Passage of Nevada Assembly Bill 3 Raises Arbitration Limits to $100,000 in Civil Cases
Nevada has been the leader in alternative dispute resolution for many years, and arbitration has been a highly effective means of resolving civil cases without having to go through long court trials. However, past arbitration limits in Nevada had been considered restrictive, particularly where high-value claims were concerned.
Assembly Bill 3 (AB3) was overwhelmingly approved by both the Assembly and Senate on June 3rd and signed into law during the 2025 legislative session. It increases the arbitration cap to over $100,000 in civil cases, making arbitration more accessible and applicable to a broader range of claims.
Important Changes to AB3
Increased Limit of Arbitration – The most significant and first change that AB3 created is the increase in the limit of arbitration for civil cases. Under previous law, arbitration claims were limited to $50,000. The passage of AB3 doubles that to $100,000, allowing parties an increased incentive to choose arbitration as a means of resolving a dispute.
Applicable Areas and Access – The new arbitration limit of $100,000 covers the majority of civil matters, including personal injury, property damage, breach of contract, and consumer protection cases. AB3 makes arbitration more accessible to Nevada citizens where the amount is over $50,000 but below the new $100,000 limit.
Voluntary Arbitration – AB3 makes clear that arbitration is voluntary for both parties. Arbitration is only mandatory if agreed to in the contract or by mutual consent after the dispute has arisen.
Streamlined Process – With the higher arbitration threshold, the bill streamlines the arbitration process for these types of cases. This means shorter hearing times, simpler rules of procedure, and less formal discovery, which reduces the court and party workload.
Benefits of AB3
Faster, Cheaper Resolution – Raising the arbitration threshold means more people and companies can resolve their disputes outside the clogged, expensive court system. Arbitration can be resolved in months, at lower legal costs, so it’s a good option for bigger cases.
Relief to Jammed Courts – The higher the arbitration ceiling, the more cases will be resolved by arbitration instead of traditional lawsuits. This frees up Nevada courts, allowing judges to focus on complex cases while providing faster settlements on small claims.
Consumer and Business Flexibility – Businesses and consumers benefit from the potential to resolve disputes in a less formalized and costly way. This produces more business deals and a safer and steadier environment for consumer protection claims.
Long-Term Impact on Nevada’s Judicial System – More arbitration in this fashion constructs a more efficient judiciary in Nevada, encouraging the development of alternative solutions for conflict resolution and placing the state at the forefront of effective and affordable legal proceedings.
Modernization and Inflation Adjustment – The prior cap of $50,000 hadn’t been updated in almost two decades. With rising costs in medical fees, litigation costs, and overall economic factors, this cap had become outdated. This led legislators to view the increase as a necessary modernization, not a radical overhaul.
Additional Protections Addressing Opponent Concerns – While concerns like potential bias and cost to low-income parties were raised, the courts now have safeguards in place to address these concerns, including:
Random or agreed arbitrator selection
Restricted discovery and hearing time to reduce cost
Possibility of short trial if either party rejects the arbitration outcome
These features make the system more transparent and fair than some private models of arbitration that have been criticized in consumer or employment disputes.
What’s Ahead: The Future of Arbitration in Nevada
As Nevada’s judiciary gets with the times, AB3 was a big step towards the dispute resolution system in the state becoming more modern. Raising arbitration caps, AB3 opens up more ways to resolve civil disputes cheaper and faster. It also reflects the fine line between access to justice, fairness, and transparency in the process.
AB3 reduces the workload for Nevada courts and brings arbitration to more people, but we’ll have to see how it plays out and how it impacts the court system and consumers. As it evolves, arbitration has to be fair, reasonable, and efficient for all parties.
As Nevada continues to be a leader in dispute resolution, parties and companies will be faced with keeping up with developments in arbitration statutes. If you’ve been involved in a car accident, having a knowledgeable Las Vegas car accident lawyer who understands the ins and outs of arbitration can help you successfully navigate these changes.
