Supreme Court Holds that Agreements with Arbitration Clauses Can Properly Waive Class Action Rights

On Wednesday, April 27, 2011, the Supreme Court issued a 5-4 decision in AT&T Mobility v. Concepcion, ruling that the Federal Arbitration Act ("FAA") protects the rights of companies to require arbitration and to preclude individuals from pursuing such arbitration on a classwide basis, even in consumer contracts.  That decision, authored by Justice Scalia, will likely reduce the prevalence of classwide arbitrations, and makes arbitration clauses more attractive to companies seeking to protect themselves against consumer or other types of class actions.