Originally from: AAA Handbook on Arbitration Practice

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In recent years, the U.S. Supreme Court and appellate courts have issued a series of opinions addressing the permissible scope of class action arbitrations.  On March 25, 2008, in the most recent of its string of significant arbitration decisions in the past 15 or so years interpreting the Federal Arbitration Act (FAA),  the U.S. Supreme Court handed down Hall Street Associates LLC v. Mattel, Inc.  In Hall Street, the Court held that grounds on which a federal court could review and vacate an arbitration award were limited to those set forth in the FAA. The Court left open the possibility that an arbitration award sought to be enforced outside of the FAA could be reviewed on other grounds, but did not provide elaboration of this suggestion. 

Hall Street also left unresolved certain open issues at the intersection of predispute arbitration agreements and the availability of class actions, thereby confronting the parties with difficult choices and legal uncertainty when it comes to drafting arbitration agreements. As discussed below, these issues are currently before the Supreme Court in another case, and various appellate courts are weighing in on the enforceability of class action waivers in arbitration agreements. At the same time, some forces in Congress-galvanized by a new administration which may view arbitration more skeptically than did its predecessors - are proposing changes to the FAA which would considerably limit parties' abilities to enter into pre-dispute arbitration agreements. All in all, arbitration in general, and particularly as it applies to class action claims, is in a state of flux.