the post-verdict

production of hours worked along with statistical modeling to make up for Tyson’s

failure to keep records).

284. Joseph A. Grundfest & Peter H. Huang, The Unexpected Value of Litigation: A Real Options

Perspective, 58 S

TAN. L. REV. 1267, 1312 (2006) (describing how front-loaded costs tend to

reduce a lawsuit’s settlement value because “a plaintiff must . . . incur larger expenses

before gaining the [bargaining] advantage of the information that is disclosed” later on

in the lawsuit).

285. See 28 U.S.C. § 1407.

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1338

arbitrations, the up-front investments were made with no guarantee of any

dispute-resolution procedure, cost-effective or otherwise.

* * *

In short, mass arbitration is an expensive and therefore risky proposition.

How, then, did a viable mass-arbitration model emerge? This investigation

reveals several answers, many of which lie in the structure of the mass-

arbitration model. Part III.C below explores these structural answers in more

detail. The investigation also reveals the importance of two developments in

the civil justice landscape—both external to arbitration agreements and to the

plaintiffs’ bar—that emerged or evolved in the 2010s.

The first is the expansion of social media platforming in the late aughts

and early 2010s, relevant here in two respects. One, this expansion brought to

social media a broad group of users, some of whom joined “mass litigation”

groups via online platforms. These groups enabled users to connect with

similarly situated potential plaintiffs.

286

That the social media expansion

facilitated access to justice was happenstance: The express purpose of these

platforms had nothing to do with civil justice.

287

Nonetheless, the claimant

groups that appeared on social media played a significant role in the mass-

arbitration model. Many of the settlement releases studied here warned

claimants that they would be ineligible for payouts if they shared any

settlement information with others. Some releases even said that claimants

would be ineligible for payouts if they informed other potential claimants of

their legal rights. Whether these draconian provisions are actually enforceable

is beside the point—they are meant to deter information sharing among

would-be claimants, who are likely to remain silent given the prospect of

losing their own benefits. Claimant groups on anonymized social media

platforms have emerged as one of the only ways in which these individuals can

meaningfully communicate.

288

286. See, e.g., Elizabeth Chamblee Burch, Litigating Groups, 61 ALA. L. REV. 1, 23, 32 & n.144

(2009) (describing the emergence of litigation-centered groups online and noting that

Yahoo! groups were used to achieve coordination among participants in the Merck

settlement).

287. This is merely a descriptive point; it is not to diminish the democratizing effect of

social media platforms on the consumers, employees, and franchisees denied access to

justice by the arbitration revolution. See, e.g., Jack B. Weinstein, The Democratization of

Mass Actions in the Internet Age, 45 C

OLUM. J.L. & SOC. PROBS. 451, 455 (2012) (discussing

how social media can enable participation in mass litigation and bring mass-litigation

proceedings closer to the people actually harmed).

288. See, e.g., u/Glkp, Keller/Lenkner Law Firm, REDDIT: R/POSTMATES (Dec. 23, 2020,

11:01:51 AM PST), https://perma.cc/6936-BRSF (discussing individual claims and

settlement amounts in the Postmates mass arbitration, and crowdsourcing questions

such as whether to provide Social Security numbers to Keller Lenkner).

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Two, as the number of social media platforms grew, increasingly niche

platforms emerged. With interfaces growing more sophisticated and new

options coming to market, companies began to develop technology for the

express purpose of bringing arbitration claimants together. The most

prominent example of this technology is a startup called FairShake, which

seeks to “level[] the playing field” between consumers and big companies.

289

FairShake uses an automated system to help individuals initiate arbitration

proceedings in exchange for a cut of any eventual payout.

290

FairShake began

by advertising to AT&T and Comcast customers and inviting them to file

claims through its platform. Shortly after its targeted advertising campaign,

FairShake had collected over 1,000 individual interest forms and prepared to

submit those forms as arbitration demands.

291

To be clear, FairShake is a

facilitator of individual claiming in arbitration. It does not appear to go any

further, and it has not stepped into the (traditionally legal) role of aggregator

or aggregate litigator.

The second important development in the 2010s was the arrival and

subsequent explosion of third-party litigation funding in the United States.

Third-party litigation funding enables a party with no relationship to a

lawsuit to pay some or all of the litigant’s costs in exchange for a cut of any

ultimate award.

292

The viability of third-party funding was not clear at the

time of Concepcion and Italian Colors, and the practice was not permitted in

many states.

293

In fact, as of 2010, third-party litigation funding in the United

States was little more than an idea in a law review article.

294

Today, it is a

multibillion-dollar industry.

295

289. FAIRSHAKE, https://perma.cc/CY6H-PVCD (archived May 19, 2022).

290. Common Questions About FairShake, FAIRSHAKE, https://perma.cc/H8BF-62FT (archived

May 19, 2022).

291. See Debra Cassens Weiss, Lawyer and Startup Resort to Mass Filings to Fight Company

Bans on Class Arbitration, ABA J. (Apr. 13, 2020, 10:37 AM CDT), https://perma.cc/

V222-HD5B (“Soon, FairShake had enough consumers to file 1,000 arbitration claims

against companies like AT&T and Comcast.”).

292. See Maya Steinitz, Whose Claim Is This Anyway? Third-Party Litigation Funding, 95

INN. L. REV. 1268, 1275-78 (2011).

293. See J. Maria Glover, Alternative Litigation Finance and the Limits of the Work-Product

Doctrine, 12 N.Y.U.

J.L. & BUS. 911, 914 (2016) (noting that “alternative litigation finance

is still in its early stages in the United States”); id. at 939 (describing champerty and

maintenance, common law doctrines prohibiting the third-party encouragement and

financial support of a lawsuit, as “more or less colorable defenses”).

294. See Jonathan T. Molot, Litigation Finance: A Market Solution to a Procedural Problem, 99

EO. L.J. 65, 73 (2010).

295. See, e.g., Bill Tilley, How Litigation Financing Became a Multi-billion Dollar Industry During

the Pandemic, L

INKEDIN (Feb. 11, 2021), https://perma.cc/FQ8Y-PVGJ. The existence

and details of litigation-funding arrangements are often confidential and therefore

footnote continued on next page

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The emergence of a multibillion-dollar litigation-funding industry is

relevant to the development of mass arbitration in at least three ways. One,

third-party funding may well have enabled a number of mass arbitrations,

especially at the beginning.

296

Two, the availability of third-party funding—

nonexistent during the arbitration revolution—made mass arbitration a more

realistic possibility for firms that needed (or wished) to hedge against the

model’s substantial risks. Three, third-party litigation-funding arrangements

are more available for individualized claiming models like mass arbitration

than they are for class-action suits.

297

C. Key Elements of the Mass-Arbitration Model

By studying the mass-arbitration model in its real-world context, this

Article shows that mass arbitration is more than just a procedural offensive.

Indeed, mass arbitration is a distinct form of dispute resolution with unique

operational features, strategic elements, benefits, and risks. The four principal

elements of the mass-arbitration model are: (1) leveraging arbitration fees and

fee-shifting provisions in arbitration agreements; (2) arbitrating individual

claims—or credibly threatening to do so—to impose asymmetric costs on the

defendants; (3) selecting higher-threshold-value individual claims (relative to,

say, class-action claims); and (4) generating aggregate settlements (within the

arbitration process, as opposed to other settlement processes defendants might

prefer) from a mass of individual claims.

1. Leveraging arbitration fees and fee-shifting provisions in

arbitration agreements

A viable procedural offensive—especially one with the up-front costs of

mass arbitration—needs some mechanism to recoup spending and generate a

return on the initial investment. The mass-arbitration model does this, or at

unobtainable. See generally Glover, supra note 293, at 913-14 (finding that many courts

protect litigation-funding arrangements from disclosure during discovery).

296. Interview with Cory L. Zajdel, supra note 40. Because litigation-funding arrangements

tend to be confidential, it is not possible to determine whether a particular mass

arbitration was funded. See supra note 295.

297. For example, a 2018 New York City ethics opinion held that arrangements between

third-party funders and lawyers violated rules prohibiting fee splitting. Ass’n of the

Bar of the City of New York Comm. on Pro. Ethics, Formal Op. 2018-5 (2018). The

opinion distinguished these arrangements from arrangements between funders and

clients, which it noted were acceptable. See id. Because firms are inclined to comply

with the opinion, see Interview with Anonymous No. 2, supra note 41, there are

naturally fewer options for third-party funding in class-action suits: These suits

proceed on a representative basis, and absent plaintiffs do not enter into financial

agreements with attorneys.

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least did this in the beginning, by leveraging arbitration fees and fee-shifting

provisions in arbitration agreements to obtain global settlements from

defendants. When successful, this mechanism counters the effects of the

arbitration revolution: Claims that were rendered unmarketable by class-

action waivers suddenly become capable of generating settlement pressure

greater than that produced by class certification.

Recall AT&T’s arbitration agreement in Concepcion, which included both a

class-action waiver and provisions requiring AT&T to pay or reimburse

various arbitration fees (including up-front filing fees).

298

Recall too that

AT&T included these “friendly” provisions to avoid unconscionability and

effective-vindication rulings and to soften the perceived blow of the class-

action waiver.

299

The mass-arbitration model exploits the tradeoffs made by

AT&T and other corporate defendants: Plaintiffs’ firms essentially called the

defendants’ bluff by filing demands under their “friendly” agreements and

insisting that courts “‘rigorously enforce’ . . . [those] agreements according to

their terms.”

300

The enforcement of arbitration agreements “according to their terms”

would seem to be a foregone conclusion. After all, this was the precise

command of the Supreme Court in Concepcion, Italian Colors, and Epic Systems.

Yet claimants’ attempts to do exactly that have been met with unrelenting

resistance by defendants desperate to avoid the catastrophic consequences of

taking the Court at its word.

Across the universe of mass-arbitration demands, defendants have

consistently refused, in whole or in part, to pay fees or to participate in

arbitration in any way.

301

This inaction has led arbitral fora to close or refuse

to proceed with claims.

302

It has also generated an odd, and deeply ironic,

procedural posture in many mass arbitrations: After or alongside decisions in

which courts granted defendants’ motions to compel arbitration of putative

298. See AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 336-37 (2011). The agreements

governing the mass-arbitration claims in this Article generally include similar

provisions. All relevant agreements are on file with the Author.

299. See supra notes 176-78 and accompanying text.

300. Am. Express Co. v. It. Colors Rest., 570 U.S. 228, 233 (2013) (quoting Dean Witter

Reynolds Inc. v. Byrd, 470 U.S. 213, 221 (1985)).

301. See, e.g., Abadilla Petition for Arbitration, supra note 5, ¶ 3 (noting that, as of late 2018,

Uber had only paid the initial filing fee in 296—and the arbitrator’s retainer fee in 6—of

12,501 pending arbitration demands); DoorDash Opposition to Motion, supra note 273,

at 2-3 (explaining DoorDash’s decision not to pay fees as a way of repudiating Keller

Lenkner’s “shakedown scheme” (capitalization altered)).

302. See, e.g., Abadilla Petition for Arbitration, supra note 5, ¶ 21 (“JAMS has . . . informed

Uber that ‘[u]ntil the Filing Fee is received we will be unable to proceed with the

administration of these matters.’” (alteration in original) (quoting a JAMS notice to

Uber)).

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class-action claims,

303

those same courts were asked to revisit the claims via

new motions to compel arbitration—this time filed by the plaintiffs.

304

Corporations’ arguments that their agreements should not be enforced

“according to their terms” have taken myriad forms. Uber, Chegg, and

FanDuel, for example, argued—somewhat oddly—that arbitrators lacked the

authority to decide whether to enforce their arbitration agreements. Uber

made this argument despite having just convinced the Ninth Circuit that

enforceability questions fell to the arbitrator.

305

Chegg raised the argument

even though its agreement explicitly stated that an AAA arbitrator, and an

AAA arbitrator alone,

would determine whether the agreement was

enforceable.

306

And FanDuel made the argument a mere six weeks after

persuading a federal judge that its clause required an arbitrator to resolve all

threshold issues.

307

No judge has yet to bless this particular argument.

303. See infra Appendix.

304. See, e.g., infra note 305.

305. Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1206-08 (9th Cir. 2016) (“Thus, all of

Plaintiffs’ challenges to the enforceability of [Uber’s newest] arbitration agreement . . .

should have been adjudicated in the first instance by an arbitrator and not in court.”).

After the Ninth Circuit functionally granted Uber’s motion to compel arbitration,

Uber drivers filed 12,501 individual demands with JAMS pursuant to the terms of

Uber’s arbitration agreement. Abadilla Petition for Arbitration, supra note 5, ¶¶ 2-3.

When Uber refused to pay the JAMS-assessed fees in all but six cases, the claimants

filed their own motion to compel arbitration. Id. ¶¶ 3-4, 13. In its opposition to the

claimants’ motion, Uber asked the district court to submit the fee dispute to JAMS for

collective resolution. Memorandum of Law in Opposition to Petitioners’ Motion to

Compel Arbitration at 14, Abadilla v. Uber Techs., Inc., No. 18-cv-07343 (N.D. Cal.

Jan. 14, 2019), ECF No. 53. But Uber had earlier argued that every dispute should be

resolved in individual arbitration, and its new position favored judicial intervention

over the individual arbitrator’s authority. See Petitioners’ Reply to Respondent Uber

Technologies, Inc.’s Opposition to Petitioners’ Motion to Compel Arbitration at 1-2,

Abadilla v. Uber Techs., Inc., No. 18-cv-07343 (N.D. Cal. Jan. 24, 2019), ECF No. 66

(criticizing Uber’s “newfound preference for judicial relief”).

306. Although Chegg argued that its user agreement delegated enforceability questions to

an arbitrator when it moved to compel arbitration in the District of Maryland, it

purported to unilaterally terminate its agreements (stating that mass-arbitration

claimants had asserted “frivolous or improper demands”) after the AAA ordered it to

pay arbitration fees. If accepted, this position would give Chegg—rather than the

arbitrator—the authority to determine whether claims are proper and therefore

enforceable. Alison Frankel, Chegg Tries a New Way to Avert Mass Arbitration: Cancel

Users’ Contracts, R

EUTERS (July 2, 2020, 12:52 PM), https://perma.cc/V7WH-69ES; see

Memorandum in Support of Defendant’s Motion to Compel Arbitration & Dismiss or,

Alternatively, Stay at 16, Lyles v. Chegg, Inc., No. 19-cv-03235, 2020 WL 1985043 (D.

Md. Apr. 27, 2020), 2019 WL 8013607, ECF No. 21-1; Letter from Cory L. Zajdel,

Principal Att’y, Z Law, LLC, to Cathe Stewart, Assistant Vice President, Am. Arb. Ass’n

1-3 (July 1, 2020), https://perma.cc/9V6S-RFVQ.

307. See In re Daily Fantasy Sports Litig., No. 16-md-02677, 2019 WL 6337762, at *1, *10, *13

(D. Mass. Nov. 27, 2019) (agreeing with FanDuel and holding that certain classes of

plaintiffs had “entered into valid agreements to arbitrate their claims, including

footnote continued on next page

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Postmates, on the other hand, argued that its agreements should not be

enforced because the mass filing of related individual demands violates the

FAA. Its basic argument was this: The manner in which the claims were

pressed—all at once, possibly with deficiencies in individual cases—amounted

to “de facto class arbitration” in violation of the parties’ agreed-upon class

waiver.

308

Accordingly, allowing the claims to proceed would prevent the

underlying arbitration agreements from being enforced “according to their

terms.” This argument also has yet to succeed.

309

It is premature at this

juncture, however, to speculate as to whether courts—and ultimately the

Supreme Court—will find that mass arbitration violates the FAA by treading

too close to class arbitration. So premature, in fact, that even some defense

attorneys have not given the matter much thought.

310

But in order for this

argument to prevail, the Supreme Court will need to further expand its

(already expansive) interpretation of the FAA.

311

Defendants have also sought to moot mass-arbitration claims, and by

extension the relevant arbitration agreements. In 2016 the Supreme Court

decided Campbell-Ewald Co. v. Gomez, a putative class action in which the

defendant tried to moot the class claims by offering to settle with the named

plaintiff.

312

In a 6–3 decision, the Court held that “an unaccepted settlement

offer . . . does not moot a plaintiff’s case.”

313

Despite this holding, Fitbit tried a

similar strategy in anticipation of mass arbitration. The company argued that

its arbitration agreement—an agreement it had just relied on to achieve the

threshold questions of arbitrability”). After that decision, and after FanDuel users filed

1,000 arbitration demands, the AAA assessed $300,000 in initial filing fees against

FanDuel and FanDuel refused to pay. Verified Petition ¶¶ 2, 18, FanDuel Inc. v. Badii,

No. 650211/2020 (N.Y. Sup. Ct. Jan. 9, 2020) (“FanDuel has not currently paid that

[$300,000] initial filing fee . . . .”). Instead, FanDuel asked a New York trial court to

decide whether the arbitral demands were time-barred—the very type of threshold

enforceability question it had just persuaded the District of Massachusetts must be

decided by an arbitrator. See id. ¶¶ 19-26.

308. Postmates Initial Complaint, supra note 273, at 2.

309. Postmates Inc. v. 10,356 Individuals, No. 20-cv-02783, 2020 WL 1908302, at *7 (C.D. Cal.

Apr. 15, 2020) (“[Postmates’] arguments focus . . . on arguably abusive tactics by [the

drivers’] counsel to seek a settlement, but do not point to anything about . . . [the] claims

themselves that make them ‘class actions.’ ”); see also Daniel Wiessner, Arbitration Bid by

10,000 Postmates Drivers Not a “De Facto Class Action”—Judge, R

EUTERS (Apr. 16, 2020,

4:06 PM), https://perma.cc/99Z8-WCF3.

310. See, e.g., Interview with Anonymous No. 4, supra note 42.

311. See supra Parts I.A-.B.

312. 577 U.S. 153, 157-60 (2016).

313. Id. at 165-66; id. at 169 (Thomas, J., concurring in the judgment) (“The Court correctly

concludes that an offer of complete relief on a claim does not render that claim moot.”).

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dismissal of a consumer class action

314

—no longer applied after it made a

satisfactory settlement offer to the named plaintiff of the putative class.

315

response to this argument, the judge threatened to hold Fitbit and its attorneys

in contempt.

316

Not to be outdone on this score, Chegg argued that arbitral claimants

breached the duty of good faith by filing demands, thereby terminating their

contracts—and thus Chegg’s fee requirements.

317

This argument, which

conflates a breach of good faith in the overall contract with a breach of the

arbitration agreement, likely runs counter to Supreme Court jurisprudence

dating back to 1967.