Endnotes:
Nevada Legislature. Assembly Bill 3 – 83rd Session (2025). Retrieved from: leg.state.nv.us
Nevada Supreme Court. “The State of Arbitration in Nevada.” Accessed 2024.
American Arbitration Association. “Arbitration as an Alternative to Litigation.” 2023.
Nevada Bar Association. “The Future of Alternative Dispute Resolution in Nevada.” 2023.
National Center for State Courts. “Case Management and Alternative Dispute Resolution.” 2023.
No Surprises Here! Connecticut District Court Confirms IDR Awards Are Enforceable Under the NSA, Deepening Judicial Divide Over Award Enforcement Mechanisms
The U.S. District Court for the District of Connecticut has become the latest court to weigh in on whether Independent Dispute Resolution (“IDR”) awards issued under the No Surprises Act (“NSA”) are enforceable. In a recent decision, the District Court has held that providers may sue to enforce arbitration awards issued in their favor under the NSA, rejecting the argument that the NSA contains no private right of action to enforce such awards. The decision comes amid an ongoing split among federal district courts on this issue, further amplifying uncertainty around the NSA’s implementation—and raising the stakes for insurers, providers, and policymakers alike.
The NSA’s Arbitration Process and the Awards at Issue
Passed in 2020, the NSA protects patients from so‑called “surprise” out‑of‑network medical bills. These bills often arise in emergency situations or when a patient unknowingly receives care from an out‑of‑network provider at an in‑network facility.
When the NSA applies, it caps patient cost‑sharing at in‑network levels and also prohibits out‑of‑network providers from balance billing to collect the remainder of their billed charges. If a provider seeks additional reimbursement for services rendered, the NSA permits the provider to engage in a two‑step dispute resolution process: (1) a 30‑day open negotiation period between the provider and payer, and if negotiation fails, (2) a “baseball‑style” arbitration conducted by a certified Independent Dispute Resolution Entity (“IDRE”). The IDRE’s role is to choose between the provider’s and the payer’s offer, considering multiple statutory factors, including the Qualifying Payment Amount (“QPA”). An IDRE decision is binding upon the parties and must be paid within 30 days. The NSA limits judicial review of IDR awards to narrow circumstances outlined in the Federal Arbitration Act (“FAA”).
However, the NSA does not specify if IDR awards can be enforced by a Court if the payor fails to pay the awarded amount, an omission that led directly to the current litigation. In this groundbreaking case, the plaintiffs—Guardian Flight LLC and several affiliated air ambulance providers—rendered out‑of‑network emergency transport services to patients covered by health plans administered and/or insured by Aetna and Cigna. After receiving unreasonably low initial payments, service providers initiated the NSA’s IDR process and prevailed. Despite the binding nature of the awards, however, both Aetna and Cigna failed to make timely payments or, in many cases, made no payments at all on the NSA awards, leading Guardian Flight and the other air ambulance companies to file suit to enforce the awards.
In their complaint, the service providers alleged multiple causes of action. First, they sought to enforce the unpaid awards under the NSA. They also brought additional claims under ERISA § 502(a)(1)(B), asserting that as the assignees of their patients’ benefit rights, they were entitled to payment of the full arbitration award. Finally, they also alleged violations of the Connecticut Unfair Trade Practices Act (“CUTPA”), based on Cigna and Aetna’s pattern of low, late, or non‑payment that they characterized as a deliberate business strategy. In response, Aetna and Cigna moved to dismiss, arguing that the NSA does not provide a private right of action to enforce IDR awards, that the plaintiffs lacked standing under ERISA to bring their claims, and that the CUTPA claims were preempted.
The District Court sided with the service providers, holding that the NSA permits parties to IDR awards under the NSA. Here, the court found that the statutory text of the NSA contained multiple examples of mandatory and rights‑creating language—specifically that insurers “shall” make payment and that awards “shall” be binding. The court also emphasized that while Congress did not incorporate the FAA’s award confirmation provision, that omission was consistent with the fact that NSA awards are self‑executing and immediately enforceable upon issuance, unlike traditional arbitration awards, which must be confirmed in court under the FAA. Critically, the court rejected Cigna and Aetna’s argument that the absence of an express enforcement mechanism precluded judicial enforcement, warning that such an interpretation would lead to “absurd” results—namely, that compliance with IDR awards would rarely be required.
