In 2011, the U.S. Supreme Court rendered a historic and sweeping pro-arbitration decision in AT&T Mobility v. Concepcion, holding that state-law contract defenses targeting arbitration agreements are in conflict with the Federal Arbitration Act. Although governing case law pre-Concepcion already trended in that direction, the Supreme Court’s decision definitively established that consumer arbitration agreements — including those with a waiver of the right to pursue class actions — are valid and enforceable.
A subsequent Supreme Court case, American Express v. Italian Colors, further held that courts may not invalidate arbitration agreements simply because the cost of individually arbitrating a federal statutory claim may exceed the plaintiff’s potential recovery.