318

Chegg, however, continues to raise it.

319

Finally, all defendants have argued that the enforcement of their

arbitration agreements according to their terms would be fundamentally

unfair—to them.

320

DoorDash described Keller Lenkner’s attempts to enforce

the agreements Doordash wrote as a “shakedown scheme.”

321

Postmates also

referred to Keller Lenkner’s filing of arbitration demands as a “shakedown,” a

position it supported by claiming that some of the demands were invalid or

defective.

322

And Fitbit stated that enforcing its agreements and requiring it to

pay arbitration fees would offend common sense: After all, “a claim that is

314. McLellan v. Fitbit, Inc., No. 16-cv-00036, 2017 WL 4551484, at *1, *5 (N.D. Cal. Oct. 11,

2017).

315. See Transcript of Proceedings at 7-11, McLellan v. Fitbit, Inc., No. 16-cv-00036, 2018

WL 3549042 (N.D. Cal. July 24, 2018), ECF No. 143 [hereinafter Fitbit Transcript].

316. See id. at 12-13; see also McLellan, 2018 WL 3549042, at *6-7 (assessing attorney’s fees and

costs against “Fitbit and its lawyers . . . for their bad-faith litigation tactics”).

317. See Memorandum of Law in Support of Defendant Chegg, Inc.’s Motion for

Clarification or Modification of the Court’s April 27, 2020 Order at 20-24, Lyles v.

Chegg, Inc., No. 19-cv-03235 (D. Md. Aug. 4, 2020), ECF No. 26-1 (arguing that the

claimants’ bad-faith acts—colluding “to bring frivolous arbitration demands against

Chegg” in order to impose large fees—relieved Chegg “of all obligations under” its

agreements).

318. See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 402-04 (1967) (finding

that an arbitration clause is severable from the rest of a contract, meaning that “a

federal court may consider only issues relating to the making and performance of the

agreement to arbitrate,” not issues related to contract formation as a whole).

319. See, e.g., Respondent Chegg, Inc.’s Memorandum of Points & Authorities in Support of

Motion to Stay the Proceedings at 5-6, 9-10, Theisen v. Chegg, Inc., No. 20CV371775

(Cal. Super. Ct. Dec. 2, 2020).

320. See, e.g., DoorDash Opposition to Motion, supra note 273, at 22-23.

321. Id. at 2 (capitalization altered).

322. Respondent Postmates Inc.’s Opposition to Petitioners’ Motion to Compel Arbitration

at 1, Adams v. Postmates, Inc., 414 F. Supp. 3d 1246 (N.D. Cal. 2019) (No. 19-cv-03042),

2019 WL 11093949, ECF No. 112 (“This is a shakedown.”); Postmates Initial Complaint,

supra note 273, at 2. In lawsuits against the AAA, see infra notes 338-55 and

accompanying text, Family Dollar and Uber made similar allegations regarding the

validity of some of the filed demands.

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$162—an individual claim—is not one that any rational litigant would litigate”

given the AAA’s $750 up-front filing fee.

323

Fitbit’s argument is not new. A

near-identical point on the economic irrationality of individual arbitration

appeared in Italian Colors—in a brief written by the plaintiff merchants.

324

Whatever their precise form, at bottom these arguments are all about

enforceability. Whether it is for the arbitrator, through the relevant arbitral

process, to decide if a demand has merit is a question of whether a given

arbitration agreement—an agreement that assigns that very issue to the

arbitrator—should be enforced. And whether it is for the arbitrator, through

the relevant arbitral process, to decide if the costs of arbitration are so high

relative to claim value as to violate due process

325

or common sense is also a

question of enforcement.

326

However ironic (or sympathetic) the argument that defendants’ own

arbitration agreements cannot be enforced “according to their terms,” that

argument is entirely rational given the dramatic financial consequences of

enforcement for a defendant. The fees assessed in a mass arbitration are

astounding. In the Uber mass arbitration, for instance, initial filing and the

retention of an arbitrator cost Uber over $1,500 per claim.

327

In both the

DoorDash (employment) and Postmates mass arbitrations, initial fees were

$1,900 per demand.

328

As of January 2019, Uber faced over $18 million in

arbitration fees alone.

329

In October 2019, after DoorDash drivers paid over

323. Fitbit Transcript, supra note 315, at 10, 15.

324. Brief for Respondents at 54, Am. Express Co. v. It. Colors Rest., 570 U.S. 228 (2013)

(No. 12-133), 2013 WL 267025.

325. This could either be due process generally or the due process protocols of the specific

arbitral forum. See generally, e.g., A

M. ARB. ASS’N, CONSUMER DUE PROCESS PROTOCOL:

STATEMENT OF PRINCIPLES (1998), https://perma.cc/R6JP-AZYV; AM. ARB. ASS’N,

EMPLOYMENT DUE PROCESS PROTOCOL (1995), https://perma.cc/3Q3M-RDEL.

326. Judge John Kane of the District of Colorado recognized that these arguments go to

enforceability in the Chipotle mass arbitration. When Chipotle requested to stay the

individual arbitration proceedings that followed its successful motion to dismiss and

compel arbitration, Judge Kane wrote: “Chipotle challenged whether the Arbitration

Plaintiffs were proper members of the collective, and . . . I agreed and dismissed them

[pursuant to Chipotle’s arbitration agreement]. I refused to interfere with the

arbitration proceedings of individuals who were dismissed from this litigation . . . .”

Turner v. Chipotle Mex. Grill, Inc., No. 14-cv-02612, 2018 WL 11314702, at *2 (D. Colo.

Nov. 20, 2018) (footnote omitted).

327. See Abadilla Petition for Arbitration, supra note 5, ¶¶ 18, 21.

328. Adams v. Postmates, Inc., 414 F. Supp. 3d 1246, 1250 (N.D. Cal. 2019) (“[T]he AAA

informed Postmates that it had until May 31, 2019, to pay its share of the filing fees . . .

which was $1,900 per claimant . . . .”), aff’d, 823 F. App’x 535 (9th Cir. 2020);

Abernathy v. DoorDash, Inc., 438 F. Supp. 3d 1062, 1064 (N.D. Cal. 2020) (noting that the

applicable AAA rules required DoorDash to pay $1,900 per filing and claimants $300

per filing).

329. Frankel, supra note 12.

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$1.2 million in arbitration fees, Doordash refused to pay the $12 million it

owed to the AAA. The AAA accordingly closed over 6,000 demands.

330

As of

April 2019, Postmates owed—and refused to pay—$10 million in fees.

331

The

Northern District of California declined to relieve Postmates of those fees,

332

and Postmates’ potential debt grew as more demands were filed.

333

Postmates

continued its refusal to pay and instead tried to settle its mass-arbitration

claims by way of a class action.

334

By December 2020, Intuit had paid $13

million to the AAA but still faced $23 million in additional fees.

335

Even small-scale mass arbitrations can generate significant up-front fees.

In a confidential mass arbitration waged by Nichols Kaster on behalf of 150

employees with FLSA wage-and-hour claims, for instance, the defendant’s

filing costs alone could have been over $850,000.

336

Accordingly, it does not

take many claims for mass arbitration’s fee-leveraging mechanism to begin

generating settlement pressure. If the Chipotle mass arbitration is any

indication, it might only take about 150 cases to generate significant pressure

for all claims.

337

330. Abernathy, 438 F. Supp. 3d at 1064.

331. See Adams v. Postmates, Inc., No. 19-cv-03042, 2020 WL 1066980, at *1 (N.D. Cal. Mar. 5,

2020).

332. Id. at *6.

333. Alison Frankel, Beset by Arbitration Demands, Postmates Resorts to Class Action to Settle

Couriers’ Claims, R

EUTERS (Nov. 19, 2019, 3:04 PM), https://perma.cc/Q4SM-2PEC

(reporting that Keller Lenkner told Postmates it was “signing more [claimants] every

day” and that Postmates’ arbitration fees “would exceed $20 million”); see also

Declaration of Dhananjay S. Manthripragada in Support of Postmates’ Opposition to

Cross-Petitioners’ Motion to Compel Arbitration ¶ 45, Postmates Inc. v. 10,356

Individuals, No. 20-cv-02783, 2021 WL 540155 (C.D. Cal. Jan. 19, 2021), ECF No. 57

(noting that the AAA assessed over $4 million in filing fees against Postmates for a

different set of arbitration demands).

334. Alison Frankel, After Postmates Again Balks at Arbitration Fees, Workers Seek Contempt

Order, R

EUTERS (Dec. 2, 2019, 2:19 PM), https://perma.cc/26UZ-75ME (“Postmates came

up with a tactic to short-circuit the mass arbitration campaign: Its counsel . . .

negotiated an $11.5 million class action settlement in California state court that

purports to resolve the claims of all of its California couriers.”); see also Frankel, supra

note 333.

335. Alison Frankel, Judge Breyer Rejects $40 Million Intuit Class Action Settlement amid

Arbitration Onslaught, R

EUTERS (Dec. 22, 2020, 2:09 PM), https://perma.cc/363Y-U8ME.

336. Matthew C. Helland, Costs of Defense in Mass Individual Wage-and-Hour Arbitrations: A

Case Study, 3 PLI C

URRENT 213, 213, 218-19 (2019) (“The plaintiffs had filed 106

arbitration demands at the time of mediation, meaning the defendant had paid (or

owed) over $626,000 to JAMS just in initial filing costs. If mediation had failed and the

remaining plaintiffs had all filed their claims, the defendant would have owed JAMS

another $226,200 in initial filing fees.”); see also id. at 219 (noting that fully arbitrating

the FLSA claims could have cost the defendant upwards of $3 million).

337. Following the dismissal of nearly 3,000 Chipotle employees from an FLSA collective

action on the grounds that those employees were required to arbitrate their claims,

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Avoiding the enforcement of arbitration agreements “according to their

terms” is so consequential that both Family Dollar and Uber have sued the

AAA for carrying out their arbitration provisions.

338

Filing suit against an

arbitral forum that you yourself selected is a bold and significant move. As

such, these suits warrant brief examination here.

In Family Dollar’s complaint against the AAA, it contended that its

arbitration agreements could not be enforced in the context of a wage-theft

mass arbitration because “[m]ass arbitration . . . with little regard of the claims’

validity is not a proper use of the arbitration system where the arbitration

filing fees may far exceed the merits of the claim.”

339

Through this contention

Family Dollar made two arguments. First, it asserted that the claimants’

arbitration filings were “invalid.” This invalidity was largely procedural:

Family Dollar did not dispute the substantive merits of the claimants’ wage-

theft allegations.

340

Instead, Family Dollar’s “validity” argument was that some

of the individual filings were defective—they were filed in the wrong arbitral

forum, were untimely filed, were not tendered to Family Dollar first, did not

include precise damages amounts, and so on.

341

Indeed, as Family Dollar

pointed out, some of the demands were in fact withdrawn as invalid.

342

(The

around 150 employees filed individual arbitration demands. Turner v. Chipotle Mex.

Grill, Inc., No. 14-cv-02612, 2018 WL 11314701, at *1 (D. Colo. Aug. 3, 2018); Dave

Jamieson, Chipotle’s Mandatory Arbitration Agreements Are Backfiring Spectacularly,

UFFPOST (updated Dec. 21, 2018), https://perma.cc/Z9QJ-XWV7. Faced with these

demands, Chipotle “squeal[ed] for mercy,” Michael Hiltzik, Chipotle May Have

Outsmarted Itself by Blocking Thousands of Employee Lawsuits over Wage Theft, L.A.

TIMES

(Jan. 4, 2019, 7:00 AM PT), https://perma.cc/N488-3FRB, and asked the district court to

suspend arbitration proceedings lest Chipotle suffer “irreparable harm,” Turner v.

Chipotle Mex. Grill, Inc., No. 14-cv-02612, 2018 WL 11314702, at *1, *3 (D. Colo.

Nov. 20, 2018). Judge Kane rejected Chipotle’s arguments. Id. at *3.

338. Family Dollar Complaint, supra note 263; Declaratory Judgment Complaint, Uber

Techs., Inc. v. Am. Arb. Ass’n, No. 655549/2021 (N.Y. Sup. Ct. Sept. 20, 2021) [hereinafter

Uber Complaint].

339. Family Dollar Complaint, supra note 263, ¶ 1 (emphasis added).

340. Although Family Dollar claimed that it “never employed many of the claimants and

had no arbitration agreement with them,” this does not go to the substance of the

wage-theft claims. See Family Dollar, Inc.’s Brief in Support of Motion to Dismiss

American Arbitration Association, Inc.’s Counterlaim [sic] at 3-4, Fam. Dollar, Inc. v.

Am. Arb. Ass’n, No. 20-cv-00248 (E.D. Va. Aug. 21, 2020), ECF No. 10 [hereinafter Family

Dollar Motion to Dismiss].

341. See Family Dollar Complaint, supra note 263, ¶¶ 1, 10-12. Among other things, Family

Dollar asserted that (1) many of the agreements enforced by the AAA actually required

claimants to arbitrate before JAMS; (2) some parties to the enforced agreements had

already released their claims through prior settlements or bankruptcies; and (3) some

claimants had not agreed to arbitrate with Family Dollar. Id.

342. Id. ¶ 2.

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others were unilaterally withdrawn pursuant to a settlement agreement.)

343

Because of these withdrawals, Family Dollar argued, it should not be

responsible for a single penny of the more than $2.5 million in filing fees

assessed by the AAA.

344

Second, Family Dollar argued that mass arbitration itself was improper

because the filing fees could “far exceed the merits of the claim[s].”

345

At a

surface level, this is a new argument in that it comes close to a broadside on

mass arbitration in general. Family Dollar’s assertion that filing arbitration

demands “with little regard of the claims’ validity is not a proper use of

arbitration”

346

strongly suggests that mass arbitration is a practice divorced

from the merits. Fundamentally, though, Family Dollar’s argument—that its

filing fees improperly exceeded the value of the underlying demands—is the

same argument that was raised by the plaintiffs in Italian Colors.

347

The Eastern

District of Virginia never had the chance to rule on Family Dollar’s arguments;

Family Dollar and the AAA reached a settlement agreement in December

2020.

348

In September 2021, Uber moved for a preliminary injunction against the

AAA in New York state court

349

—and lost.

350

In both its complaint and its

motion, Uber argued that the AAA’s assessment of $10 million in initial fees

(and possibly $91 million in total fees) constituted a “ransom” coordinated by

“politically-motivated lawyers” who were filing “baseless claims.”

351

After a

343. Id.

344. Id. ¶¶ 1-2; see also Family Dollar Motion to Dismiss, supra note 340, at 1-2 (“Family

Dollar does not owe [the] AAA anything.”). The $2.5 million represents a fee of $2,200

for 1,166 of the roughly 2,000 total claimants. Family Dollar Complaint, supra note 263,

¶¶ 1, 15-16.

345. Family Dollar Complaint, supra note 263, ¶ 1.

346. Id.

347. See supra note 324 and accompanying text.

348. Settlement Conference Order ¶ 1, Fam. Dollar, Inc. v. Am. Arb. Ass’n, No. 20-cv-00248

(E.D. Va. Oct. 27, 2020) (scheduling a settlement conference for December 2, 2020);

Rule 41(a)(1)(A)(ii) Stipulation of Dismissal at 1, Fam. Dollar, Inc. v. Am. Arb. Ass’n,

No. 20-cv-00248 (E.D. Va. Dec. 4, 2020).

349. Plaintiffs’ Memorandum of Law in Support of Their Motion for a Preliminary

Injunction at 1, Uber Techs., Inc. v. Am. Arb. Ass’n, No. 655549/2021, 2021 WL 4789153

(N.Y. Sup. Ct. Oct. 14, 2021) [hereinafter Uber Motion].

350. Uber Techs., 2021 WL 4789153, at *2-3, aff’d, 167 N.Y.S.3d 66 (App. Div. 2022).

351. Uber Complaint, supra note 338, ¶¶ 1, 5; see Uber Motion, supra note 349, at 1-2. Uber

alleged that the fees were part of an effort by politically conservative D.C. firm

Consovoy McCarthy to “punish Uber for supporting the Black community in the

wake of George Floyd’s murder.” Uber Complaint, supra note 338, ¶¶ 1, 3, 46. The firm

“sought out and acquired clients—tens of thousands of them—and filed boilerplate,

single-sentence arbitration demands against Uber, asserting a type of ‘reverse

discrimination’ claim.” Id. ¶ 3.

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1349

two-day hearing, New York State Supreme Court Justice Robert Reed ruled

that while there may be “a more reasonable path” to handling 31,000 claims

than individual arbitration, Uber’s arbitration agreement did not provide for

such a path, and it was not for the court to rewrite Uber’s contract.

352

Justice

Reed seemed persuaded by AAA counsel Theodore Hecht, who “lampooned

Uber’s claim that it was a victim faced with a ransom.”

353

If anything, Hecht

noted, Uber was “hostage to [its] own agreement.”

354

In the above suits, both Uber and Family Dollar leaned heavily into the

following argument: The assessment of fees pursuant to a valid arbitration

agreement is improper because the claims at issue are meritless. However,

whether claims have merit and what process can decide whether claims have

merit are separate issues. In their contracts with consumers and employees,

Family Dollar and Uber designed the process for litigating claims, including

the process by which the merits of claims would be evaluated.

355

The Family

Dollar and Uber complaints took issue with the processes for determining

validity and merit—the very processes Uber and Family Dollar specified.

Effectively, then, the complainants were arguing against themselves.

* * *

In sum, the make-or-break event of a mass arbitration, at least in current

form, is the enforcement (or credibly threatened enforcement) of arbitration

agreements “according to their terms.” This event triggers the fee-leveraging

mechanism of mass arbitration, which can spell financial catastrophe for a

potential defendant.

356

While many of the claims studied here appear quite

colorable,

357

the fee-leveraging mechanism of the mass-arbitration model

352. Transcript of Proceedings Before the Honorable Robert R. Reed at 136-39, Uber Techs.,

2021 WL 4789153 (No. 655549/2021).

353. Frank G. Runyeon, Uber Has Itself to Blame for $91M Arbitration Bill, Judge Says, LAW360

(Oct. 13, 2021, 7:54 PM EDT), https://perma.cc/9NPK-7WHV (to locate, select “View

the live page”).

354. Id. (quoting Hecht).

355. See, e.g., Andrew Strickler, Uber Wrote the Script It Now Attacks in Arbitration Suit,

AW360 (Oct. 4, 2021, 1:00 PM EDT), https://perma.cc/9TSR-94WL (to locate, select

“View the live page”).

