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Third Circuit: A Class Action Waiver Presents an Issue of Arbitrability to be Decided by the Court, Not by an Arbitrator

07/20/2010

The United States Court of Appeals for the Third Circuit held en banc in Puleo v. Chase Bank USA, N.A. that the validity of a class action waiver in an arbitration agreement presented an issue of arbitrability, and therefore, must be decided by the court and not by an arbitrator. In doing so, the Third Circuit (over a four-judge dissent) joined the First, Second, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits in holding that a plaintiff’s unconscionability challenge to a class action waiver in an arbitration agreement presents a threshold challenge to
arbitrability, which is a question for the court.

This Alert examines the Puleo decision.