Originally from:

Journal of American Arbitration (JAA) - Vol. 5, No. 2

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ARTICLES

Arbitration Clauses in the Face of Class
Actions and the Class Action Fairness Act:
Pennsylvania’s Approach to Class Action
Preclusion Clauses and Class Action
Arbitrations Is Right on Target and Has Likely
Been Limited by the Class Action Fairness Act
By Ryan Boland

I. INTRODUCTION
Pennsylvania stands at a podium with very few supporters when
voicing its position on the enforceability of class action preclusion
clauses and the existence of class action arbitration. First, Pennsylvania
is one of two states that expressly allow class actions to proceed through
a hybrid process of class-wide arbitration, combining the benefit of the
accountability of judges with the efficiency of arbitration. Second, in the
face of Green Tree Financial Corp. v. Bazzle, Pennsylvania has taken the
approach that consumers should be given the opportunity in limited
instances to void arbitration clauses that preclude the use of class
actions.1
While business does not like the idea of consumers being freed from
contracts including class action preclusion clauses, Pennsylvania’s
limited approach to invalidating class action preclusion clauses should
neither open up the flood gates of litigation nor have a great affect on
business’s bottom line. Instead, Pennsylvania’s approach should force
companies to modify new and existing contracts to provide for class
action arbitrations or traditional judicial class action for relatively small
claims, which will eliminate the need for consumers to sue these