356. Even when the underlying claims have merit, the fee-leveraging mechanism tends to

extract a settlement premium deriving from the threat of cost imposition. See Glover,

supra note 132, at 1729 (“Economic models of litigation, as well as recent empirical

studies, strongly support the conclusion that litigation costs can significantly affect

settlement outcomes.”).

357. See, e.g., Cotter v. Lyft, Inc., 176 F. Supp. 3d 930, 931-32 (N.D. Cal. 2016) (rejecting a

proposed $12.25 million settlement of Lyft drivers’ misclassification claims because

counsel had underestimated the settlement value); Nandita Bose, U.S. Labor Secretary

Supports Classifying Gig Workers as Employees, R

EUTERS (Apr. 29, 2021, 8:50 AM PDT),

https://perma.cc/JQ97-4Z3Y (noting that Secretary of Labor Marty Walsh believes “[a]

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could impose settlement pressure for more dubious claims—that is to say, it

could impose illegitimate, in terrorem settlement pressure.

358

The same has

been said of the class-certification event,

359

which is perhaps the closest

analogue to the agreement-enforcement event in mass arbitration.

360

But in

terrorem or otherwise, the settlement pressure created by class certification is

no match for the pressure that defendants created through their arbitration

agreements. Against this monster of the defendants’ own making, the class

action may begin to look like a safe harbor.

361

2. Arbitrating claims individually, or credibly threatening to do so

The second distinctive feature of the mass-arbitration model is that its

claims proceed individually rather than being merged into something like a

single class action or MDL consolidation. In other words, mass arbitration

eschews the strategy of class proceedings: the formal aggregation of claims to

make claiming cost-effective for plaintiffs. Mass arbitration instead proceeds

on the premise that plaintiffs can aggregate individual proceedings in a way

that makes the claims economically viable—perhaps even more viable than

class or otherwise consolidated proceedings.

Here, Intuit is illustrative. Claimants in the Intuit mass arbitration had

more valuable claims than similarly situated claimants in class proceedings, in

part because the mass-arbitration claimants could command a “premium to

reflect Intuit’s potential arbitration costs.”

362

This premium would not have

existed without attorneys willing and able to arbitrate (or credibly threaten to

arbitrate) a meaningful number of individual cases.

lot of gig workers . . . should be classified as ‘employees’ who deserve work benefits,” a

position that bolsters misclassification claims like Cotter’s).

358. Some of the attorneys I interviewed for this study indicated that firms have begun to

demand settlements without filing a class complaint or any arbitral demands, and on

the basis of fairly dubious claims. See, e.g., Interview with Anonymous No. 4, supra

note 42.

359. See In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1298 (7th Cir. 1995).

360. See, e.g., Nagareda, supra note 22, at 99 (describing the certification of a putative class as

the make-or-break event that has the power to impose a great deal of settlement

pressure on a defendant); see also In re Rhone-Poulenc Rorer, 51 F.3d at 1298 (making the

same point).

361. Intuit, for example, attempted to negotiate a class settlement in order to “resolve” the

claims of individuals it had previously compelled to arbitrate. Presumably, Intuit

preferred a single class action to the settlement pressure imposed by the fees and costs

of many individual arbitrations. See Intuit Motion to Intervene, supra note 244, at 1-3,

12-13; see also, e.g., Randazzo, supra note 35.

362. Intuit Motion to Intervene, supra note 244, at 7 (quoting Declaration of Stephen McG.

Bundy in Support of Intuit’s Opposition to Defendants’ Motion for a Preliminary

Injunction ¶ 3.f, Intuit Inc. v. 9,933 Individuals, No. 20STCV22761, 2020 WL 7866018

(Cal. Super. Ct. Nov. 20, 2020)); see Glover, supra note 132, at 1729.

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More than any other, this feature of mass arbitration will likely strike

readers as counterintuitive. Conventional wisdom holds that the expense of

individual proceedings can make claims economically irrational to pursue.

Indeed, this wisdom not only bears out empirically but also lies at the core of

the arbitration revolution and the class-action counterrevolution.

363

Mass

arbitration challenges the conventional wisdom in two key ways. First, it

challenges the long-standing premise that disaggregation disables claiming.

Second, it challenges the corollary of that premise: that those with negative-

value or low-value claims will fare better, as a matter of economics, in an

aggregated case than they will in a disaggregated one.

364

Mass arbitration was able to challenge conventional wisdom regarding

aggregation (typically a claim facilitator) and disaggregation (typically a claim

disabler) for three interrelated reasons. First, as a general matter, litigating

many related claims on an individual basis is more expensive than litigating

many related claims in a single class action or a set of consolidated cases.

365

Second, litigating many related claims on an individual basis in arbitration is

more expensive than litigating many related claims on an individual basis in

court, especially given that arbitral organizations impose fee after fee at just

about every stage of the proceedings.

366

While defendants have insisted for

decades that arbitration is “cost-effective,”

367

cost-effective is not the same as

363. See supra Part I.C.

364. Judges and commentators have long maintained that economy and efficiency are key

benefits of joinder and aggregation. See, e.g., Sherman, supra note 28, at 236; Francis E.

McGovern, Resolving Mature Mass Tort Litigation, 69 B.U. L. R

EV. 659, 671 (1989)

(analyzing an asbestos suit and finding that “[t]he cost to the judicial system for the

class action approach in both time and money was substantially less than what an

equivalent number of individual trials would have generated, even taking into account

the supplemental judicial resources devoted to appeals, pre-trial matters, and

settlement negotiations”).

365. For recent commentary on the transaction-cost–leveraging feature of mass arbitration,

see Erin Mulvaney, Mandatory Arbitration at Work Surges Despite Efforts to Curb It,

LOOMBERG L. (Oct. 28, 2021, 10:01 AM), https://perma.cc/QDZ5-DLB9 (quoting

Cohen Milstein partner Joseph Sellers, who commented that while it is tempting for

companies “to use [arbitration] agreements to avoid class claims,” those companies

“may be forced to incur large amounts of transaction costs to handle multiple claims

that are very similar”).

366. Compare Am. Arb. Ass’n, supra note 241, at 1-3, and Arbitration Schedule of Fees and Costs,

supra note 241, with District Court Miscellaneous Fee Schedule, U.S.

CTS., https://perma.cc/

7QQ7-G2B4 (archived May 19, 2022).

367. For example, defendants argued that because arbitration reduced their spending on

class-action defense, they could pass along their savings to consumers in the form of

lower prices. See, e.g., Stephen J. Ware, Paying the Price of Process: Judicial Regulation of

Consumer Arbitration Agreements, 2001 J.

DISP. RESOL. 89, 89. The argument changed in

and after Concepcion: Arbitration was now easier and less expensive for individuals

than judicial proceedings, particularly where defendants were contractually required

to pay arbitration fees. See, e.g., Concepcion Chamber of Commerce Brief, supra note 78,

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inexpensive. And arbitration is very, very expensive.

368

Third, and perhaps

most importantly, mass-arbitration attorneys have found ways to impose

arbitration’s expenses on defendants asymmetrically, thus driving up the

settlement value of individual claims.

369

Simply put, mass arbitration shows

that when it comes to in terrorem effects (the bogeyman of the class-action

counterrevolution), the leverage of a large number of individual arbitrations

can sometimes exceed the leverage created by aggregate proceedings.

This study uncovered a number of ways in which mass-arbitration

attorneys can asymmetrically impose the costs of arbitration on corporate

defendants. First, by filing individual arbitration demands as opposed to a

single class-wide complaint (as required by some arbitration agreements),

mass-arbitration attorneys can harness fee-shifting provisions not just once,

but hundreds or thousands of times. This can quickly drive a defendant’s

arbitration costs into the tens or hundreds of millions of dollars.

370

Second, as much as defendants may wish to remove the fee-shifting

provisions from their arbitration agreements,

371

it is not clear to what extent

an adhesion contract requiring arbitration can shift costs to claimants.

California, for instance, restricts how far contracts of adhesion can go in

forcing a claimant to pay arbitration fees.

372

Accordingly, although the issue

at 1, 3-4, 12; Brief of Amicus Curiae New England Legal Foundation in Support of

Petitioner at 10-11, 15-16, AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011)

(No. 09-893), 2010 WL 3232489.

368. In one instance, three arbitrations for wage theft against a Florida construction

company generated over $100,000 in costs to the employer. Hernandez v. Acosta

Tractors Inc., 898 F.3d 1301, 1303 (11th Cir. 2018); see also, e.g., Helland, supra note 336,

at 217 (“The defendant would certainly spend more than $49,000 in JAMS fees and

defense fees on each individual hearing.”); Michael Corkery, Amazon Ends Use of

Arbitration for Customer Disputes, N.Y.

TIMES (updated Sept. 28, 2021), https://perma.cc/

99U6-MQZ8 (“Just to hire the arbitrator and to get the process started for a single claim

cost Amazon about $2,900.”).

369. See generally Glover, supra note 132, at 1729-32, 1729 nn.58-60, 1730 n.63 (tracing how

the credible threat of litigation-cost imposition can either (1) drive settlement values

down if deployed asymmetrically by defendants; or (2) drive settlement values up if

deployed asymmetrically by plaintiffs). This point is critical, as arbitration costs are

not borne by the defendants alone. See, e.g., Am. Arb. Ass’n, supra note 241, at 1.

370. See infra Appendix.

371. Many defendants have already begun to do so. See infra Part IV.C.1 (noting that revised

agreements without fee-shifting provisions are already emerging and characterizing

these agreements as one of the biggest challenges to the sustainability of the mass-

arbitration model).

372. See Armendariz v. Found. Health Psychcare Servs., Inc., 6 P.3d 669, 687-89 (Cal. 2000)

(holding that, “when an employer imposes mandatory arbitration as a condition of

employment,” claimants cannot be required to pay fees unique to arbitration and in

excess of litigation costs). Some courts view Concepcion’s broad preemption holding to

undermine the Armendariz rule. See, e.g., James v. Conceptus, Inc., 851 F. Supp. 2d 1020,

1033 (S.D. Tex. 2012) (“The general Armendariz rule is in serious doubt following

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will undoubtedly be litigated in the future, mass-arbitration attorneys can

challenge defendants’ efforts to avoid cost asymmetries through revised

contracts.

Third, mass-arbitration attorneys can rely on structural differences to

impose asymmetric costs on defendants.

373

Corporate defendants tend to be

represented by large national or multinational firms—often more than one in a

single case—that earn profits by billing their clients by the hour. And do they

ever: These firms often assign many high-billing partners and associates to

each matter.

374

Mass-arbitration claimants, on the other hand, are generally

represented by firms that seek to profit via a contingency percentage of any

recovery.

375

While this arrangement carries more risk for counsel, claimants

themselves face far fewer litigation costs. In other words, hour by hour and

pound for pound, corporate defendants generally pay more for their lawyers

than mass-arbitration claimants do. Because defendants face high litigation

costs while claimants do not, defendants may be more inclined to settle and

avoid the paying for the litigation itself.

376

Fourth, entrepreneurial attorneys pursuing the mass-arbitration model

can specifically select for remedial schemes with fee-shifting provisions and

statutory damages.

377

Bringing claims under these schemes can introduce fee-

leveraging mechanisms beyond those described above, driving up settlement

pressure, settlement values, and individual payouts.

3. Selecting higher-threshold-value claims

The threshold value required for a claim to be marketable in the mass-

arbitration model is typically higher than the threshold value required for a

class-action or MDL claim. This is true for two reasons. First, the initial

Concepcion. . . . To the extent Armendariz precludes arbitration in any employment

dispute if the employee is required to bear any type of expense not present in litigation,

it appears preempted . . . .” (emphasis omitted)); Mercado v. Drs. Med. Ctr. of Modesto,

Inc., No. F064478, 2013 WL 3892990, at *6-7 (Cal. Ct. App. July 26, 2013) (noting that

Concepcion and Italian Colors “cast doubt on the continued validity of . . . Armendariz”).

The law on Armendariz, however, is not settled. See, e.g., Fred W. Alvarez, Enforcement

of California-Based Employment Arbitration Agreements, in ALI-CLE

COURSE MATERIALS:

ADVANCED EMPLOYMENT LAW AND LITIGATION (2013), Westlaw SU033 ALI-CLE 1279

(cautioning employers to “comply with Armendariz until the law is more settled”). The

Supreme Court has not confronted the Armendariz rule directly. The Court quoted

Armendariz for the basic definition of unconscionability in Concepcion, but it did not

otherwise mention the case. See 563 U.S. at 340.

373. See Interview with Warren Postman, supra note 40.

374. See Interview with Anonymous No. 2, supra note 41.

375. See Interview with Warren Postman, supra note 40.

376. See Glover, supra note 132, at 1729-32.

377. See infra Appendix.

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1354

investment required to collect, process, and file claims for a mass arbitration

exceeds that required for a class action or MDL consolidation. Second, the

economies of scale achieved by the class-action device and MDL are not

present to the same degree in mass arbitration.

378

These differences are a

significant source of leverage in the mass-arbitration model.

379

The price of

that leverage, however, is that mass-arbitration claims must often be worth

more to make economic sense.

Firms often use an individual-recovery threshold to determine whether

mass-arbitration claims are marketable. Although the precise threshold varies

by firm (given risk tolerance) and remedial scheme (given differences in fee

shifting and penalties), it generally starts in the high hundreds for some firms

and rises to a few thousand dollars for others.

380

Anything below the high-

hundred mark would almost certainly not be economically viable in mass

arbitration, even if the firm carefully crafted a flat-fee structure.

381

The range above may actually be conservative. Most mass-arbitration

claims arise under remedial schemes that include some combination of

statutory damages, treble damages, and fee shifting.

382

And the claims most

suitable for mass arbitration typically require minimal discovery or rely on

uniform proof, thereby enabling claimants to spread evidentiary costs.

383

Without these generous remedial schemes and limitations on discovery and

proof, firms’ thresholds could be driven even higher.

The fact that mass-arbitration claims require a higher threshold value to

be deemed marketable is apparent in the potential Fitbit mass arbitration.

Fitbit is an example of what this Article terms a mass-arbitration claim-

marketability failure. The case began as a putative class action for consumer

fraud, arising out of allegations that Fitbit’s inaccurate heart-rate monitoring

was misleading and posed serious health and safety risks to consumers.

384

These allegations were supported by independent studies, including a study

378. See supra Part III.B.2.

379. See supra Part III.C.2.

380. See, e.g., Interview with Warren Postman, supra note 40; Interview with Jonathan D.

Selbin, supra note 41. Note that these figures take current fee-leveraging mechanisms

into account.

381. Even a 40% flat fee on $60 claims would not be profitable under the mass-arbitration

model.

382. See infra Appendix.

383. See, e.g., Frankel, supra note 268 (noting that, in the potential mass arbitration against

DirecTV, the underlying legal question for all claimants is simply whether DirecTV

improperly disclosed a data file).

384. See McLellan v. Fitbit, Inc., No. 16-cv-00036, 2017 WL 4551484, at *1 (N.D. Cal. Oct. 11,

2017).

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done by the Cleveland Clinic.

385

The district court granted Fitbit’s motion to

compel arbitration,

386

and the named plaintiff, Kate McLellan, decided to

arbitrate her claim. Lieff Cabraser, counsel for the Fitbit plaintiff class,

subsequently determined that the other claims (which ranged in value from

$20 to $80) were not marketable in a mass arbitration.

387

This was so even

though the claims had been marketable in the original class action. While the

details of McLellan’s arbitration proceedings are confidential, both the fact of

the arbitration and the studies mentioned above suggest that the claims had

merit. Accordingly, it is likely accurate to say that Fitbit’s arbitration clause,

and Fitbit’s arbitration clause alone, eliminated the remaining consumer

claims.

388

4. Generating aggregate settlements from individual claims

If settlements in litigation are a black box,

389

settlements in arbitration are

a black hole.

390

Under nondisclosure agreements (NDAs) in many settlement

contracts, claimants may be deemed ineligible for payouts if they share any

information about their claim or the settlement.

391

Moreover, for some mass

arbitrations there are no records of the settlement—or even of the claims.

These “secret” or “shadow” mass arbitrations are off the books, either for an

extended period of time or entirely. This typically occurs for one of two

reasons: Either (1) claims are filed in fora that do not keep public records; or

(2) claims are settled prior to the filing of any demands.

Secrecy notwithstanding, this study revealed a number of details about

settlements in mass arbitration. To date, there is no formalized procedural

structure for mass-arbitration settlements. For all the time defendants spent

385. See Robert Wang, Gordon Blackburn, Milind Desai, Dermot Phelan, Lauren Gillinov,

Penny Houghtaling & Marc Gillinov, Research Letter, Accuracy of Wrist-Worn Heart

Rate Monitors, 2 JAMA C

ARDIOLOGY 104, 104 (2017).

386. McLellan, 2017 WL 4551484, *5.

387. Interview with Jonathan D. Selbin, supra note 41.

388. See id. This findings in this Subpart align with David Horton and Andrea Cann

Chandrasekher’s conclusion that “very few individuals bother to arbitrate minor

grievances” post-Concepcion. See Horton & Chandrasekher, supra note 210, at 116-19. In

this regard our studies reinforce one another: Arbitration—mass or otherwise—does

not tend to capture low-value claims.

389. See Glover, supra note 132, at 1745-50; see also, e.g., Ben Depoorter, Essay, Law in the

Shadow of Bargaining: The Feedback Effect of Civil Settlements, 95 C

ORNELL L. REV. 957,

974-77 (2010).

390. See Estlund, supra note 38, at 682.

391. Interview with Warren Postman, supra note 40; see, e.g., u/steezefabreeze, Hey All!: I’ve

Received an Email from Keller Lenkner, R

EDDIT: R/POSTMATES (June 8, 2021, 5:19:14 PM

PDT), https://perma.cc/V4FL-JJHH; see also Interview with Nancy Erika Smith, supra

note 41 (discussing how NDAs can force information “out of the light of day”).

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designing their arbitration contracts, they spent little time designing or

designating post-dispute settlement structures. That makes sense, of course:

The one-off arbitral demands anticipated by defendants hardly called for a

complex settlement regime. More to the point, given that the goal of the

arbitration revolution was to eliminate claim resolution, spending time on

claim-resolution structures would have seemed irrational.

Yet even without formal structures for settlement, global settlements in

mass arbitrations are happening.

392

In some mass arbitrations, the parties

attempt to settle after a number of demands are filed or arbitrated on an

individual basis.

393

To the extent that demands are arbitrated, they function

like bellwether trials in mass-tort MDLs: The individual results help create a

global deal aimed at resolving the remaining claims.

394

Other mass arbitrations

involve few (if any) filings or individual proceedings prior to settlement; still

others do not get past the threat of mass filings before settlement talks ensue.

