On May 19, Virginia Governor Abigail Spanberger (D) indicated that she intends to veto SB 229, a pending bill which would have created a Virginia state court class action mechanism and would have modified the Virginia Consumer Protection Act (VCPA) in critical ways. Governor Spanberger initially noted that she “approve[d] the general purpose of this bill,” but returned it to the legislature with proposed amendments.
On April 8, Virginia Governor Abigail Spanberger signed SB 227, the Arbitration Fairness Act, into law. The Act not only regulates how high-volume arbitration providers select and oversee arbitrators, but also reshapes the rules for challenging an arbitration award after it has been issued. Designed to make consumer and employment arbitrations more transparent and balanced when administered by high‑volume arbitration service providers, SB 227 will take effect on July 1, 2026, and will apply to all arbitration agreements entered into on or after that date.
In a decision of first impression, the Supreme Court of Virginia in Garofalo v. Di Vincenzo, defined what “evident partiality” means under the Virginia Uniform Arbitration Act (VUAA). The court held that a party seeking to vacate an arbitration award must show that a reasonable person, knowing all relevant facts, would conclude the arbitrator’s conduct signifies obvious bias against that party. Applying this standard, the court affirmed confirmation of a FINRA arbitration award and declined to vacate based on an arbitrator’s undisclosed, attenuated prior connections to one side.
Last week, the U.S. District Court for the Northern District of California denied Empower Finance’s motion to compel arbitration in a class action lawsuit concerning its earned wage access (EWA) product, Cash Advance. In Vickery v. Empower Finance, Inc., the court found that Empower’s Cash Advance product was “credit” under the Military Lending Act (MLA) making Empower’s arbitration agreement unenforceable under the MLA, which prohibits arbitration agreements for consumer credit extended to active-duty service members and their dependents.
In a recent decision by the U.S. Court of Appeals for the Ninth Circuit, the court reversed a district court’s ruling and compelled arbitration in the case of Massel v. Successfulmatch.com dba Millionaire Match. The appellate court concluded that the plaintiff consumer received reasonably conspicuous notice of the Service Agreement (containing the arbitration clause), to which the plaintiff assented by checking the box required for account creation and continued use of the website.
California Senate Bill 940 (SB 940), enacted in late 2024, introduces several key changes to arbitrations involving “consumer contracts,” which is defined as a contract prepared by a seller and signed by a consumer for the sale or lease of goods or services or for the extension of credit purchased or used primarily for personal, family, or household purposes. Below, we explore the major provisions of SB 940 and their implications.
The American Arbitration Association (AAA) has announced revisions to its Consumer Arbitration Rules effective May 1, 2025. The revised rules can be found here and the AAA’s announcement of the rules here. Prior to amending the rules, AAA requested public comments on its proposed changes, soliciting ways to improve the rules while ensuring fairness to all participants in the arbitration process. Although not every rule was revised, there are some significant changes.
Mass arbitration continues to be a significant and evolving issue in the legal landscape, particularly for consumer, healthcare, and employment disputes. The American Arbitration Association (AAA) recently released data from 2024 that provides valuable insights into the trends and outcomes of mass arbitrations.
On April 1, the American Arbitration Association (AAA) announced the launch of its new Consumer Mediation Procedures and Fee Schedule. According to the announcement, updates aim to simplify and make dispute resolution more accessible for consumers, particularly those who are self-represented and may be unfamiliar with the mediation process. Prior to the adopting the procedures, the AAA did not have any processes in place for explaining the benefits of mediation or disclosing the fees associated with using a AAA mediator.
On March 11, the U.S. Court of Appeals for the Fourth Circuit affirmed the district court’s denial of a motion to compel arbitration in two class-action lawsuits. The decision potentially has far-reaching implications for the enforceability of arbitration clauses in consumer contracts, particularly those involving unilateral modification provisions.