Finally, the court also upheld the service providers’ ERISA claims, finding that they had standing as assignees of their patients’ health plan benefits and could therefore sue to recover benefits due under those plans. The court rejected the defendants’ argument that there was no concrete injury because the patients were not balance billed, emphasizing that the denial of full reimbursement constituted a redressable injury under ERISA regardless of whether the provider or the patient ultimately bore the financial burden. In addition, the court also upheld the plaintiffs’ CUTPA claims, holding that such state law claims were not preempted by either the NSA or ERISA, reasoning that CUTPA claims premised on systemic underpayment practices could coexist with the federal scheme and, if anything, could support its implementation by incentivizing insurers to comply with the NSA’s 30‑day payment deadline through the threat of state‑level penalties.
What’s Next? Growing Judicial Divide and Increasing Likelihood of Appellate Review
The Connecticut court’s decision adds to a growing body of federal district court decisions grappling with how—and whether—IDR awards under the NSA can be enforced. Previously, two other district courts reached conflicting conclusions: the District Court for the District of New Jersey held that the FAA provides a mechanism to confirm NSA awards, while the Northern District of Texas concluded that there is no statutory basis to enforce them under either the FAA or the NSA. The Connecticut ruling generally tracks with the New Jersey District Court, though, by contrast, it grounds enforceability of IDR awards in the NSA itself, independent of the FAA. At bottom, however, with decisions now issued in three separate circuits—and a growing majority of courts concluding that IDR awards are enforceable—the issue is rapidly ripening for appellate resolution.
Meanwhile, appeals are ongoing in the Fifth Circuit, which recently granted a petition for an en banc rehearing of a separate appeal relating to other aspects of the NSA’s implementation. And, in the weeks since the Connecticut court’s decision came down, Aetna has already sought leave to file an interlocutory appeal of the court’s ruling, so the ultimate force and effect of the ruling remains unclear. These developments make further review by the Courts of Appeals all but certain, and review by the Supreme Court increasingly likely. Accordingly, providers and payers alike should take note that the risk landscape for NSA non‑compliance is becoming more defined—and more actionable—and seek legal counsel to guide them as needed.
Arbitration World: the Singapore International Arbitration Centre (SIAC) (Part 2) [Podcast]
Joan Lim-Casanova is joined by Vivekananda Neelakantan (Registrar of the SIAC) to discuss current trends in arbitration under the SIAC Arbitration Rules 2025, including as to users of SIAC arbitration, digital security, AI and the key challenges currently faced by the SIAC as an administering institution.
Supreme Court Rejects Minimum Contacts Requirement to Subject Foreign States to Suits in the U.S. Under FSIA
On June 5, 2025, in a unanimous decision authored by Justice Alito, the United States Supreme Court held that the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. §§1330, 1602 et seq., does not require a plaintiff to prove a foreign state has made “minimum contacts” with the United States sufficient to satisfy the personal jurisdiction test set forth in International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Applying a strict textualist approach, the Supreme Court ruled that personal jurisdiction over a foreign state-defendant exists whenever (1) an exception to foreign sovereign immunity applies and (2) the defendant has been properly served. CC/Devas (Mauritius) Limited, et. al., v. Antrix Corp. Ltd., et. al., No. 23-1201 , 605 U.S. __ (2025).[1]
Devas arose out of a commercial arbitration between two India-based companies, decided in India under Indian law. Antrix Corp. Ltd. (Antrix) is an Indian government-owned entity and is the commercial arm of Indian Space Research Organization. Antrix signed a satellite-leasing agreement with Devas Multimedia Private Ltd. (Devas), a privately owned Indian company organized to develop satellite-based telecommunications technology. Under the agreement, Antrix was to build and launch a new satellite network into geostationary orbit, and Devas was to use the leased satellite capacity to provide multimedia broadcasting services in India. The agreement contained an arbitration provision. After Antrix terminated the agreement with Devas, citing the contract’s force majeure clause, Devas commenced arbitration, and the panel ruled for Devas, awarding $562.5 million in damages and interest.