Regardless of how many demands are actually filed or arbitrated, mass-

arbitration defendants generally agree to global settlements given claimant fee

leveraging and the expense and risk of claims. This is true even if fees have

already been paid.

Investigation reveals three additional trends. First, even global deals in

mass arbitration must be effectuated on an individual basis. As a de facto

matter, the aggregate-settlement consent requirement of Model Rule of

Professional Conduct 1.8 operates in the background of the mass-arbitration

settlement process.

395

Second, global settlements in mass arbitration often

hinge on the participation of a prespecified supermajority of claimants.

396

Finally, while the claimants’ firm is ultimately in charge of securing releases

392. See, e.g., Erin Mulvaney, DoorDash Got Its Arbitration Wish, Costing Millions Upfront,

LOOMBERG L. (updated Feb. 12, 2020, 12:47 PM), https://perma.cc/BN5Y-LK7V

(noting that “mass arbitration leads to settlements” (capitalization altered)).

393. See, e.g., Arena v. Intuit Inc., No. 19-cv-02546, 2021 WL 834253, at *1 (N.D. Cal. Mar. 5,

2021); see also Interview with Warren Postman, supra note 40 (comparing the mass-

arbitration process to a mass-tort process with test cases and global settlements).

394. See Interview with Warren Postman, supra note 40.

395. MODEL RULES OF PRO. CONDUCT r. 1.8(g) (AM. BAR ASS’N 1983) (stating that an attorney

“who represents two or more clients shall not participate in making an aggregate

settlement” unless each client provides informed consent); see Declaration of Richard

Zitrin in Support of Respondent DoorDash, Inc.’s Opposition to Petitioners’ Motion

for a Temporary Restraining Order ¶¶ 1, 11-14, Abernathy v. DoorDash, Inc., No. 19-

cv-07545 (N.D. Cal. Nov. 22, 2019), ECF No. 35-1 (“My own plaintiffs’ firm clients,

desirous of representing clients in mass action cases, were hamstrung by the hoops

they would have to jump through to do so ethically [as a result of Model Rule 1.8].”);

Interview with Warren Postman, supra note 40 (noting that Model Rule 1.8 operates

unofficially in mass arbitration).

396. Interview with Warren Postman, supra note 40.

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1357

and distributing payouts, firms (at least for distribution) have tended to

contract with settlement administrators.

397

The settlement amounts in mass arbitration have so far tended to be

substantial, both relative to class-action settlements for similar claims and on

their own terms. Indeed, some settlements have provided claimants with

awards approximating their actual damages. But while generous settlements

are the norm, there are exceptions. In the Family Dollar mass arbitration, for

instance, the highest settlement amount reported to date is $4,000.

398

This is

less than what some employees believe they are owed for “years of poor

working conditions,” including having to sleep on cardboard boxes during

double and triple (unpaid) overtime shifts and having to contend with snakes

and lizards in breakrooms.

399

It is worth noting, however, that Family Dollar

is an unusually intransigent litigant in many respects—including with regard

to settlement.

400

By January 2021, just over three years after launching its practice, Keller

Lenkner had secured more than $200 million in settlements for claimants.

401

(This number is rather astonishing given that mass arbitration only began in

earnest in 2018; one advantage that mass arbitration has over settlements and

trials in court is speed.)

402

In the Intuit mass arbitration, claimants obtained

397. See, e.g., u/Majestic-Key2066, Keller Lenkner Settlement, REDDIT: R/POSTMATES (July 21,

2021, 11:49:49 AM PDT), https://perma.cc/5B94-SWCZ (referencing KCC as the

settlement administrator hired by Keller Lenkner).

398. See Allana Akhtar, Family Dollar Workers Said They Put in 80-Hour Weeks and Slept on

Cardboard to Keep Stores Open, B

US. INSIDER (Dec. 20, 2021, 1:13 PM), https://perma.cc/

K4FV-CVRE.

399. Id.; Jack Newsham & Peter Coutu, Family Dollar Forced Employees to Sign Arbitration

Agreements. Here’s What Happened When They Tried to Sue the Company over Unpaid

Wages., B

US. INSIDER (Dec. 21, 2021, 6:53 AM), https://perma.cc/F2LF-9QM2 (to locate,

select “View the live page”).

400. One claimant who spoke with journalists thought that her $400 settlement was low,

but she also reported that Family Dollar initially balked at her claim. Newsham &

Coutu, supra note 399. The claimant, Carrie Boles Lear, stated that she wished she had

fought harder in arbitration, but “Family Dollar took the position that she wasn’t

entitled to anything.” Id. An attorney who represented Family Dollar managers in a

2001 class-action suit noted that Family Dollar was “one of the most arrogant

companies I’ve ever dealt with in my 32 years of practicing law.” Id. (quoting Alabama

plaintiffs’ attorney Mark Petro).

401. Press Release, Keller Lenkner LLC, Keller Lenkner LLC Celebrates Third Anniversary

(Jan. 12, 2021), https://perma.cc/SQ5K-SL8F.

402. For example, in 2018, 37,000 female managers reached a $45 million settlement with

Family Dollar over gender-discrimination claims. Scott v. Fam. Dollar Stores, Inc.,

No. 08-cv-00540, 2018 WL 1321048, at *1-2, *5 (W.D.N.C. Mar. 14, 2018); Katherine

Peralta, Family Dollar Agrees to Pay $45 Million to Settle Long-Running Gender Bias

Lawsuit, R

ALEIGH NEWS & OBSERVER (updated Mar. 29, 2018, 9:57 AM),

https://perma.cc/PG4A-UUZM (to locate, select “View the live page”) (reporting that

the settlement purported to resolve the claims of 37,000 plaintiffs). That settlement

footnote continued on next page

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settlement offers for 100% of their out-of-pocket damages for each year they

had a claim.

403

The only public disclosure of mass-arbitration settlement

specifics—contained in a 2019 free writing prospectus Uber filed with the

Securities and Exchange Commission (SEC)—reveals that Uber had reserved

$132 million for anticipated settlements with 60,000 of its drivers who had

filed individual arbitration demands.

404

Uber estimated that its ultimate

liability to these drivers would fall somewhere between $146 million and $170

million.

405

And although FairShake is (largely) a different model of mass

arbitration,

406

it reports similarly high settlement figures: Consumers who

settled with “major corporations” like AT&T and Comcast using FairShake’s

platform received an average of $700.

407

Finally, reviewing (confidential)

individual settlement data reinforces the findings in this Subpart and

Part III.C.3 above: The average value of mass-arbitration claim marketability

starts in the high hundreds, and a number mass-arbitration payouts track

claimants’ actual damages.

408

That being said, mass arbitration is simply too

new of a practice (involving too few defendants, too few claim types, and too

few firms) and settlement data too difficult to obtain to draw anything more

than tentative conclusions about mass-arbitration settlement amounts.

Given generally high settlement values, it is perhaps not surprising that

defendants have erected a number of hurdles to the distribution of mass-

arbitration settlements. Although the precise details must again be kept

confidential, some generalized examples are illustrative. For one, defendants

often include provisions in arbitration agreements and settlement releases

was the product of ten years of class-wide litigation, Scott, 2018 WL 1321048, at *1, and

the underlying lawsuit dated back to 2002, Peralta, supra. Claimants in the Family

Dollar mass arbitration, in contrast, got checks in under two years. See Newsham &

Coutu, supra note 399.

403. See Intuit Motion to Intervene, supra note 244, at 6.

404. Uber Techs., Inc., Free Writing Prospectus (May 9, 2019), https://perma.cc/L9M6-

DZAP.

405. Id. DoorDash did not disclose specific numbers in its 2021 SEC registration statement,

but it nonetheless warned that mass-arbitration settlements posed a financial risk to

the company. See DoorDash, Inc., Registration Statement (Form S-1), at 54 (Nov. 13,

2020), https://perma.cc/3XSU-D4S3 (“It is possible that a resolution of one or more

such [arbitration] proceedings could result in substantial . . . settlement costs . . . that

could adversely affect our business, financial condition, and results of operations.”).

406. See supra notes 289-91 and accompanying text.

407. Alison DeNisco Rayome, Overcharged by a Tech Company? New Service Could Help Get

Your Money Back, CNET (Mar. 3, 2020, 7:00 AM PT), https://perma.cc/H5KT-WV3J

(“The FairShake platform uses AI to resolve customer claims with major corporations

within two months, with a typical settlement of $700.”); see also Weiss, supra note 291

(discussing FairShake settlements in the context of Comcast and AT&T); Corkery &

Silver-Greenberg, supra note 34 (same).

408. Individual settlement data is on file with the Author.

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74 STAN. L. REV. 1283 (2022)

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warning claimants that they will forfeit their payouts if they share any

information about the settlement.

409

For another, defendants have sought to

impose various artificial conditions on settlement payouts. In one case, a

defendant mailed claimants a nondescript postcard containing a unique

“settlement ID” and then insisted that claimants present this ID in order to

resolve their claims. If a claimant could not locate her ID—even if she could

provide other proof of settlement eligibility—her claim would be forfeited.

410

Similarly, some defendants have tried to require wet signatures for all

settlement documents; others have insisted that those wet signatures be

tendered in person. Still others have demanded that all signatures be wet and

sometimes even notarized.

411

Finally, many defendants have tried to avoid mass-arbitration settlement

altogether. In November 2019, Postmates (unsuccessfully) attempted to settle

its wage-theft litigation for $11.5 million in California court; the settlement

purported to resolve all claims by Postmates’ California couriers, many of

whom were already in arbitration.

412

In February 2020, DoorDash offered to

resolve all wage-theft claims brought by its drivers through a $39.5 million

state-court class-action settlement.

413

Northern District of California Judge

William Alsup declined to stay federal proceedings pending the settlement’s

approval, stating that he would not bless DoorDash’s “hypocrisy” regarding

409. See supra note 391 and accompanying text.

410. See Interview with Travis Lenkner & Warren Postman, supra note 40; Interview with

Cory L. Zajdel, supra note 40.

411. See Interview with Travis Lenkner & Warren Postman, supra note 40; Interview with

Cory L. Zajdel, supra note 40. But cf. Interview with Jonathan E. Paikin, supra note 42

(indicating that some of these formalities may be necessary to vet the underlying

claims).

412. See Frankel, supra note 334. In August 2021, San Francisco County Superior Court

Judge Suzanne Bolanos granted preliminary approval to a revised settlement that

increased the deal to $32 million and included new opt-out procedures for couriers.

Order Granting Preliminary Approval of Class Action Settlement at 2, Postmates

Classification Cases, No. CJC-20-005068 (Cal. Super. Ct. Aug. 12, 2021); see Plaintiffs’

Supplemental Briefing in Support of Motion for Preliminary Approval of Revised

Class Action Settlement at 3-5, Rimler v. Postmates, Inc., No. CGC-18-567868 (Cal.

Super. Ct. Dec. 14, 2020) (laying out the revised settlement terms).

413. “DoorDash never expected that so many would actually seek arbitration. Instead, in

irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very

device it denied to the workers, to avoid its duty to arbitrate.” Abernathy v. DoorDash,

Inc., 438 F. Supp. 3d 1062, 1068 (N.D. Cal. 2020); Alison Frankel, “This Hypocrisy Will Not

Be Blessed”: Judge Orders DoorDash to Arbitrate 5,000 Couriers’ Claims, R

EUTERS (Feb. 11,

2020, 4:10 PM), https://perma.cc/7LRR-B2L9 (reporting that “[i]nstead of paying the

requisite AAA fees” of $12 million, DoorDash tried to use a pending state-court class

action—“a case in which [it had] once attempted to compel arbitration”—to settle its

couriers’ claims for $39.5 million).

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arbitration.

414

And in November 2020, Intuit agreed to a $40 million class

settlement that purported to settle all claims against it, including those that

were in arbitration.

415

Northern District of California Judge Charles Breyer

refused to approve the settlement.

416

Intuit, Judge Breyer noted, was being

“hoisted by [its] own petard.”

417

IV. Contemporaneous and Future Developments

Part III showed that mass arbitration is a distinct business model and a

distinct form of aggregate dispute resolution. A mass-arbitration model, if you

can keep it.

418

This Part examines three significant ways in which the mass-arbitration

model must adapt. First, mass arbitration will require smaller firms to scale up,

rapidly and exponentially, both to comply with the ethical obligations of

individual representation and to cope with the increasing demands of mass

individual claiming. Second, mass arbitration will likely require scaled-up

arbitral fora to handle growing claim volume. Third, mass arbitration must

cope with and adapt to revised arbitration agreements—and where necessary,

challenge the legality of those revised contracts.

A. Scaled-Up Mass-Arbitration Firms

A viable aggregate dispute resolution practice must be able to retain its

clients. Ouster of counsel based on firm rivalries has long been a feature of

aggregate dispute resolution given the vast sums of money at stake;

419

mass

414. Abernathy, 438 F. Supp. 3d at 1067-68 (“This hypocrisy will not be blessed, at least by

this order.”).

415. See Arena v. Intuit Inc., No. 19-cv-02546, 2021 WL 834253, at *1-3 (N.D. Cal. Mar. 5,

2021).

416. Id. at *1.

417. Transcript of Proceedings at 10, Intuit, 2021 WL 834253 (No. 19-cv-02546), ECF No. 206

(“I did think when I looked at this, and saw that, really, that this was a way to avoid or

otherwise circumscribe arbitration, that it seemed to be that Intuit was . . . hoisted by

[its] own petard.”).

418. With regards (and apologies) to Benjamin Franklin. As delegates left Independence

Hall in 1787 following the Constitutional Convention, Franklin was asked: “Doctor,

what have we got? A republic or a monarchy?” “A republic,” Franklin supposedly

replied, “if you can keep it.” See Gillian Brockell, “A Republic, if You Can Keep It”: Did Ben

Franklin Really Say Impeachment Day’s Favorite Quote?, W

ASH. POST (Dec. 18, 2019,

6:36 PM EST), https://perma.cc/RK86-WMQJ.

419. For example, the adequacy objection that helped destroy the settlement class in

Amchem Products, Inc. v. Windsor, 521 U.S. 591, 607-08, 625-28 (1997), was brought by

Fred Baron, a plaintiffs’ attorney whose asbestos-heavy portfolio would have been

eliminated by the Amchem settlement. See Linda S. Mullenix, Standing and Other

Dispositive Motions After Amchem and Ortiz: The Problem of “Logically Antecedent”

footnote continued on next page

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arbitration is not meaningfully different in this regard. This dynamic was at

play, for instance, during Intuit’s attempt to settle mass-arbitration claims out

from under mass-arbitration counsel by way of a class that purported to

include the arbitration claimants.

420

Indeed, the Intuit story is just as much

about Intuit trying to cripple a mass arbitration as it is about rival plaintiffs’

firms trying to collect hefty fees for themselves by engineering a reverse-

auction class settlement.

421

It is defense-initiated attempts to oust counsel, however, that have so far

dominated the mass-arbitration landscape. A number of defendants have tried

to disqualify mass-arbitration firms—especially Keller Lenkner—from

representing clients in mass-arbitration proceedings. Importantly, defendants

have sought to disqualify these firms based on key features of the mass-

arbitration model.

For example, some defendants have argued that Keller Lenkner’s

representation of many individual claimants violates ethical constraints on

group representation, particularly given the firm’s small size.

422

Keller

Lenkner has responded to this concern by disclosing its relationships with

other law firms, including Quinn Emanuel and Troxel Law.

423

And while

courts have recognized the concern in a few mass-arbitration rulings, it

generally has not been sufficient to warrant disqualification.

424

Nonetheless,

Inquiries, 2004 MICH. ST. L. REV. 703, 713 (observing that the Amchem objectors were

represented by Baron’s firm); David Marcus, The History of the Modern Class Action, Part

II: Litigation and Legitimacy 1981-1994, 86 F

ORDHAM L. REV. 1785, 1823-24 (2018) (noting

that asbestos class actions “jeopardized fee-generating relationships individual tort

lawyers had with their clients,” and describing Baron as “[i]mplacably and bitterly

opposed to an asbestos class action”—so much so that he “spent $4.5 million fighting

major asbestos class settlements”).

420. See supra notes 415-17 and accompanying text.

421. The notion of a reverse-auction class settlement is well understood and well traced in

the scholarly literature and in class-action jurisprudence. A reverse-auction class

settlement is one that is results when a defendant harnesses the competition among

plaintiffs’ firms for control of the class litigation (and, by extension, associated

attorney’s fees), with the lowest bidder among the firms “winning” the right to settle

with the defendant. See John C. Coffee, Jr., Class Wars: The Dilemma of the Mass Tort

Class Action, 95 C

OLUM. L. REV. 1343, 1354 (1995) (explaining the reverse-auction

phenomenon); Reynolds v. Beneficial Nat’l Bank, 288 F.3d 277, 282-83, 289 (7th Cir.

2002) (reversing the district court’s approval of a class settlement in part because the

settlement could have been the product of a reverse auction).

422. See, e.g., Intuit Opposition to Motion, supra note 246, at 1-2, 6-7.

423. See CenturyLink Postman Declaration, supra note 248, ¶ 7.

424. See, e.g., In re CenturyLink Sales Pracs. & Sec. Litig., No. 17-md-02795, 2020 WL

3513547, at *7-8, *10-11 (D. Minn. June 29, 2020); see also, e.g., Arena v. Intuit Inc.,

No. 19-cv-02546, 2021 WL 834253, at *4, *7-11 (N.D. Cal. Mar. 5, 2021) (noting that

Keller Lenkner may not be “looking out for its clients’ best interests” but rejecting a

proposed settlement on other grounds).

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Keller Lenkner has reacted to the defendants’ arguments by scaling up—and

scaling up fast. The firm now has more than 100 employees, a full client-

services department, and an advanced technology apparatus.

425

And at least

according to its attorneys, the firm is willing and able to litigate as many

arbitration demands as possible, as quickly as possible.

426

Although defense

attorneys still believe Keller Lenkner lacks the staffing necessary to pursue

thousands of individual demands,

427

it is clear that mass arbitration will

require large, well-resourced firms going forward.

It may also require many different firms. In addition to size-related

concerns, defendants have tried to leverage procedural posture—recall that

mass arbitrations often follow the stay (or dismissal) of a class or collective

action

428

—to disqualify counsel. Chipotle, for instance, said that law firms

representing plaintiffs dismissed from a wage-and-hour collective action

should not be allowed to represent those plaintiffs in arbitration.

429

encouraging claimants to (initially) pursue their claims in court, Chipotle

argued, the firms had compromised their clients’ interests.

430

The District of

Colorado rejected this argument.

