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Washington State Joins Growing List of Jurisdictions Invalidating Class Action Waivers

Enforcement of Class Action Waiver in Cingular’s Mandatory Arbitration Clause Reversed by Washington Supreme Court and Class Action Reinstated because Class Action Waiver was Unconscionable under the Circumstances

A Seattle newspaper reports that the Washington Supreme Court has held that Cingular Wireless cannot enforce a class action waiver as part of an apparently mandatory arbitration clause. As prior articles reveal, class action waivers are frequently part of company-drafted mandatory arbitration provisions. According to the newspaper, Justice Tom Chambers, writing for the Court, held that the class action waiver was “unconscionable” because “it effectively denies large numbers of consumers the protection of Washington’s Consumer Protection Act.” The decision springs from a trial court order that granted a defense motion to dismiss a class action complaint and to compel arbitration based on the class action waiver in a mandatory arbitration clause. In reversing, the Supreme Court opined that a class action “is often the only meaningful type of redress for small but widespread injuries” and concluded that customers were unlikely otherwise to pursue Cingular for the small amount at issue, either in small claims court or in arbitration. Accordingly, the Supreme Court invalidated the class action waiver and reversed the trial court order dismissing the class action complaint.