Three years later, after successfully confirming the award in the United Kingdom and France, Devas petitioned the United States District Court for the Western District of Washington to confirm the award. Devas relied on the arbitration exception to the FSIA. See 18 U.S.C. §1605(6) (providing, among other bases, an exception to foreign state’s immunity where an action is brought to confirm an award made pursuant to an agreement to arbitrate between the foreign state and a private party, and the award is governed by a treaty of the United States, calling for the recognition and enforcement of arbitral awards). The necessary treaty for the enforcement and recognition of the award, of course, is the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which the United States is a signatory.
Antrix opposed the confirmation proceeding on multiple grounds, but the District Court confirmed the award and entered a $1.29 billion judgment against Antrix. On appeal, a Ninth Circuit panel found that personal jurisdiction was lacking and therefore reversed the District Court’s order.[2] The Ninth Circuit panel did not question whether the FSIA’s statutory requirements for personal jurisdiction were satisfied but, bound by the Circuit precedent, the panel explained that FSIA also requires a traditional minimum contacts analysis.
The Supreme Court stated that the legal question being addressed is straightforward. The relevant statute, FSIA’s personal-jurisdiction provision, 28 U.S.C. §1330(b), provides:
(b) Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title.
The Supreme Court stated that since district courts have subject-matter jurisdiction under subsection (a) when any of the FSIA’s immunity exceptions applies, and service under Section 1608 is made when a plaintiff complies with the FSIA’s specialized service-of-process rules, Section 1330(b) makes personal jurisdiction automatic. Quoting a California district court’s decision from 2012, the Supreme Court said that “subject matter jurisdiction plus service of process equals personal jurisdiction” in the FSIA context. The Supreme Court observed that Section 1330(b) does not contain any references to “minimum contacts” and declined to add what Congress left out. The Supreme Court also went on to say that nothing in the 1982 Gonzalez Corp. decision, on which the Ninth Circuit relied, nor in the legislative history of the FSIA, supports an additional “minimum contacts” requirement for personal jurisdiction. Indeed, the relevant House Report states in relevant part that “[t]he immunity provisions … prescribe the necessary contacts which must exist before our courts can exercise personal jurisdiction.” Devas, at 12 (citing H.R. Rep. No. 94-1487, p. 13 (1976)).
The Supreme Court declined to address Antrix’s alternative arguments of why the Ninth Circuit’s decision reversing recognition of the award should be affirmed. Namely, Antrix argued that the minimum contacts analysis was required under the Due Process Clause, that the claims at issue do not fall within the FSIA’s arbitration exception, and that the suit should have been dismissed under forum non conveniens. The Supreme Court said the Ninth Circuit did not address these arguments and remanded the matter for Antrix to litigate these contentions in the Ninth Circuit.
Devas demonstrates the Supreme Court’s continued interest in issues of international arbitration and the Court’s lack of hesitancy in recognizing that enforcement of a foreign arbitral award in the U.S. against a foreign state would rarely satisfy the “minimum contacts” test from International Shoe, and that a reliance on the straightforward text of the statute to demonstrate existence of personal jurisdiction is sufficient. Other arguments raised by Antrix present interesting issues that may come back to the Supreme Court at some point in the future.
[1] This case was decided together with No. 24-17, Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., et. al.
[2] This case presented a complicated dispute in that after Devas obtained the judgment in the District Court but before it could collect on any assets of India in the United States, an Indian corporate la-law tribunal found that Devas had procured the Devas-Antrix agreement by fraud and appointed an Indian Government official to seize control of Devas and wind down its affairs. Devas shareholders and an American subsidiary successfully intervened in the U.S. proceedings, obtained post-judgment discovery of Antrix’s assets in the U.S. and registered the judgment issued by the Western District of Washington in the Eastern District of Virginia, where Antrix held executable assets.