431

But had Chipotle succeeded, new firms

would have needed to step in and fill the gap.

Disqualification motions are not just a tactic in mass arbitration; they are

common across the aggregate dispute resolution landscape.

432

Accordingly,

defendants will almost certainly file these motions against mass-arbitration

firms in the future. Firms can fend off disqualification, at least in part, by

scaling up. And in the meantime, having many mass-arbitration firms will

allow claims to continue even if disqualification motions succeed.

B. Scaled-Up Arbitral Fora

The sustainability of the mass-arbitration model also depends on arbitral

fora that can expeditiously handle a large volume of claims. The ability to

arbitrate claims individually (or credibly threaten to do so) is not just a

425. See CenturyLink Postman Declaration, supra note 248, ¶ 5; Interview with Warren

Postman, supra note 40.

426. See, e.g., Interview with Warren Postman, supra note 40.

427. See Interview with Anonymous No. 4, supra note 42.

428. See supra notes 258-59 and accompanying text.

429. Chipotle Mexican Grill, Inc.’s Motion to Dismiss Opt-In Plaintiffs Bound by Chipotle’s

Arbitration Agreement at 21-23, Turner v. Chipotle Mex. Grill, Inc., No. 14-cv-02612,

2018 WL 11314701 (D. Colo. Aug. 3, 2018), ECF No. 172.

430. See id. at 22-23.

431. Turner, 2018 WL 11314701, at *7.

432. See, e.g., Diva Limousine, Ltd. v. Uber Techs., Inc., No. 18-cv-05546, 2019 WL 144589, at

*1-2 (N.D. Cal. Jan. 9, 2019).

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function of a firm’s economic wherewithal; it is also a function of the

designated forum’s demand-processing capabilities. In more concrete terms,

arbitration fees are assessed as the proceeding progresses: There are unique

costs associated with filing, arbitrator retention, preliminary review, and so

on. If a defendant knows that arbitration proceedings will not realistically

move forward, a plaintiffs’ firm—even one with the means to bring thousands

of claims—will not be able to leverage fees.

433

Arbitral fora, then, must also scale up. The speed at which these fora

operate is not suitable for mass arbitration today. In the Postmates mass

arbitration, for example, assigning arbitrators to fifty individual cases took

over three months.

434

As Postmates put it, the “AAA is [just not] equipped to

handle that many arbitrations at the same time.”

435

An individual mass-claiming model could never function in the taxpayer-

funded, resource-strapped court system. The AAA or JAMS, however, could

easily handle $50 million worth of claims across a large set of individual

proceedings.

436

Scaling up these fora, then, is largely a matter of logistics.

437

But the fora must also have an incentive to grow, and that incentive likely

depends on whether mass arbitrations will stay in front of AAA and JAMS

arbitrators. This is significant, as both the AAA and JAMS have reason to

suspect mass arbitrations could go elsewhere.

Because mass arbitration depends on the ability to actually litigate (or

threaten to litigate) claims, defendants might move arbitration proceedings

from heavily capitalized, large fora like the AAA and JAMS to small outfits

incapable of processing more than a few claims a year. Changes along these

lines would not only deter the AAA and JAMS from scaling up; they would

also hamstring mass arbitration’s settlement power in cases sent to smaller

fora. Corporate strategy here would most likely look similar to AT&T’s

strategy in Concepcion: point to the presumably “friendly” rules of the new

forum in hopes that the court will not notice (or care) that the forum is

433. See supra Parts III.C.1-.2.

434. Postmates Initial Complaint, supra note 273, ¶ 49 (“Although Postmates paid filing fees

for fifty arbitrations in December 2019, as of March 25, 2020, only 21 arbitrators had

been confirmed and only two arbitrators had conducted individual hearings.”).

435. First Amended Complaint for Declaratory & Injunctive Relief ¶ 43, Postmates Inc. v.

10,356 Individuals, No. 20-cv-02783 (C.D. Cal. Apr. 2, 2020), ECF No. 7.

436. Because these private fora obtain funding through fees, they do not rely on taxpayer

dollars and are not subject to statutory resource limitations. See, e.g., supra text

accompanying note 351 (noting that a set of arbitration proceedings before the AAA

could cost Uber more than $90 million).

437. Indeed, both the AAA and JAMS have gotten better at handling mass arbitrations in

recent years. See Interview with Matthew C. Helland, supra note 40.

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literally incapable of processing claims.

438

To date, corporations have not

taken this approach. Yet as the next Subpart explains, corporations have

attempted to achieve similar results by specifying defendant-friendly fora in

their revised agreements.

C. Revised Agreements

With their “friendly” arbitration agreements, corporate defendants may

well have been hoisted by their own petards.

439

But defendants still have the

power: They drafted the agreements, which means they can change them.

440

Live by the sword, die by the sword.

Indeed, perhaps the most significant challenge to the future of mass

arbitration is revised arbitration agreements. This Subpart focuses on three

types of revisions with which the mass-arbitration model must cope: (1) the

elimination of fee-shifting provisions; (2) the insertion of “batching”

provisions; and (3) the insertion of provisions that move mass-arbitration

claims to defendant-friendly arbitral fora.

1. Eliminating fee provisions

One judge has referred to mass arbitration’s leveraging of fee-shifting

provisions as “poetic justice.”

441

Some take the view, however, that the price

tag of this particular justice—whatever its poetic force—might be a bit

excessive. Across the arbitration-services industry, organizations have

scrambled to adapt their protocols to mass arbitration. The AAA recently

adopted a sliding-scale fee schedule that reduces up-front filing fees as more

related claims are filed.

442

And new arbitration outlets are engaged in fierce

competition with one another (not to mention the AAA) to cash in on what

they see as a mass-arbitration business opportunity. Some small arbitration

services—for instance, New Era ADR and FedArb—openly court businesses

with promises of cost savings by way of virtual platforms (New Era)

443

438. See supra notes 178-79 and accompanying text; see also Miller, supra note 103, at 800

(noting that arbitration agreements like the one in Concepcion “typically offered a wide

variety of goodies to customers”).

439. See supra note 417 and accompanying text.

440. See Glover, supra note 75, at 3059; Fitzpatrick, supra note 152, at 176-79.

441. Transcript of Proceedings at 27, Abernathy v. Doordash, Inc., No. 19-cv-07545 (N.D.

Cal. Nov. 27, 2019), ECF No. 67; see also, e.g., Michael E. McCarthy, Jeff E. Scott &

Robert J. Herrington, Stemming the Tide of Mass Arbitration, G

REENBERG TRAURIG

(June 7, 2021), https://perma.cc/F3SK-LU9M.

442. See Am. Arb. Ass’n, supra note 244, at 1-3.

443. See Press Release, New Era ADR, Tech Startup New Era ADR Aims to Disrupt

Traditional Litigation and Dispute Resolution with New Business Platform (Apr. 20,

footnote continued on next page

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protocols designed to ease the burdens of mass arbitration (FedArb).

444

October 2021, National Arbitration and Mediation issued a “customized fee

structure to address issues that have arisen as a result of mass filings of

arbitration demands in the Employment and Consumer arenas.”

445

Whatever arbitral fora do with their fee schedules, many fee-shifting

provisions in arbitration contracts are not long for this world. In May 2021,

Gibson Dunn recommended that defendants rethink provisions committing

them to paying arbitration fees.

446

Gibson Dunn further suggested that

companies add new fee-shifting provisions—this time shifting fees to the

plaintiffs—for claims deemed by an arbitrator to be frivolous.

447

Scores of

companies have already changed their arbitration agreements to avoid

undesirable fee shifting.

448

And some companies have gone even further,

battling to get their revised agreements applied retroactively.

449

Mass-arbitration attorneys no doubt anticipated the removal of at least

some fee-shifting provisions. Fee leveraging at the current scale was always

going to be a one-time opportunity—essentially a chance to short sell on a

market error. As companies remove fee-shifting provisions and claimant

leverage begins to decrease, the mass-arbitration model will almost certainly

2021), https://perma.cc/GMC5-MCLB; see also Digital Arbitration, NEW ERA ADR,

https://perma.cc/YA8K-W4ZL (archived Aug. 23, 2022) (“[W]e made the entire

[arbitration] process fully digital and fully virtual so you can tell your story to an

experienced arbitrator from anywhere in the world.”).

444. FedArb promises a structure that “backends the administrative costs, . . . adjudicate[s]

the claims on a fixed cost basis[,] and . . . [uses] an MDL type procedure to deal with

common issues.” Alison Frankel, Another Arbitration Service—FedArb—Establishes

New Mass Arbitration Protocol 1 (2020), https://perma.cc/7CHS-YJK5 (quoting an

email statement from FedArb CEO Ken Hagen).

445. Press Release, Nat’l Arb. & Mediation, NAM Introduces a Customized Fee Structure for

Mass Arbitration Filings in the Employment and Consumer ADR Arenas (Oct. 20,

2021), https://perma.cc/HR8L-VJUL.

446. See Michael Holecek, As Mass Arbitrations Proliferate, Companies Have Deployed Strategies

for Deterring and Defending Against Them, G

IBSON DUNN (May 24, 2021),

https://perma.cc/WH45-7NLZ.

447. Id.

448. See Interview with Cory L. Zajdel, supra note 40. Compare, e.g., Terms of Use ¶ 17,

ICKETMASTER, https://perma.cc/5MMJ-Y7V8 (archived May 19, 2022) [hereinafter

Ticketmaster 2022 Terms] (“If you commence an arbitration in accordance with the

Terms, you will be required to pay New Era ADR’s $300 filing fee.”), with Terms of Use,

ICKETMASTER (archived Oct. 1, 2013) (“We will reimburse [JAMS] fees for claims

totaling less than $10,000 . . . .”), reprinted in Exhibit 51 to Declaration of Kimberly

Tobias in Support of Defendants’ Amended Motion to Compel Arbitration,

Oberstein v. Live Nation Ent., Inc., No. 20-cv-03888, 2021 WL 4772885 (C.D. Cal.

Sept. 20, 2021), ECF No. 85-51.

449. See Interview with Cory L. Zajdel, supra note 40.

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74 STAN. L. REV. 1283 (2022)

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become less attractive to firms and third-party funders. Are the agreements

above, then, the death knell for mass arbitration?

Likely not. For one, individual arbitration is expensive even without fee

shifting. Defendants incur substantial arbitration costs beyond filing fees;

multiplied by 1,000 or 10,000, these costs are still sufficient to generate

significant settlement pressure.

450

For another, established mass-arbitration

firms will not always need to front the filing fees for tens of thousands of

demands. In mass arbitration’s infancy, the fronting of fees was no doubt

necessary for firms to show that their threats were not empty. In 2018, a

defendant corporation may well have laughed at a new firm’s threat to file

12,500 demands and to advance 12,500 filing fees. Today, less so. For yet

another, current law imposes limits on the arbitration fees defendants can

force claimants to pay.

451

Accordingly, companies trying to contract around

their fee obligations will likely find their agreements struck down on

unconscionability or effective-vindication grounds.

452

Further, not all corporate defendants will remove fee-shifting provisions

from their arbitration agreements. Corporations with fewer resources, less

legal sophistication, or less flexibility (or some combination of the three) will

likely be less able to adapt. Companies that cannot quickly revise their

agreements—agreements essentially copied and pasted from AT&T (or a

450. See, e.g., Helland, supra note 336, at 217, 222; Am. Arb. Ass’n, supra note 241, at 2-3:

Arbitration Schedule of Fees and Costs, supra note 241; see also, e.g., Interview with

Anonymous No. 4, supra note 42 (noting that mass arbitration relies on the general

leveraging of arbitration fees); Interview with Travis Lenkner & Warren Postman,

supra note 40 (observing that, beyond just up-front fees, defendants have created an

expensive dispute-resolution process filled with transaction costs).

451. Armendariz v. Found. Health Psychcare Servs., Inc., 6 P.3d 669, 687-89 (Cal. 2000); see

also supra note 372 and accompanying text. It is possible that the Supreme Court will

modify or reject the Armendariz rule; the rule’s validity has been central to recent

certiorari petitions. See, e.g., Petition for a Writ of Certiorari at 1-3, Winston & Strawn

LLP v. Ramos, 140 S. Ct. 108 (2019) (No. 18-1437), 2019 WL 2140500.

452. Indeed, courts have already struck down agreements that improperly shift costs to

arbitration claimants. See, e.g., Armendariz, 6 P.3d at 687-89; Tillman v. Com. Credit

Loans, Inc., 655 S.E.2d 362, 368-73 (N.C. 2008) (holding an arbitration agreement

unconscionable in part because of its “loser pays” provision); Delta Funding Corp. v.

Harris, 912 A.2d 104, 111-13 (N.J. 2006) (finding a provision allowing an arbitrator

“unfettered discretion to allocate the entire cost of arbitration to a consumer”

unconscionable under New Jersey law); Wis. Auto Title Loans, Inc. v. Jones, 714

N.W.2d 155, 175-76, 175 n.62 (Wis. 2006) (citing Armendariz and invalidating an

arbitration provision that required short-term, high-interest loan recipients to pay a

filing fee of $125); see also Rizzio v. Surpass Senior Living LLC, 492 P.3d 1031, 1035

(Ariz. 2021) (noting that the “financial costs of arbitration [can] prohibit a plaintiff

from vindicating her rights,” particularly when the plaintiff cannot pay and the

arbitration agreement contains no hardship provision); S. 707, 2019 Leg. (Cal. 2019)

(affirming the Armendariz decision and imposing penalties on companies that do not

pay their arbitration fees).

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similar corporate entity) pursuant to general legal advice

453

—will almost

certainly be mass-arbitration defendants soon enough. The future of mass

arbitration will likely involve fewer claims against the biggest and most

sophisticated national corporations and more claims against less nimble

regional and local outfits. For these outfits, after all, the full range of fee-

leveraging mechanisms will remain available.

Of course, changes to fee schedules and the removal of fee-shifting

provisions will still be consequential. These shifts will force claimants and

firms to rely more on mass arbitration’s other features, including the

imposition of asymmetric costs through individual arbitration proceedings.

But even these other features are not safe: As the next Subpart explains,

defendants are also targeting asymmetric cost imposition.

2. Inserting “batching” provisions

To reduce the settlement pressure imposed by the asymmetric costs of

individual arbitration proceedings,

454

defendants have inserted “batching”

provisions into their agreements.

455

In addition, arbitration outfits have

adopted mass-arbitration protocols that include batching.

456

While precise

details vary across agreements and fora, the basic idea is that after a certain

number of legally and factually related demands are filed, those demands are

“batched” into a group for resolution in one proceeding.

457

The “batch” then

gets assigned to an arbitrator or panel of arbitrators, and it triggers a single

filing fee.

458

Notably, some batching provisions exist alongside contractual

class-action waivers.

459

Batching provisions may diminish the attractiveness of the mass-

arbitration model by reducing its ability to use individual claiming to the

plaintiff’s advantage. Indeed, FedArb markets its batching protocol—under

which a panel of arbitrators conducts a single proceeding to resolve, in a

binding fashion, common pretrial issues—along these lines: “[T]here will be

453. See, e.g., Miller, supra note 103, at 820 n. 123.

454. See supra Part III.C.2.

455. See Holecek, supra note 446.

456. See infra notes 460, 464-66, 471 and accompanying text.

457. This resolution could be a general determination regarding common issues, or it could

be a set of decisions on the merits for a small group of test cases.

458. Holecek, supra note 446.

459. See, e.g., Terms of Use: Dispute Resolution ¶¶ III, VII, GRUBHUB, https://perma.cc/8RXH-

XL7M

(archived May 19, 2022) (containing both a class-action waiver and a batching

provision, and stating that the batching provision “shall in no way be interpreted as

authorizing class arbitration of any kind”); Terms of Service (U.S.) ¶ 19(c), (g), D

RIZLY,

https://perma.cc/6JWB-7YQ4 (archived May 19, 2022) (same).

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74 STAN. L. REV. 1283 (2022)

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little need for individual arbitrations, thereby expediting payment and greatly

reducing costs—including the elimination of millions in arbitration fees.”

460

Batching could accordingly put pressure on other parts of the mass-

arbitration model, particularly the claim-value threshold.

461

Batching ensures

that only easy-to-prove, near–slam-dunk cases will be economically attractive

for firms to pursue.

462

As a result, claims of racial discrimination and sexual

harassment—which are typically of nominal value and present challenges

regarding proof—could be left out of the mass-arbitration equation.

463

Despite the increase in batching provisions and protocols, it is not clear

that batching will be desirable in the long run. Batching is not guaranteed to

create efficiency or reduce costs, and batching provisions could ultimately

disadvantage both claimants and defendants in mass-arbitration proceedings.

By way of example, consider the CPR’s batching protocol. When more

than thirty employment demands of a “nearly identical nature” come before

the CPR, the CPR randomly selects ten demands to proceed as test cases.

464

After the test cases have concluded, both sides enter into a mediation

process.

465

If mediation does not produce a global resolution, the remaining

demands move forward either in arbitration or in court.

466

The threat of

individual proceedings on the back end of mediation may incentivize both

parties to reach a global settlement based on the test cases—at least to the

extent those cases generated uniform results.

467

This would be an efficient

outcome.

But this potentially desirable outcome is not required, and it does not

appear particularly inevitable given that the test cases are not binding or

precedential. Nonbinding bellwethers are not well poised to guard against

strategic holdout, where a party threatens inefficiency or delay to change the

460. Kennen D. Hagen, Mass Arbitrations, TODAY’S GEN. COUNS., Sept. 2021, at 12, 13. Hagen is

the CEO and president of FedArb. Id.

461. See supra Part III.C.3.

462. Because batching makes fee leveraging more challenging, the claims that are filed are

more likely to move forward. The merits of those claims will therefore be more

important, and firms will be more selective in which claims they take on.

463. See Glover, supra note 132, at 1772 & n.221 (noting that “employment discrimination

cases often concern low-value claims held by low-wage earners”); infra notes 524-25

and accompanying text.

464. INT’L INST. FOR CONFLICT PREVENTION & RESOL., WHAT IS THE EMPLOYMENT-RELATED

MASS CLAIMS PROTOCOL? 2-3 (2019), https://perma.cc/9ZDN-DVLN.

465. Id. at 5-6.

466. Id. at 1, 6-7.

467. Cf., e.g., Deborah R. Hensler & Mark A. Peterson, Understanding Mass Personal Injury

Litigation: A Socio-legal Analysis, 59 B

ROOK. L. REV. 961, 979-80 (1993) (noting that the

Bendectin mass-tort litigation “dwindled away” after a bellwether jury ruled against

the plaintiffs on causation).

