26 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 27 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C settling under the weight of massive collective filing fees. For instance, in 2019 DoorDash was required to pay a filing fee of $1,900 per claim. With 5,010 claimants, DoorDash faced nearly $10 million in fees solely to initiate arbitration. See Abernathy v. DoorDash, Inc., 438. F. Supp. 3d 1062, 1064-66 (N.D. Cal. 2020). Mass arbitrations, however, lead to risks of fraud, as plaintiffs firms often do not – and cannot, given the large numbers – do much vetting of their claimants. Recently, mass arbitrations have revealed that many of the claims filed may not only be defective from a legal perspective, they may also be defective from a factual perspective. To illustrate, Samsung asserted that a plaintiffs’ firm failed to properly investigate its clients’ alleged claims that constituted 50,000 demands for arbitration. Samsung elaborated that the list of claimants in the mass arbitration included individuals who, among other things, were deceased, provided obviously fictitious personal information, were never a Samsung customer, or had filed duplicative demands. See Respondents’ Opposition to Petitioners’ Motion to Compel Arbitration at 14, Wallrich v. Samsung Elecs. Am. Inc., No. 1:22-cv5506, 2023 WL 5935024 (N.D. Ill. Sept. 12 2023) (ECF No. 27). Accordingly, many of the tens of thousands of claimants in a mass arbitration may not be proper claimants at all. In the absence of favorable court rulings that permit defendants to avoid mass arbitration filing fees, corporations have begun redrafting their arbitration provisions. This, however, can be a tricky process, as unconscionable arbitration agreements may be deemed unenforceable under common law. Yet, despite this challenge, several companies have already redrafted their arbitration agreements in a way that seeks to avoid the costs of mass arbitration while not running afoul of existing law. Such changes include shifting fees to claimants for frivolous claims, changing the arbitral forum, and inserting “batching” provisions to resolve legally and factually related demands in one proceeding. Additionally, the American Arbitration Association’s (“AAA”) amended Mass Arbitration Supplementary Rules, effective as of January 15, 2024, may also provide defendants with a means of avoiding exorbitant fees from questionable claims. Under the AAA, corporations will only be responsible for “Per Case Fees” if the cases proceed beyond the initiation stage, which requires a flat fee from the consumers and corporation. Thus, in the coming years, corporations would be prudent to review the AAA’s amended rules and revisit their arbitration agreements to avoid the risk of mass arbitration and the substantial expenses that come along with it. Increasing Scrutiny of Class Action Settlements Rule 23 of the Federal Rules of Civil Procedure provides a process not only for certification of a class, but also for settlement of class action claims. This In the absence of favorable court rulings that permit defendants to avoid mass arbitration filing fees, corporations have begun redrafting their arbitration provisions. This, however, can be a tricky process, as unconscionable arbitration agreements may be deemed unenforceable under common law. C A CROSS-PRACTICE FOCUS Class Actions
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