California Supreme Court Hears Oral Argument on 30-Day Arbitration Fee Rule: Key Takeaways from Hohenshelt
In our previous article, “Pay Up or Lawsuit Up: The 30-Day Countdown That’s Fueling Arbitration Disputes,” we explored the legal and practical challenges posed by California’s 30-day arbitration fee payment rule, codified in SB 707. That piece detailed how the rule has become a flashpoint in mass arbitration and privacy claims, with businesses facing the risk of losing their right to arbitrate—and incurring significant sanctions—if they fail to pay arbitration fees within a tight, rigid deadline.
The California Supreme Court’s recent oral argument in Hohenshelt v. Superior Court now brings these issues to the forefront, with the potential to reshape the arbitration landscape in California.
Arguments and Issues at Stake
At oral argument, the employer and business community, supported by the Chamber of Commerce, pressed the point that SB 707 unfairly singles out arbitration agreements for uniquely harsh treatment. They argued that the statute imposes automatic and inflexible penalties for even minor or excusable delays in fee payment, in violation of the Federal Arbitration Act’s (“FAA”) “equal-treatment principle.” This principle prohibits states from placing special burdens on arbitration agreements that do not apply to other contracts. Counsel for Golden State Foods, the employer in the case, emphasized the draconian nature of SB 707, noting that even extraordinary circumstances—such as an earthquake—would not excuse a late payment under the statute as written. Unlike general contract law, where courts can weigh the facts to determine whether a missed deadline constitutes a material breach, the employer argued that SB 707 removes any ability for judicial discretion or flexibility, making breach and waiver automatic and absolute regardless of the circumstances, equities, or the impact of the breach.
The Chamber of Commerce echoed these concerns, arguing that SB 707 was designed to make arbitration a less attractive option by imposing risks and costs not found in other contractual contexts. They contended that the statute’s rigidity could discourage the use of arbitration altogether, undermining the FAA’s pro-arbitration policy.
On the other side, employee and consumer advocates, supported by the California Attorney General, defended SB 707 as a necessary response to documented abuses—specifically, businesses stalling or blocking arbitration by delaying fee payments in bad faith. They contended that the law ensures timely access to arbitration and is consistent with the FAA’s goals of fair and efficient dispute resolution. The Attorney General’s office argued that SB 707 was a reasonable legislative response designed to prevent companies from misusing arbitration agreements to block individuals from vindicating their rights. They also asserted that courts could apply equitable doctrines, such as excusable neglect, to avoid unduly harsh results, even if the statute does not expressly provide for such flexibility.
Key Themes from the Justices
The justices’ questions centered on whether SB 707’s automatic penalties could be harmonized with general contract and equitable principles. Several justices probed the statute’s rigidity, asking whether courts could interpret the law to allow for flexibility in cases of inadvertent delay, excusable neglect, or force majeure. Justice Goodwin Liu, for example, asked whether the statute would allow for exceptions in the event of an earthquake, and was told by counsel for the employer that the statute as written would not. This exchange underscored the concern that SB 707’s strictness may be inconsistent with both general contract law and the FAA’s equal treatment principle.
The Court also examined whether SB 707 truly targets arbitration unfairly, or whether it addresses a unique problem in a reasonable way. The justices appeared interested in whether the law could be interpreted to allow for judicial discretion, or whether its strictness rendered it inconsistent with the FAA’s mandate of equal treatment for arbitration agreements.
What’s Next
The California Supreme Court’s decision—which may come as soon as August—will have significant implications for businesses and individuals alike. If the Court upholds the rule in its current form, businesses could face strict deadlines for arbitration fee payments, with little room for error, even in extraordinary circumstances. This would reinforce the risks and settlement pressures we described in our earlier article. If the Court finds the law preempted by the FAA or interprets it more flexibly, the landscape for consumer and employment arbitrations in California could shift dramatically, potentially restoring some measure of judicial discretion and reducing the leverage that mass arbitration claimants currently wield.
