In what we are certain is a reaction to a flurry of multiple individual arbitrations that relate to the same event, the American Arbitration Association (“AAA”) has created Supplementary Rules for Multiple Case Filings (“Supplementary Rules”) effective August 1.
We have reported several times on cases holding that companies such as Amazon and Postmates have been compelled to arbitrate multiple individual arbitrations with consumers or workers. For example, recall that we reported on district court cases resulting in Postmates being ordered to participate and pay fees in over 10,000 individual AAA arbitrations involving the same issue — whether Postmates improperly classified workers as independent contractors, rather than employees. Postmates had sought to enjoin the arbitrations (and its obligation to pay massive administrative fees), contending that the cases amounted essentially to a de facto class arbitration which was prohibited by a class action waiver in the arbitration agreement. Postmates then appealed two of these cases to the Eleventh and Ninth Circuits. In an April 8 article, Postmates, Couriers Agree To End Mass Arbitration Appeals, Law360 reported: “Postmates has agreed to drop its attempts to appeal rulings in two cases that compelled the company to arbitrate with thousands of couriers who claimed misclassification as independent contractors, asking the Seventh Circuit and Ninth Circuit to dismiss each of the appeals. In two stipulated motions on Wednesday, Postmates did not specify why it was requesting the dismissals but indicated that the on-demand delivery company had come to an agreement with the couriers and would no longer fight the district court decisions to compel arbitration. The couriers signed off on the motions.”
New AAA Rules
The AAA created the Supplementary Rules: “to streamline the administration of large volume filings involving the same party, parties, and party representative(s), or related party, parties and party representative(s) for disputes where the Employment/Workplace Fee Schedule or the Consumer Fee Schedule apply.” The Supplementary Rules: “are intended to provide parties and their representatives with an efficient and economical path toward the resolution of multiple individual disputes.” The Rules also encourage the participants to agree to: “additional processes that make the resolution of Multiple Case Filings more efficient,” such as (ed: repeated essentially verbatim):
- A Scheduling Order setting forth deadlines across multiple cases, including those for submission of documents and witness lists, completion of discovery, and filing of motions.
- An agreement to appoint a special master to oversee procedural issues common to the cases, such as discovery, choice of law, and statute of limitations.
- An agreement that cases be heard on the documents, rather than by in-person, telephone, or videoconference hearings.
- An agreement to assign multiple cases to a single arbitrator, making the scheduling of conferences and hearings more efficient. Each case will still be heard and decided individually by the arbitrator.
- An agreement on the form of award.
- An agreement limiting briefs, motions, and discovery requests.
- An agreement allowing testimony via affidavit or recorded deposition, rather than requiring live witness testimony.
Applicability
The Supplementary Rules have ten sections, and give the AAA discretion on whether to apply them. Like other supplementary procedures, they overlay existing rules but govern if there are conflicts. “Multiple Case Filings” are defined as: “twenty-five or more similar Demands for Arbitration (Demand(s)) filed against or on behalf of the same party or related parties … where representation of the parties is consistent or coordinated across the cases.” The Supplementary Rules apply: “whether or not such cases are filed simultaneously.” Rule MC-10 provides that a special, tiered reduced rate “Multiple Case Filings Administrative Fee Schedule” applies in these cases. See for example the employment fee schedule starting on page three.
(ed: We reported in SAA 2021-22 (Jun. 10) that Amazon had dropped its customer predispute arbitration agreement and replaced it in the Conditions of Use as of May 3 with this dispute resolution language: “Any dispute or claim relating in any way to your use of any Amazon Service will be adjudicated in the state or Federal courts in King County, Washington, and you consent to exclusive jurisdiction and venue in these courts. We each waive any right to a jury trial.”)
This post first appeared on the Securities Arbitration Alert blog. The blog’s editor-in-chief is George H. Friedman, Chairman of the Board of Directors for Arbitartion Resolution Services, Inc.