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74 STAN. L. REV. 1283 (2022)

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price of settlement.

468

Even if the first ten claimants lost, for example, the

eleventh claimant could threaten to reject the defendant’s offer and proceed

with arbitration to drive up the settlement price.

469

And even if those ten

claimants won, the defendant could still threaten to sabotage mediation and

opt out of arbitration to drive the settlement price down.

470

These results

benefit neither party.

Even binding test cases may not solve the problem—at least not under

existing protocols. Unlike the CPR, New Era ADR provides for three

bellwether trials, the results of which are precedential in cases involving

common issues of law and fact.

471

Three binding bellwethers could usher in a

global settlement without the challenges described above. But two additional

things must be true for this to occur, and neither seems particularly likely

under the New Era protocol. First, the findings and outcomes of the three

bellwethers must be in accord with one another. Each side selects one of the

bellwethers,

472

however, meaning that the results could easily differ. Second,

the selected bellwethers must actually represent the mass of claims.

473

With

only three bellwethers (two of which are selected by the parties), this seems

improbable at best.

More fundamentally, to the extent batching protocols shift the mass-

arbitration model into a class-action or MDL model, it is not clear that this

shift would be preferable for either defendants or claimants. All else equal, if

defendants are stuck with an arbitration that looks like a class action or an

MDL consolidation, they would probably prefer to be in court. Indeed, court

proceedings are less expensive, provide for substantial judicial review, and

468. See, e.g., Alain Frécon, Delaying Tactics in Arbitration, DISP. RESOL. J., Nov. 2004/Jan.

2005, at 40, 46 (“Sometimes, a party seeks to delay arbitration . . . in the hope that the

other side will be forced to abandon the proceedings or agree to a settlement.”).

469. See INT’L INST. FOR CONFLICT PREVENTION & RESOL., supra note 464, at 7.

470. See id. at 6-7.

471. Rules and Procedures ¶¶ 2(x)-(y), 6(b)(iii), NEW ERA ADR, https://perma.cc/FF5P-XNRA

(last updated Mar. 2, 2022).

472. Id. ¶ 6(b)(iii)(3)(b) (“Claimant(s), collectively on the one hand, and Respondent(s),

collectively on the other hand, will each select one ‘Bellwether Case’ from all the cases

that were filed.”).

473. That is, they must not offend long-standing notions of due process. See, e.g., In re

Chevron U.S.A., Inc., 109 F.3d 1016, 1017, 1020-21 (5th Cir. 1997) (rejecting the trial

court’s plan to use bellwether cases for settlement purposes, finding that the cases

“lack[ed] the requisite level of representativeness so that the results could permit a

court to draw sufficiently reliable inferences about the whole”). While the Chevron

court was “sympathetic to the efforts of the [trial] court to control its docket and to

move this case along,” its “sympathies . . . [did] not outweigh . . . due process concerns.”

Id. at 1021.

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74 STAN. L. REV. 1283 (2022)

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generally present defendants with favorable doctrine.

474

And for plaintiffs’

attorneys, batching transforms the lucrative mass-arbitration model into a

more expensive version of a class action or an MDL.

3. Provisions that change the arbitral forum

In response to mass arbitration, some defendants have sought to change

the arbitral forum—either by designating a new forum or designing new

procedures for the forum, or both. Defendants have already begun using

contractual revisions to move arbitration proceedings from neutral fora like

the AAA or JAMS to more defendant-friendly outfits. In 2019, for instance,

DoorDash found itself “dissatisfied with the AAA’s due process protocol

requirements and [its] requirements for . . . filing fees” in light of mass-

arbitration demands.

475

In response, Gibson Dunn reached out to the CPR to

request protocols “created for DoorDash, at DoorDash’s request, and with the

input of DoorDash and its lawyers.”

476

The CPR agreed to create these

protocols,

477

at which point DoorDash sent its drivers revised agreements

474. See, e.g., Charles Silver & Maria Glover, Zombie Class Actions, SCOTUSBLOG (Sept. 8,

2011, 10:16 AM), https://perma.cc/J6Y6-KZG9. The favorable-doctrine point might

help explain Amazon’s recent retreat to the class action. See supra note 35 and

accompanying text. Facing a host of novel strict-liability claims arising under state

law, see, e.g., Bolger v. Amazon.com, LLC, 267 Cal. Rptr. 3d 601, 605 (Ct. App. 2020)

(“Under established principles of strict liability, Amazon should be held liable if a

product sold through its website turns out to be defective.”); Loomis v. Amazon.com

LLC, 277 Cal. Rptr. 3d 769, 779 (Ct. App. 2021) (“[W]e are persuaded that Amazon’s own

business practices make it a direct link in the vertical chain of distribution under

California’s strict liability doctrine.”), Amazon issued new contracts requiring all

claims against the company to be brought in its home state of Washington, Robert,

supra note 35. Washington does not have case law resembling Bolger or Loomis;

accordingly, Amazon could have removed its arbitration provision (in part) to obtain

favorable precedent in the state. See Will Amazon Be Liable for Defective Products in

Washington?, R

USSELL & HILL, PLLC: BLOG (Aug. 17, 2020), https://perma.cc/3FZY-

CPB4 (“Right now, there is no consensus [in Washington] as to whether . . . Amazon

should be considered only a neutral middle-man distributor of products or if they

should be held legally liable for injuries . . . .”); Todd Bishop, Landmark Product Liability

Ruling Puts Amazon’s Third-Party Marketplace in a New Legal Pinch, G

EEKWIRE (updated

Aug. 14, 2020, 2:30 PM), https://perma.cc/6DYK-55TZ (noting Amazon’s hostility to

the Bolger decision). Amazon would not have been able to obtain similar precedent

through private arbitration.

475. [Unredacted] Declaration of Aaron Zigler in Support of Petitioners’ Reply in Support

of Amended Motion to Compel Arbitration ¶¶ 11-12, Abernathy v. DoorDash, Inc., 438

F. Supp. 3d 1062 (N.D. Cal. 2020) (No. 19-cv-07545), ECF No. 180-3 (quoting a CPR email

describing a conversation with Gibson Dunn attorney Michael Holecek).

476. Id. ¶¶ 8-14.

477. Id. ¶ 9; see Declaration of Joshua Lipshutz in Support of Respondent DoorDash, Inc.’s

Opposition to Petitioners’ Amended Motion to Compel Arbitration at 414, Abernathy,

438 F. Supp. 3d 1062 (No. 19-cv-07545), ECF No. 157-5.

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1371

designating the CPR as its arbitral forum.

478

Emails reveal that the CPR saw

DoorDash’s request as a lucrative business opportunity, especially given

Gibson Dunn’s “large book” of clients.

479

Claimants challenged the new

agreement, but Northern District of California Judge Edward Chen was not

persuaded there had been any “catering or favoritism” or that the protocols

were “so biased that [they] negate[d] the agreement to arbitrate.”

480

For its part,

the CPR said that it did not draft its new protocols to “woo employers.”

481

Other defendants are following DoorDash’s lead. Ticketmaster, for

example, changed its arbitral forum to New Era ADR shortly before a court

granted its motion to compel arbitration on antitrust claims.

482

This timing

does not seem coincidental: New Era bills itself as cheaper for businesses than

other arbitral fora.

483

The new Ticketmaster agreement also provides that

consumers must pay attorney’s fees, not to mention the $300 New Era filing

fee.

484

In the short term, these sorts of revisions are unlikely to meet with much

resistance. Arbitral fora are businesses, after all, and corporations can decide

which organizations get their business. Market pressure may lead smaller

478. Motion for a Temporary Restraining Order at 7, Abernathy v. DoorDash, Inc., No. 19-

cv-07545 (N.D. Cal. Nov. 17, 2019), ECF No. 10 (noting that DoorDash “began imposing

a new arbitration agreement . . . provid[ing] for arbitration governed by” CPR rules a

mere three days after the CPR issued its new protocols); see, e.g., Press Release, Int’l Inst.

for Conflict Prevention & Resol., CPR Launches New Mass Claims Protocol and

Procedure (Nov. 6, 2019), https://perma.cc/2DSS-B5BV.

479. Alison Frankel, The Problem with Outsourcing Justice to Mass Arbitration Services, REUTERS

(Feb. 27, 2020, 5:21 PM) (quoting an email from CPR vice president Helena Erickson),

https://perma.cc/E94Q-QXGL.

480. McGrath v. DoorDash, Inc., No. 19-cv-05279, 2020 WL 6526129, at *9-11 (N.D. Cal.

Nov. 5, 2020) (noting, however, that “Gibson Dunn’s involvement in the development

of the [protocols] may raise some concern”).

481. Frankel, supra note 479 (quoting a CPR statement). More recently, the CPR created an

“employment-related mass claims task force” comprised of attorneys from various

plaintiffs’ and defense firms “in an effort to continue to improve its procedures.” See

Employment-Related Mass Claims Task Force, I

NT’L INST. FOR CONFLICT PREVENTION &

RESOL. (capitalization altered), https://perma.cc/7C93-26MZ (archived May 19, 2022).

In 2021 DoorDash changed its arbitral forum once again, this time selecting ADR

Services. See Terms and Conditions—United States: DoorDash Consumers ¶ 12(c),

OORDASH, https://perma.cc/2NQZ-Z4FK (archived May 19, 2022) (to locate, select

“View the live page”); Terms of Service—United States: DoorDash Merchants ¶ 13.2,

OORDASH, https://perma.cc/4RUC-G57T (archived May 19, 2022) (to locate, select

“View the live page”). For more on ADR Services, see About ADR Services, Inc., ADR

SERVS., INC., https://perma.cc/76CS-AZWJ (archived May 19, 2022).

482. Complaint, supra note 238, ¶¶ 1-2, 6; Oberstein v. Live Nation Ent., Inc., No. 20-cv-

03888, 2021 WL 4772885, at *1 (C.D. Cal. Sept. 20, 2021), appeal filed, No. 21-56200 (9th

Cir. Oct. 29, 2021); see also supra note 448.

483. See, e.g., Press Release, New Era ADR, supra note 443.

484. Ticketmaster 2022 Terms, supra note 448, ¶ 17.

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74 STAN. L. REV. 1283 (2022)

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outfits to develop defendant-friendly protocols,

485

but defendants are free to

forum shop so long as everything seems “fair and impartial.”

486

Long term, though, there may be limits to how far defendants can go in

revising their agreements to select new and friendly fora. Revisions that

provide for unfair procedures or specify a forum with unfair procedures (or

both)

487

may collide with state unconscionability and effective-vindication

limitations. Indeed, these sorts of revisions would look like the arbitration

provisions defendants tried in the days before “friendly” agreements and

Concepcion.

488

Contracts that specify wholly defendant-created arbitration

procedures are not contracts for alternative dispute resolution permitted by

the FAA; they are contracts designed to ensure defendant-friendly outcomes

and eliminate claims.

But drawing the line is challenging. Defendants are smart, and they are

unlikely to embrace blatantly unfair provisions or fora. This is true not just

because unfair revisions could meet with resistance in the courts, but also

because subtler and more effective revisions are possible. Consider a revision

providing for an arbitral forum that is functionally incapable of processing

more than a few claims each year. Perhaps this revision would fail (say, for

contractual impossibility

489

). But it is ostensibly neutral, and there is always

the risk that courts will be unwilling to peek behind the curtain.

That said, some revisions push dispute resolution beyond the traditional

bounds of arbitration more clearly than others. The Supreme Court, for

example, has defined arbitration to involve bilateral proceedings;

490

revisions

related to fees would likely be acceptable under this definition, but revisions

involving batching could be suspect. Although the Court has not fully

485. See, e.g., supra notes 475-79 and accompanying text.

486. See McGrath v. DoorDash, Inc., No. 19-cv-05279, 2020 WL 6526129, at *9-11 (N.D. Cal.

Nov. 5, 2020). Of course, “fair and impartial” does not mean “as neutral or claimant

friendly as established outfits like JAMS and the AAA.”

487. Cf. Dana A. Remus & Adam S. Zimmerman, The Corporate Settlement Mill, 101 VA. L.

REV. 129, 132-35 (2015) (describing the dangers of corporate “settlement mills,” which

“private parties may exclusively design, operate, and . . . oversee”).

488. See supra notes 176-77 and accompanying text.

489. See 9 U.S.C. § 2 (noting that arbitration agreements are enforceable “save upon such

grounds as exist at law or in equity for the revocation of any contract”).

490. See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 347-48 (2011); Am. Express

Co. v. It. Colors Rest., 570 U.S. 228, 238-39 (2013); see also supra notes 81-89 and

accompanying text.

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1373

examined the FAA’s outer limits,

491

it has made clear that the Act has

boundaries

492

and that its terms have independent meaning.

493

For decades, private parties’ authority to select arbitration has been

premised on the idea that the FAA “places arbitration agreements on equal

footing with all other contracts.”

494

But it is difficult to put arbitration

agreements on equal footing if “arbitration” is meaningless. Could a process

that indefinitely drags out the resolution of claims be fairly described as

“arbitration”? What about a process that only adjudicates bellwether claims,

five at a time, until the claimants agree to a global deal? The selection of a

forum that, as a functional matter, can only hear one or two claims yearly?

Mass arbitration’s future hinges in no small part on these fundamental

questions of statutory interpretation.

The same is true of mass arbitration’s potential to upend the class-action

counterrevolution. From a defendant’s perspective, a class action may well be

preferable to a mass arbitration—but nothing would be more preferable than a

private dispute-resolution system of the defendant’s own design. If courts

allow “adjudication by defendant” or permit dispute resolution that looks

nothing like traditional arbitration, then mass arbitration will have made

consumers and employees better off in the short term, but worse off in the

long term.

V. Case-Study Findings and Limitations

A. Mass-Arbitration Taxonomy

The previous Parts uncovered and distilled the principal features of the

mass-arbitration model and revealed what the future of the model may look

like. This Subpart synthesizes the Article’s findings and develops the first

working taxonomy of the mass-arbitration model. It also situates mass

arbitration—as a distinct model of aggregate dispute resolution—within the

broader landscape of complex procedure.

491. See, e.g., Zaborowski v. MHN Gov’t Servs., Inc., 601 F. App’x 461, 463 (9th Cir. 2014)

(finding unconscionable an arbitration agreement that, inter alia, gave the defendant

“near-unfettered” control over arbitrator selection and required claimants to pay a

filing fee of $2,600), cert. granted, 136 S. Ct. 27 (2015), and cert. dismissed, 136 S. Ct. 1539

(2016).

492. See Hall St. Assocs. v. Mattel, Inc., 552 U.S. 576, 578-81, 585-88 (2008) (holding that a

contract for de novo review of arbitral decisions was foreclosed by the FAA, which

provides the terms for judicial review of arbitration).

493. New Prime Inc. v. Oliveira, 139 S. Ct. 532, 536, 538-41, 543-44 (2019) (holding that the

term “employment” in the FAA has a historical meaning separate from and unalterable

by private contracts).

494. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006).

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Table 1 below taxonomizes what I term “Mass Arbitration 1.0,” which is

the mass-arbitration model as it originated (and still exists for thousands of

claims). It also taxonomizes what I term “Mass Arbitration 2.0 (Projected),”

which draws from the findings in this study to predict the future of mass

arbitration. Table 1 presents these two models alongside the two most

established forms of aggregate dispute resolution: class action and MDL

consolidation.

Table 1

Aggregate Dispute Resolution Taxonomy

Mass

Arbitration 1.0

Mass

Arbitration 2.0

(Projected)

Class Action

MDL

Consolidation

Procedural

Posture

Dismissal of

antecedent class

action; motion to

compel arbitration

Antecedent class

actions possible

(DirecTV,

Ticketmaster);

direct filings

Class complaint

filed

JPML transfer to

MDL judge

Creation of

the “Mass”

Attorneys retain

all individuals as

clients

Attorneys retain

all individuals as

clients

Class definition in

class complaint

Consolidation for

pretrial

proceedings (28

U.S.C. § 1407)

Review of the

“Mass”

Sufficiency of

demands

determined by

arbitrator

Filing threat alone

in some cases; in

others, sufficiency

of demands

determined by

(potentially) new

arbitrators in new

contracts

Class certification

analysis under

Rule 23(a), (b), (c)(4)

Motions to dismiss;

motions for

summary

judgment;

settlement

eligibility criteria

Claim-Value

Threshold

Minimum: High

hundreds to

> $2,000

Likely minimum:

~$1,000 to ~$3,000

Minimum: Low

($20 for Fitbit) or

individually

unmarketable

Low range or

individually

marketable

Claim Filing Individual demand

and high filing fee

Individual demand

and group

arbitration fee; fee

schedules

Single class

complaint and low

(or waived) filing

fee

Individual

complaints to start;

master complaint

in MDL

Claim

Management

Significant: Ethical

rules regarding

individual

representation

(intake/outflow)

Significant: Ethical

rules regarding

individual

representation

(intake/outflow)

Minimal: Absent

class members do

not need to (or do

not) participate

Minimal: Cases

stayed pending

consolidated

pretrial

proceedings

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74 STAN. L. REV. 1283 (2022)

1375

Mass

Arbitration 1.0

Mass

Arbitration 2.0

(Projected)

Class Action

MDL

Consolidation

Claim

Litigation

Individual

proceedings

Individual

proceedings;

possible batches

with test-case sets

Common question

of law and fact

determined on

class-wide basis

Consolidated

pretrial

proceedings;

handful of

bellwether trials

Settlement

Leverage

(Global)

Claimant mass;

statutory remedial

schemes;

leveraging of

significant up-

front fees and

arbitration fees;

transaction-cost

imposition (or

threat thereof)

Claimant mass;

statutory remedial

schemes; “slam-

dunk” claims;

leveraging of

nonwaivable

arbitration fees and

costs

Claimant mass;

certification of

class; publicity

(maybe)

Consolidated mass;

managerial

judging; publicity

(maybe)

Settlement

Structure

(Global)

Similar to mass-

tort grids

Potential for

lowball settlements

and reverse

auctions with

defendants’

potential class-

action optionality

Settlement grids Settlement grids or

mass-tort grids

Settlement

Distribution

(Global)

Individual;

contractually

imposed

procedural hurdles;

administration by

counsel and

counsel-hired

settlement

administrator

Individual;

contractually

imposed

procedural hurdles;

administration by

counsel and

counsel-hired

settlement

administrator

Class-wide notice

(cost shared);

court-appointed

(typically)

settlement

administrator

Settlement notice

(cost shared);

court-appointed

(typically)

settlement

administrator

Settlement

Review

(Global)

Little to no judicial

review; Model

Rule 1.8

Little to no judicial

review; Model

Rule 1.8

Rule 23(e); judge as

class fiduciary;

appeal

Quasi–class-action

authority; judge as

fiduciary;

applicable ethical

rules

Forum Rules Arbitral forum’s

rules, except as

amended by

contract or allowed

under the FAA

Forum rules

developed with

(potentially

significant)

defendant input or

by defendant’s

design in contract

Federal Rules of

Civil Procedure or

state equivalent

Federal Rules of

Civil Procedure

Firm Profile Well capitalized

(or sacrificial);

entrepreneurial;

risk seeking

Well established,

big firms; more

repeat players

Class counsel

dominated by

repeat players

Plaintiffs’ steering

committee

dominated by

repeat players

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74 STAN. L. REV. 1283 (2022)

1376

B. Study Limitations

This Subpart briefly discusses the limitations of the Article’s study. Two

limitations in particular are worth noting. First, mass arbitration is a rapidly

evolving phenomenon. Although this study captures the mass-arbitration

model at a critical moment in time, it is still only a single moment; future

developments will require future investigation. Second, the private nature of

arbitration means that the study does not cover the full universe of arbitration

demands. Some information is, and will remain, unobtainable.