For now, companies using arbitration agreements should closely monitor this case and review their internal processes for managing arbitration fee payments. The outcome may shape the risks and strategies for handling consumer and privacy claims in California for years to come.
Fifth Circuit Affirms a Party’s Strategic Maneuver to Compel Arbitration From Federal Court Even When Forum Clause Required Remand
In a notable clarification of removal and arbitration procedure, the Fifth Circuit in Odom Industries, Inc. v. Sipcam Agro Solutions, LLC, No. 24-60410 (5th Cir. June 4, 2025), held that a defendant may remove a case to federal court to compel arbitration—even when a contractual forum-selection clause requires remand—as long as federal jurisdiction exists.
Ordinarily, motions to remand are evaluated on jurisdictional grounds. If a federal court lacks subject-matter jurisdiction (typically due to lack of diversity or an insufficient amount in controversy), remand is mandatory. That is the general rule. But Odom illustrates a strategic exception in arbitration cases: when removal would be proper but for a forum-selection clause, the federal court must first resolve a motion to compel arbitration before addressing non-jurisdictional remand arguments.
In Odom, the district court bypassed a pending arbitration motion and remanded the case based on a forum-selection clause requiring the suit to be “filed and maintained in . . . state court.” The Fifth Circuit reversed, holding that forum-selection clauses do not deprive federal courts of jurisdiction. Once removal is complete and jurisdiction is unchallenged, the Federal Arbitration Act requires the district court to prioritize the determination of a pending motion to compel arbitration. Separately, the Fifth Circuit affirmed that, unlike other remand cases, a district court’s order of remand based on the interpretation of a contractual forum-selection clause is “immediately appealable.” That means a defendant seeking to compel arbitration has a backstop to cure premature remands in such cases.
The Fifth Circuit ultimately reaffirmed that forum-selection clauses pointing to state court should be enforced through the doctrine of forum non conveniens, not through a jurisdictional challenge.
Strategic Takeaway: Even where a contract includes a state-court forum-selection clause, a defendant can remove to federal court to compel arbitration. This strategy hinges on the fact that forum clauses are contractual, not jurisdictional, and cannot override federal district courts’ obligation to resolve arbitration matters first. This is a narrow but potentially powerful maneuver that can shift the playing field in early-stage litigation for defendants that seek to obtain the benefits of federal court before compelling the case to arbitration. Whether the federal court will retain its standard supervisory role over a compelled arbitration—as contemplated by the Supreme Court’s decision in Smith v. Spizziri (2023)—remains an unresolved question for another day.
“Parties may neither confer subject matter jurisdiction on the [federal] court nor strip it of such jurisdiction by agreement or waiver.”
A Fact-Intensive Inquiry: How California Courts Are Resolving Authenticity Disputes of Electronically Signed Arbitration Agreements
For more than a decade, California courts have wrestled with the challenge of how to resolve disputes over the authenticity of electronically signed arbitration agreements.
While the State Supreme Court has not yet offered conclusive guidance, decisions by the State’s various appellate courts offer insight into what factors a court is likely to consider.
As we have noted before, the holding in Epic Systems v. Lewis contributed to a proliferation of arbitration agreements with class and collective action waivers. Our prior analysis predicted certain datapoints one should consider capturing to support a petition to compel arbitration when disputing the authenticity of an electronically signed agreement. The holdings in four cases over the last 11 years confirm that success will require surviving a demanding and fact intensive inquiry, one that asks much of parties seeking to compel arbitration.
