Multinationals and the Enforceability of Class Action Waivers in Contracts

Posted on April 22, 2009 by Kirk Hartley

As class action statutes proliferate around the world, a key issue for corporations is whether they can block class actions through contract terms. The April 6, 2009 National Law Journal includes a good summary article by plaintiff's lawyer Linda Mullenix regarding the enforceability of class action waivers. She reviews specifically the recent decisions in Homa v. American Express, 2009 WL 440912 (3rd Cir. Feb. 24, 2009), and In re American Express Merchants' Litigation, 554 F.3d 300 (2nd Cir 2009). The Merchants' decision is especially interesting because of the court confronting and rejecting an attempt to apply the law of one state (Utah) remote to the transactions. Utah law apparently was chosen by Amex because of a state statute upholding the validity of class action waivers. The court declined to let Utah law control.

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