495

These limitations shed light on several important points. Three bear

emphasis here. One, because some mass arbitrations do not appear in any

arbitral records, the precise size and scope of mass arbitration is a somewhat

open question. The arbitration market is comprised of both institutional and

ad hoc fora, and moves to ad hoc organizations will undoubtedly increase in

the coming years.

496

Together, the ad hoc market and the rise in direct-to-

arbitration filings (as opposed to filings that follow a class or collective action)

mean that some mass arbitrations will proceed entirely in secret—if they do

not do so already.

Two, with the exception of confirmed arbitration decisions,

497

it is an

open question whether (and how far) a given arbitral demand proceeded.

498

Relatedly, it is an open question for a given demand what (if anything) was

litigated and what (if anything) was decided.

Three, because arbitrator decisions on fees are confidential, it is not

entirely clear to what extent claimants, defendants, or both were granted fee

waivers. Many of the claimants in this investigation were eligible for fee

waivers—particularly for economic hardship—but information regarding

which claimants obtained those waivers is not available. Therefore, it is

impossible to pin down with precision the exact fee burdens in a given mass

arbitration.

The above limitations and the points that they raise would be (and are)

present in any study of arbitration.

499

Indeed, these shortcomings and issues

stem from features, not bugs, of the arbitration model. Arbitral proceedings

495. See, e.g., Estlund, supra note 38, at 684-86; Resnik, supra note 256, at 799.

496. See supra Part IV.C.3.

497. See, e.g., Simpson v. Peloton Interactive, Inc., No. 20-cv-07630, 2021 U.S. Dist. LEXIS

125416, at *1-3, *6-8 (S.D.N.Y. July 2, 2021).

498. I have, however, been able to uncover general data on this “known unknown.” In the

gig-economy mass arbitrations, proceedings have occurred to some degree in over 100

cases per defendant (close to 1,000 cases total). In the Amazon mass arbitration,

hundreds of demands have proceeded in some manner in the arbitral forum.

499. For another arbitration case study discussing similar limitations, see Horton &

Chandrasekher, supra note 33, at 476-78.

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74 STAN. L. REV. 1283 (2022)

1377

and decisions are confidential. Settlements are confidential, and defendants

threaten to deny payouts to individuals who discuss them. Defendants have

even attempted to make legal rights confidential by threatening to deny

payouts to individuals who mention those rights to others. Many individuals

do not understand the nature of their legal rights. Many defendants use

arbitration to keep it that way.

C. Study Takeaways

The discussion above reveals that mass arbitration is a new and distinct

model of dispute resolution. But it is more than that: It is also the first (and

only) meaningful response to the arbitration revolution and the class-action

counterrevolution. In its current form, however, mass arbitration’s half-life

may be short. Defendants—especially sophisticated, nimble, well-resourced

ones—are already adapting in ways that suggest Mass Arbitration 1.0 is not

long for this world. Importantly, though, defendants are not adapting by

abandoning arbitration. Instead, it seems like defendants are leaning into a

renewed campaign to “take back the revolution.”

500

If webinars, continuing

legal education (CLE) programs, conferences, podcasts, and the like are any

indication, all parties are seeking to adjust to the new landscape—of which

mass arbitration will certainly be a part.

501

That said, it is possible that mass arbitration will eventually be its own

undoing. Whether this is for ill or for good depends on the form that the

undoing takes. On the one hand, mass arbitration could help create an even

bleaker civil justice landscape for large swaths of the American public. This is

possible if the defense coalition manages to (1) prevent the passage of broad

500. See, e.g., supra note 164 and accompanying text (describing efforts by the Chamber of

Commerce to oppose the FAIR Act); supra notes 475-84 and accompanying text (noting

that DoorDash and Ticketmaster were able to change arbitral fora to their advantage).

501. See, e.g., Mitigating Mass Arbitration: Revising Arbitration Clauses and Rethinking Defense

Strategies, S

TRAFFORD, https://perma.cc/FF64-33EN (archived May 19, 2022); CLE

Speaker Series: Arbitration 360—What Companies Need to Know About International,

Domestic and Consumer Mass Arbitration, C

OOLEY, https://perma.cc/93K6-JEG2

(archived Aug. 18, 2022); The New Mass Arbitration: Just Deserts or Just Another Abuse?,

EDERALIST SOC’Y, https://perma.cc/CUP7-HKCN (archived Aug. 26, 2022) (featuring

the Author, Brian Fitzpatrick, and Daniel Fisher); Miami Law Class Action & Complex

Litigation Forum, U

NIV. MIA. SCH. L., https://perma.cc/3UYM-NPJ7 (archived May 19,

2022) (featuring a panel on arbitration comprised of the Author, Judge Roy Altman,

Rachel Furst, Lawrence Silverman, and Tal Lifshitz); Consumer Fin. Monitor, A Deep

Dive into Mass Arbitration: Part II, B

ALLARD SPAHR (Feb. 24, 2022), https://perma.cc/

47PL-6YBG (featuring the Author and Alan Kaplinsky); Program Details: What Does the

Future Hold for Mass Arbitration?, W.

LEGALEDCENTER, https://perma.cc/4JJZ-49HR

(archived May 19, 2021) (featuring a lecture by the Author hosted by Celesq

AttorneysEd Center).

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reform bills like the FAIR Act (rather likely as things stand now

502

); and

(2) convince courts, especially the Supreme Court, to bless new, draconian

arbitration agreements (less likely, but not inconceivable

503

On the other hand, mass arbitration could catalyze much-needed reform.

Mass arbitration has challenged both the arbitration revolution and the class-

action counterrevolution, and in doing so it has helped to make civil justice

work again—especially for the most disadvantaged members of our society.

Indeed, the movement has already started a counter-counterrevolution:

Corporate giants like Amazon have fled arbitration,

504

and others will likely

follow if mass arbitration persists. And unlike the arbitration revolution,

which barely registered outside of academic circles,

505

mass arbitration has

captured significant national attention.

506

Accordingly, public pressure for

reform has never been greater. If mass arbitration continues on its current

path, its greatest trick may not just be to upend the defense coalition’s push

toward arbitration, but to reverse it.

VI. Applications, Expansions, and Implications

Mass arbitration is a transformational phenomenon in civil justice.

Following the arbitration revolution and the class-action counterrevolution,

defendants had two clear options: either litigate a class action in court (quite

undesirable) or use arbitration agreements with class-action waivers to

502. See, e.g., LaSusa, supra note 166.

503. See supra Part IV.C.3.

504. See supra notes 34-35 and accompanying text.

505. In October 2015, the New York Times published an article entitled “Arbitration

Everywhere, Stacking the Deck of Justice.” See Jessica Silver-Greenberg & Robert

Gebeloff, Arbitration Everywhere, Stacking the Deck of Justice, N.Y.

TIMES (Oct. 31, 2015),

https://perma.cc/BS9P-7XWL. By that time, the Supreme Court had already decided

Stolt-Nielsen, Concepcion, and Italian Colors. Myriam Gilles and Jean Sternlight’s

pathbreaking articles, which sounded the alarm about mandatory arbitration

agreements, had been in print for around a decade. See generally Gilles, supra note 47

(describing how class-action waivers in arbitration agreements pose a threat to the

availability of mass relief); Jean R. Sternlight, Creeping Mandatory Arbitration: Is It Just?,

57 S

TAN. L. REV. 1631 (2005) (discussing the proliferation of mandatory arbitration

agreements and arguing that mandatory arbitration is unjust). Even if the public had

wanted to do something about the arbitration revolution at that point—and that is

assuming a single article in the New York Times would have been sufficient to inform

and galvanize them—it was too late.

506. See, e.g., Scott Medintz, How Consumers Are Using Mass Arbitration to Fight Amazon,

Intuit, and Other Corporate Giants, C

ONSUMER REPS. (Aug. 13, 2021), https://perma.cc/

SMT3-KQQB (featuring this Article’s study); Alison Frankel, Postmates Brings Mass

Arbitration to SCOTUS, Sort Of, R

EUTERS (Aug. 2, 2021, 5:02 PM EDT), https://perma.cc/

LNX6-W5UH (same); Armstrong & Tobin, supra note 267; Corkery & Silver-

Greenberg, supra note 34; Randazzo, supra note 35.

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1379

virtually eliminate claims (the obvious choice). With the advent of mass

arbitration, however, the calculus changed: Defendants could now either

litigate a class action in court (quite undesirable) or drown in a sea of

arbitration demands (more undesirable still). Faced with this second set of

choices, it is no wonder that corporate defendants are seeking refuge in the

class-action device. After more than forty years, defendants are on the

defensive.

Even if Mass Arbitration 1.0 is fleeting—indeed, even if mass arbitration

writ large is somehow fleeting

507

—mass arbitration has already taught us a

number of lessons about aggregate dispute resolution and civil justice. This

Part explores three. It first examines the civil justice issues laid bare by mass

arbitration, particularly those issues concerning access to justice and the

resolution of claims on the merits. Next, this Part situates mass arbitration

within the larger universe of aggregate dispute resolution. Far from being

tethered to the world of arbitration, the mass-arbitration model is relevant

across the universe of individual adjudication. This includes areas of dispute

resolution that defendants cannot unilaterally change. The Part concludes by

discussing, in the context of mass arbitration, a central critique of our civil

justice system: that its fundamental commitments have been abandoned

through outsourcing to moneyed corporate interests.

A. Claim Facilitation and Merits-Based Claim Resolution

Mass arbitration reveals profound shortcomings in the aggregate dispute

resolution landscape. To be sure, it is laudable that many mass-arbitration

claimants have recovered close to their actual damages. And the fact that

claimants were able to achieve these outcomes through private procedural

innovation speaks to the value of adversarialism in civil justice.

508

Yet these

507. As of this writing, mass arbitration, while still rare, appears to be growing—and of

growing concern to defendants. See, e.g., supra note 501 (listing numerous CLE

offerings, podcasts, and conferences devoted to the rise of mass arbitration in civil

justice); supra note 250 (discussing Labaton Sucharow’s targeted outreach to potential

mass-arbitration clients); Margaret M. Clark, Mass Arbitration Strains Employers,

SHRM: HR

MAG. (Nov. 22, 2021), https://perma.cc/UYR6-HQZF; Charles Balmain,

Matthew Devine, Sonja Hoffmann & Sheldon Philp, Class and Group Actions Laws and

Regulations: Developments and Trends in Collective Actions 2022,

ICLG.COM (Aug. 11, 2021),

https://perma.cc/H4KV-5R65 (describing mass arbitration as a new development with

which defendants must cope); Alison Frankel, Lieff Cabraser’s Gambit: Contacting

Potential 9,100 Clients Despite Protective Order, R

EUTERS (Jan. 13, 2022, 2:03 PM PST),

https://perma.cc/8XS3-4YZ8 (discussing Lieff Cabraser’s continued outreach efforts in

the potential DirecTV mass arbitration).

508. See generally ROBERT A. KAGAN, ADVERSARIAL LEGALISM: THE AMERICAN WAY OF LAW

(2d ed. 2019) (discussing the virtues of adversarial legalism and describing how it can

empower citizens to challenge unlawful conduct).

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results are also lamentable, at least to the extent they stem from in terrorem

settlement pressure imposed by mass-arbitration fee leveraging.

If we care about poetic justice in aggregate dispute resolution, mass

arbitration fits the bill. If we care about settlement outcomes driven by the

merits of claims, mass arbitration is also acceptable (although somewhat by

happenstance). But if we care about a functional infrastructure designed to

vindicate meritorious but low-value claims, mass arbitration shows that no

such infrastructure exists—at least not judicially.

Mass arbitration is, in large part, a response to the Supreme Court’s

destruction of that infrastructure.

509

The mass-arbitration model operates on

its ability to impose significant in terrorem settlement pressure; without the

class action or other means of aggregate dispute resolution, this pressure is

necessary to access any sort of justice. So far, many mass-arbitration claims

have proved meritorious and been successful. Absent mass arbitration, these

claims may not have received awards anywhere close to actual damages—or

may not have been heard in the first place. In other words, mass arbitration

may well impose in terrorem settlement pressure. But that is because

corporations left mass-arbitration claimants, many of whom are frontline

workers, with no alternative but to upend the contractual provisions that

eliminated their claims.

That individuals with meritorious but low-value claims have so little

access to justice (to say nothing about access to systems capable of ensuring

adequate recovery) is as unfortunate as it is unsurprising. The civil justice

system has been under concerted attack for over forty years. Corporate

interests have waged a methodical and relentless campaign to characterize

small claims as frivolous and eliminate them. Many of the claims in mass

arbitration, though, are not frivolous. They are claims by some of the most

vulnerable members of our society, brought against the corporations that

exploited them secure in the knowledge that there was no real way to fight

back. Enterprising lawyers identified a glitch in the matrix, and mass

arbitration was born.

Properly understood and properly contextualized, mass arbitration does

not create civil justice problems so much as it exposes them.

B. Informal Aggregate Dispute Resolution

Mass arbitration is both a new mode of dispute resolution and a new

method of individualized aggregate claiming. Although the mass-arbitration

509. See supra Part I; see also, e.g., Glover, supra note 15, at 1160-75 (detailing various efforts

to curtail mechanisms of private enforcement); Burbank & Farhang, supra note 15, at

62-64 (“We anticipate that the Court will continue as the institutional leader in the

project to retrench private enforcement in the near future . . . .”).

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model owes its origins to the world of arbitration created by the arbitration

revolution, it is hardly constrained by that world. As such, this Subpart

examines mass arbitration in other contexts.

Commentators have long offered accounts of lawyers, organizers, and

corporations privately aggregating claims to achieve economies of scale.

Samuel Issacharoff and John Fabian Witt, for instance, have noted that

translators historically acted as intermediaries for groups of workers with

claims against their employers.

510

Nora Freeman Engstrom has shown that

some personal-injury firms (“settlement mills”) collect and file automobile

claims in high volume.

511

And on the defense side, Dana Remus and Adam

Zimmerman have detailed how corporations informally aggregate claims in

their own high-volume settlement operations.

512

Each of the above investigations reveals a model of aggregate dispute

resolution distinct from the formal mechanisms for mass claiming (like the

class action or the MDL consolidation). Each also reveals that the traditional

“poles” of litigation—individual on the one hand, formally aggregated on the

other—are somewhat mythical.

513

The world of mass litigation is more of a

spectrum, with various models designed to aggregate claims using a mix of

public and private tools. Mass arbitration is simply a new addition to that

spectrum.

Mass arbitration is at once individualized (it centers around one-on-one

arbitration) and collective (it relies on venture capital, technology, firm

expertise, and mass claiming to enable and resolve disputes). As such, mass

arbitration can be situated alongside the informal modes of aggregation

described above. Although detailed comparisons among these modes are

necessarily the subject of other work,

514

a few important distinctions are

worth noting here. Unlike the informal aggregation process described by

Issacharoff and Witt, mass arbitration involves the formal representation of

claimants by firms. And while mass arbitration involves individual claims

against a single defendant for a common course of conduct, Engstrom’s

“settlement mills” principally deal with individual claims arising out of

510. Issacharoff & Witt, supra note 175, at 1631 (listing “translators in immigrant factory

communities” as a “historical example[] of aggregation”).

511. Nora Freeman Engstrom, Sunlight and Settlement Mills, 86 N.Y.U. L. REV. 805, 816-23

(2011).

512. Remus & Zimmerman, supra note 487, at 136-37.

513. Accord, e.g., Deborah R. Hensler, Revisiting the Monster: New Myths and Realities of Class

Action and Other Large Scale Litigation, 11 D

UKE J. COMPAR. & INT’L L. 179, 181-82, 189-91

(2001).

514. See J. Maria Glover, Informal Aggregation (unpublished manuscript) (on file with

author).

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different events and against different drivers—even if insurers are present as

repeat players.

Situating mass arbitration on the spectrum of informal aggregation

illuminates the model’s importance in the civil justice landscape. One could

imagine a similar model in small-claims court, with claimants’ attorneys

formally out of view but functionally performing the same role as mass-

arbitration attorneys. One could also imagine a similar model for common

disputes before administrative agencies.

515

It is also conceivable that key

elements of the mass-arbitration model could be used for claims that cannot be

certified in a class or consolidated for pretrial proceedings under 28 U.S.C.

§ 1407.

516

And a mass-arbitration–type model (albeit a flipped one) is already

emerging outside of arbitration: Corporate plaintiffs are filing thousands of

small-dollar claims against unrepresented individuals in state courts.

517

To be sure, mass arbitration’s effects on the aggregate dispute resolution

landscape are still unclear.

518

It is unlikely, though, that the pre–arbitration

revolution or the post–Italian Colors status quos will be restored. Instead, the

mass-arbitration model (or some structural analogue) will likely remain a

distinct option for aggregate dispute resolution going forward. In this new

status quo, defendants will not be able to eliminate low-value claims arising

from aggregate harm.

519

They will instead have to resolve at least a subset of

those claims through informal aggregate models—models that will look a lot

like mass arbitration.

C. Mass Arbitration and the Civil Justice System

Mass arbitration is not just a distinct form of dispute resolution; it is a

potentially preferable form of dispute resolution for both consumers and

employees. This is true for at least three reasons. One, mass-arbitration

settlement payouts have tended to be higher than settlement payouts in

515. See Michael Sant’Ambrogio & Adam S. Zimmerman, Inside the Agency Class Action, 126

ALE L.J. 1634, 1658-63 (2017) (noting that very few agencies formally aggregate

claims).

516. See, e.g., J. Maria Glover, Mass Litigation Governance in the Post–Class Action Era: The

Problems and Promise of Non-removable State Actions in Multi-district Litigation, 5 J.

TORT

L. 3, 9 (2012); Zachary D. Clopton & D. Theodore Rave, MDL in the States, 115 NW. U. L.

REV. 1649, 1702-03, 1713 (2021).

517. See Daniel Wilf-Townsend, Assembly-Line Plaintiffs, 135 HARV. L. REV. 1704, 1707-09

(2022).

518. This lack of clarity stems in large part from mass arbitration’s uncertain future. See

supra Part IV.

519. See generally D. Theodore Rave, When Peace Is Not the Goal of a Class Action Settlement, 50

A. L. REV. 475 (2016) (describing how class-action waivers, whether ex ante or ex post,

can leave claimants with no chance to vindicate their substantive rights).

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1383

parallel class actions.

520

Two, mass arbitration is often more efficient. Well-

capitalized arbitral fora have greater resources with which to effectively

resolve claims than their judicial counterparts; what is a Roach Motel in an

MDL consolidation

521

could be a relatively short stay in a mass arbitration.

Three, mass arbitration provides more opportunities for participation and

attorney interaction.

522

(Nothing approaching the level of participation in

one-on-one litigation, of course, but certainly greater than the level of

participation typical in a class action.)

But even if mass arbitration were always preferable, it would not (and

could not) be a panacea for the class-action counterrevolution. In its current

form, there are some claims that mass arbitration simply cannot reach. For

one, a number of meritorious claims will still cost more to litigate than their

individual values. The threshold value for claim marketability is higher in a

mass arbitration than it is in a class action,

523

and that value will tend to

increase as mass arbitration adapts to the defense bar’s counteroffensives. For

another, to the extent that mass arbitration can facilitate claims, it facilitates

those that benefit from aggregation as an economic matter. Claims that stem

from discrimination, sexual harassment, sexual assault, and other civil rights

violations depend on aggregation to obtain company-wide data or class-wide

proof. As I explore in other work,

524

mass arbitration generally cannot help

these claims.

525

Further, that the mass-arbitration model is potentially preferable for

consumers and employees does not mean that mass arbitration is preferable

from a regulatory standpoint. Although mass arbitration can help patch the

holes of a regulatory apparatus damaged by decades of procedural warfare,

520. See supra Part III.C.4.

521. See In re TJX Cos. Retail Sec. Breach Litig., 584 F. Supp. 2d 395, 405 n.16 (D. Mass. 2008)

(borrowing Issacharoff’s comparison of an MDL to a Roach Motel: Cases “check in—

but they don’t check out” (quoting a Roach Motel ad)).

522. See generally, e.g., Robert G. Bone, Procedure, Participation, Rights, 90 B.U. L. REV. 1011

(2010) (discussing the importance of participation in the broader context of procedural

rights).

523. See supra Part III.C.3.

524. See J. Maria Glover, Disaggregated Proof, Dismantled Rights (unpublished manuscript)

(on file with author).

525. This is true because, as a general matter, the whole of the evidence gathered across

individual cases is not greater than the sum of its parts. Consider employment-

discrimination cases, which typically require proof of a pattern or practice of

discrimination. See, e.g., Thiessen v. Gen. Elec. Cap. Corp., 267 F.3d 1095, 1105-06 (10th

Cir. 2001) (distinguishing aggregate “pattern-or-practice” cases from cases “involving

one or more claims of individualized discrimination”). The data generated in each case

is distorted because there is no company-wide view, and limitations on obtaining

company-wide data (such as cost) could mean that no such data is available to any

claimant. It is hard to prove a pattern or practice using only a single perspective.

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mass arbitrations are still smaller than class actions. This size difference (as

measured by the total number of claimants) is likely a feature of the mass-

arbitration model: Mass arbitration’s ability to grow is constrained by the

expense of arbitral proceedings, the necessity of up-front production, the

challenge of filing individual demands, and a host of ethical constraints

regarding representation. As such, mass arbitrations may not hold the same

promise as class actions for achieving deterrence and changing defendant

behavior.

526

And at least to the extent mass arbitration continues to occur in

arbitration, the private, secretive nature of arbitral proceedings means less

public precedent, less publicity, less public outcry, and less pressure on

defendants to abandon harmful practices.

In sum, mass arbitration cannot restore all the claims eliminated by the

arbitration revolution and the class-action counterrevolution. But it can

restore some of those claims, and it can do so to the claimants’ advantage. A

happy ending, at least in part? Not quite. Corporate defendants are in the

claim-elimination business, and to the extent that mass arbitration interferes

with claim elimination, defendants will take their procedural war machine

elsewhere. Amazon may be a harbinger of what is to come.

527

Some might say that mass arbitration is merely the latest and most

consequential offensive in an otherwise moribund theater of procedural

warfare. And they are right, to a degree. But mass arbitration is much more

than that. It is also a phenomenon that sheds a harsh light on the sad state of

American civil justice. Our current system has become, at Congress and the

Supreme Court’s behest, the product of (and the battlefield for) a mutually

destructive private procedural arms race. It is a system that is increasingly

indifferent to systemic injustices faced by minorities, women, the working

poor, and other marginalized groups—injustices created and perpetuated by

that arms race. A system that destroyed its infrastructure for vindicating

meritorious claims, only to criticize the in terrorem settlement pressure that

necessarily arose in the vacuum. A system that refuses to distinguish between

low-value claims that matter to real people and claims that matter only to

attorneys, thereby abrogating its responsibility to hear the former and push

out the latter. A system that shirks its constitutional countermajoritarian

commitments

528

and outsources the allocation of justice to the moneyed

corporate majority.

526. See Brian T. Fitzpatrick, Do Class Actions Deter Wrongdoing?, in THE CLASS ACTION

EFFECT 181, 194-95 (Catherine Piché ed., 2018) (“[T]he theory of general deterrence is

sound. We still have every reason to think that lawsuits—including class action

lawsuits—deter corporate misconduct.”).

527. See supra note 35 and accompanying text.

528. See, e.g., Martin H. Redish & Matthew Heins, Premodern Constitutionalism, 57 WM. &

MARY L. REV. 1825, 1834-35 (2016).

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What can be done? Discussions of procedural reform often incorporate

both public and private procedural ordering,

529

but that combination offers

little purchase here. For more than forty years, public procedural ordering

produced nothing that could meaningfully counterbalance the arbitration

revolution or the class-action counterrevolution. Instead, it was the private

response to those movements that harnessed the economic potential in

defendants’ arbitration agreements. That response stopped the arbitration

revolution in its tracks, and it seems to be our best hope going forward—at

least until the wind changes.

But civil justice—and almost coterminously, social justice—that is so

deeply dependent on shifts in the political and economic winds is likely to be

little justice at all.

Conclusion

This Article is the first to study mass arbitration, which has upended the

defense bar’s forty-year campaign to eliminate claims through forced

arbitration and class-action waivers. Whatever mass arbitration’s future, that

is quite a lot for a day’s work. But mass arbitration is more than a response to

the arbitration revolution and the class-action counterrevolution. Mass

arbitration has vital implications for broad questions about aggregate dispute

resolution, the regulatory apparatus for low-value claims in the United States,

and for civil justice—its conceptions, its ideals, and its failures. And our own.

529. See, e.g., Dodge, supra note 45, at 724-31; Owen M. Fiss, Comment, Against Settlement, 93

ALE L.J. 1073, 1073-78 (1984) (criticizing both public and private efforts to encourage

settlement); Resnik, supra note 75, at 2806-17; Remus & Zimmerman, supra note 487, at

134-35 (“Corporate settlement mills thus raise the question of how far policymakers

should be permitted to go to privatize our public . . . process of adjudication.”);

Engstrom, supra note 511, at 829-33. Some commentators have argued that public

procedural ordering is at least more democratically legitimate. See, e.g., Glover, supra

note 75, at 3076-83; Richard A. Nagareda, The Litigation–Arbitration Dichotomy Meets the

Class Action, 86 N

OTRE DAME L. REV. 1069, 1077 (2011) (“The central argument against

class waivers is they purport to do something that public legislation may do but that

private contracts may not . . . .”); see also Samuel Issacharoff & Erin F. Delaney, Credit

Card Accountability, 73 U.

CHI. L. REV. 157, 172-75 (2006); Nagareda, supra note 132, at

1902; David Horton, The Arbitration Rules: Procedural Rulemaking by Arbitration

Providers, 105 M

INN. L. REV. 619, 646 (2020); David L. Noll & Luke Norris, Federal Rules

of Private Enforcement 1 (unpublished manuscript) (on file with author) (deriving its

title from Glover, supra note 132). One can debate whether and to what extent public

procedural ordering better aligns with democratic values. But even if public procedural

ordering offers greater democratic legitimacy than private procedural ordering, it is

unclear what functional good that legitimacy has done for the scores of claimants

whose rights were erased by the defense coalition.

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1386

Appendix

Table 2 summarizes the mass arbitrations included in this Article’s study.

The study took place from January 2019 to December 2021; the data below is

from that time period unless otherwise noted. For purposes of Table 2, I

estimated up-front fee obligations based on the best available data (estimate

disclosures in public filings, agreement terms, fee schedules for arbitral fora,

and so on).

530

Table 2

Mass Arbitrations

Table 2 begins on the following page.

530. It is worth noting that arbitrators have some discretion to adjust fee assessments.

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1387

Prior

Class

Action?

Yes

Arbitral

Forum

AAA

JAMS

Up-front

Fees:

Plaintiffs

$15 million

~$200,000 to

~$4 million

~$3,021,400

~$60,000 to

~$1.125

million

Up-front

Fees:

Defendants

~$127 million

~$1.5 million

to ~$30

million

~$7.5 million

(used to be

$56 million)

~$260,000 to

~$5 million

Damages

Available

Statutory

damages of $100

to $750 per

violation

All legal and

equitable

remedies

allowed by law

Actual,

compensatory,

and punitive

damages,

attorney’s fees

Restitution

(back pay),

liquidated

damages, pre-

judgement

interest,

attorney’s fees

Demands

Filed,

Inventory

~75,000 filed

~1,000 filed,

~20,000

inventory

~15,000 filed

~150 filed,

~3,000

inventory

Defense

Counsel

Fenwick &

West

Cooley

Orrick

Messner

Reeves

Lead

Plaintiffs’

Counsel

Keller

Lenkner

Keller

Lenkner

Z Law

Kent

Williams,

Williams

Law Group

Underlying

Law

California

Invasion of

Privacy Act

Various

consumer-

fraud statutes

California

Civil Code

section

1798.80 et seq.

Fair Labor

Standards

Act, Colorado

labor law

Principal

Claims

Privacy

action based

on Amazon

Alexa devices

secretly

recording

minors

Consumer

action based

on fraudulent

CenturyLink

billing

practices

Breach of

consumer

data

Wage-theft

action based

on unpaid

overtime

Mass

Arbitration

Amazon

CenturyLink

Chegg

Chipotle

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1388

Prior

Class

Action?

Yes

Arbitral

Forum

AAA (though

Family Dollar

asserted that

some

demands

were for

JAMS)

Unknown

AAA, CPR

AAA

Up-front

Fees:

Plaintiffs

Not enough

data to

provide an

estimate

$250 per

claim

~$1.5 million

~$200,000 to

~$3 million

Up-front

Fees:

Defendants

~$2.5 million

Unknown

~$12 million

~$300,000 to

~$5 million

Damages

Available

General

damages, pre-

and post-

judgement

interest,

attorney’s fees,

injunctive relief

Actual,

compensatory,

punitive, and

statutory

damages, pre-

judgement

interest,

attorney’s fees

General

damages, pre-

and post-

judgement

interest,

attorney’s fees,

injunctive relief

Actual and

punitive

damages,

injunctive relief,

attorney’s fees

Demands

Filed,

Inventory

~2,000 filed

Unknown

~6,000 filed

~1,000 filed,

~17,000

inventory

Defense

Counsel

Hunton

Andrews

Kurth

Gibson

Dunn

Gibson

Dunn

ZwillGen

Lead

Plaintiffs’

Counsel

Keller

Lenkner

Z Law

Keller

Lenkner

Keller

Lenkner

Underlying

Law

Fair Labor

Standards

Act, state

wage-and-

hour laws

New York

General

Business Law

sections 349

to 350, state

consumer-

protection

statutes

Fair Labor

Standards

Act,

California

labor law

New York

General

Business Law

sections 349

to 350

Principal

Claims

Wage theft

Consumer-

fraud action

based on

skimming

tips

Wage-and-

hour action

based on

classification

of employees

independent

contractors

Consumer-

fraud action,

fraudulent

advertising

Mass

Arbitration

Dollar Tree

(Family Dollar)

DoorDash

(consumer)

DoorDash

(employment)

DraftKings,

FanDuel

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1389

Prior

Class

Action?

Yes

No, but

class

action

followed

demands

Arbitral

Forum

AAA

JAMS

Up-front

Fees:

Plaintiffs

~$8 million

~$1 million

Unknown

Up-front

Fees:

Defendants

Up to ~$36

million

~$9 million

~$2.1 million

Damages

Available

Nominal, actual,

compensatory,

consequential,

punitive, and

statutory

damages, pre-

and post-

judgement

interest,

attorney’s fees

Declaratory

judgement,

equitable relief,

restitution (back

pay), statutory,

general, and

punitive

damages,

attorney’s fees

Actual and

statutory

damages,

restitution,

injunctive relief,

attorney’s fees,

pre- and post-

judgement

interest

Demands

Filed,

Inventory

~16,000 filed

~3,500 filed

~2,700 filed

Defense

Counsel

Wilmer

Cutler

Pickering

Hale and

Dorr

Keker, Van

Nest &

Peters

Hueston

Hennigan,

Beys Liston

& Mobargha

Lead

Plaintiffs’

Counsel

Keller

Lenkner

Keller

Lenkner

DiCello

Levitt, Keller

Lenkner

Underlying

Law

California,

New York,

and

Pennsylvania

consumer-

protection

laws

Fair Labor

Standards

Act,

California

labor law

New York

and Michigan

consumer-

protection

laws

(Michigan

plaintiffs

dropped out

July 2021)

Principal

Claims

Consumer-

fraud action

based on

advertising

that steered

consumers to

paid tax

services

Wage-and-

hour action

based on

classification

of employees

independent

contractors

False

advertising

Mass

Arbitration

Intuit

(TurboTax)

Lyft

Peloton

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1390

Prior

Class

Action?

Yes

Arbitral

Forum

AAA

JAMS

Up-front

Fees:

Plaintiffs

~$100,000

Unknown

~$5 million

to ~$24

million

Up-front

Fees:

Defendants

Up to ~$20

million

~$91 million

~$18 million

to ~$90

million

Damages

Available

General

damages, pre-

and post-

judgement

interest,

attorney’s fees,

injunctive relief

Compensatory,

punitive, and

statutory

damages (of

$4,000 per

violation)

Equitable relief,

restitution (back

pay), statutory,

general, and

punitive

damages,

attorney’s fees

Demands

Filed,

Inventory

~15,000 filed

~31,000 filed

~12,500 filed,

~60,000

inventory

Defense

Counsel

Gibson

Dunn

Kaplan

Hecker &

Fink

Gibson

Dunn

Lead

Plaintiffs’

Counsel

Keller

Lenkner

Consovoy

McCarthy

Larson

Underlying

Law

Fair Labor

Standards

Act,

California

labor law

42 U.S.C.

§ 1981 et seq.,

Unruh Civil

Rights Act

Fair Labor

Standards

Act,

California

and other

state labor

laws

Principal

Claims

Wage-and-

hour action

based on

classification

of employees

independent

contractors

Challenge to

Uber’s waiver

of certain

delivery fees

in 2020

Wage-and-

hour action

based on

classification

of employees

independent

contractors

Mass

Arbitration

Postmates

Uber (race)

(data updated

April 2022)

Uber

(employment)

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1391

Prior

Class

Action?

Prior Small-Scale Mass Arbitrations

Yes

Potential Mass Arbitrations

N/A

Yes

Arbitral

Forum

AAA or

JAMS,

depending on

agreement

JAMS

N/A

AAA

Up-front

Fees:

Plaintiffs

Unknown

Up-front

Fees:

Defendants

$396,000

~$870,000

Unknown

Damages

Available

General

damages, pre-

and post-

judgement

interest,

attorney’s fees,

injunctive relief

Unknown

Liquidated

damages (unpaid

compensation),

attorney’s fees

Statutory

damages of $500

per violation,

trebled if

knowing

violation

Demands

Filed,

Inventory

~180

(Aguilera) and

~50 (Aldrich)

filed

150 filed

~70,000

inventory

At least

~9,100

inventory

Defense

Counsel

Seyfarth

Shaw

Unknown

Tucker Ellis

Mayer

Brown

Lead

Plaintiffs’

Counsel

Nichols

Kaster

Nichols

Kaster

Lichten &

Liss-Riordan

Lieff

Cabraser

Underlying

Law

Fair Labor

Standards

Act, state

wage-and-

hour laws

Fair Labor

Standards

Act,

California

labor law

Fair Labor

Standards Act

Telephone

Consumer

Protection

Act, Satellite

Television

Extension

and Localism

Act

Principal

Claims

Wage theft

Wage theft,

overtime,

employee

classification

Wage theft

Improper

disclosure of

consumer

information

Mass

Arbitration

Prospect

Mortgage

Undisclosed

Arise (pending

release of class

list)

DirecTV

(pending

release of class

list)

Mass Arbitration

74 STAN. L. REV. 1283 (2022)

1392

Prior

Class

Action?

Yes

Claim-Marketability Failures

Yes

Arbitral

Forum

N/A

AAA

Up-front

Fees:

Plaintiffs

Unknown

N/A

Up-front

Fees:

Defendants

Unknown

N/A

Damages

Available

Treble and

punitive

damages, pre-

and post-

judgement

interest,

injunctive relief,

attorney’s fees

Disgorgement,

restitution for

cost of purchase,

compensatory,

punitive, and

statutory

damages,

injunctive relief,

notification as

to defect,

attorney’s fees

Demands

Filed,

Inventory

Unknown

N/A

Defense

Counsel

Latham &

Watkins

Morrison &

Foerster

Lead

Plaintiffs’

Counsel

Quinn

Emanuel,

Keller

Lenkner

Lieff

Cabraser

Underlying

Law

Sherman Act

California

Consumer

Legal

Remedies Act

Principal

Claims

Consumer

antitrust

claims

Consumer-

fraud action

based on

incorrect user

heart-rate

calculations

Mass

Arbitration

Ticketmaster,

Live Nation

(pending

release of class

list)

Fitbit