Ruiz v. Moss Bros. Auto Group, Inc., 232 Cal. App. 4th 836 (2014)
Well before remote work and remotely onboarding employees were common practice, California courts faced the question of how to determine the authenticity of electronically signed arbitration agreements. In Ruiz v. Moss Bros. Auto Group, Inc., the Court of Appeal addressed this issue in resolving a wage and hour class action dispute. Citing an electronically signed arbitration agreement from 2011, the defendant petitioned the trial court for an order compelling arbitration of the named plaintiff’s individual claims. In support of its petition, the defendant provided declarations by an employee that summarily described the company’s onboarding process and—based on that summary description—asserted that the named plaintiff electronically signed the agreement by virtue of his employment with the company. The evidence also included a copy of the executed agreement, which bore the named plaintiff’s alleged electronic signature and the date and time the document was signed. In response, the named plaintiff stated he did not recall signing an arbitration agreement, insisted that he would not have signed such an agreement, and argued that the defendant had not proven the authenticity of his electronic signature by a preponderance of the evidence. The trial court denied the petition, finding that the defendant failed to establish the existence of an enforceable agreement to arbitrate.
The Court of Appeal for the Fourth District affirmed the trial court’s decision, holding that the defendant-appellant failed to carry its burden of proving the authenticity of the electronic signature because the summary language and assertions in the employee’s declarations did not explain how the employee reached her conclusions or how she was able to infer that the named plaintiff was in fact the person who signed the agreement. While the declarations explained the steps the company took for employee onboarding—including the use of a unique login ID and password to complete the onboarding paperwork, which included the arbitration agreement—the Court held that this evidence was lacking because it did not explain with sufficient specificity how the employee could conclude the named plaintiff actually executed the agreement. The Court also rejected the defendant-appellant’s argument that it was not required to authenticate the named plaintiff’s signature, holding that precedent and statute both shifted the burden of authentication back onto the defendant when the named plaintiff claimed he did not recall signing the agreement and that he would not have signed it if presented to him.
In short, Ruiz introduced the concept that a summary statement of how an arbitration agreement might have been electronically signed in the normal course of an employee’s onboarding is insufficient. Instead, it called for a specific, detailed explanation of how one could conclude no one else but the signatory could have placed his or her electronic signature on the document.
Espejo v. Southern California Permanente Medical Group, 246 Cal. App. 4th 1047 (2016)
Two years after Ruiz, another appellate court weighed in. This time, however, the court reached the opposite conclusion and held in favor of the party moving to compel arbitration. In Espejo, the plaintiff sued his former employer for wrongful termination. As in Ruiz, the defendant petitioned for an order to compel arbitration on the basis of an electronically signed agreement. The defendant also submitted declarations that described in detail the company’s employee onboarding program, its process for reviewing electronically signed documents, and security features meant to ensure the authenticity of the electronic signature. Specifically, the declarations referenced the use of private and unique login credentials provided directly to the employee, system safeguards that required the employee to reset credentials with their own self-selected password before being able to complete the onboarding paperwork, and explained how only the employee could have inserted their name into the electronic signature fields. The plaintiff denied signing the arbitration agreement, and, despite the detailed declaration, the trial court denied the petition to compel arbitration in part because it declined to consider a supplemental declaration submitted by the defendant that contained the detailed information that explained how no one other than the employee could have caused the electronic signature.
On review, the appellate court outlined the same process and approach as used in Ruiz, but found its way to a different outcome by holding that the declarations in Espejo went further than the summary and conclusory statements offered by the declarant in Ruiz. The appellate court concluded that the defendant-appellant did meet its burden here and that it did not repeat the error the defendant in Ruiz committed. The appellate court further held that the trial court committed error by refusing to consider the defendant-appellant’s supplemental declaration, concluding that it was timely submitted and that the trial court’s refusal to consider the document was an abuse of discretion.
Post-Espejo Cases
Bannister v. Marinidence Opco, LLC, 64 Cal. App. 5th 541 (2021)
Whether it realized this or not, the court’s holding in Espejo signaled to future courts when an electronically signed arbitration agreement is sufficiently authenticated. This is demonstrated in Bannister, which came five years after Espejo and concerned an action for discrimination, retaliation, and other claims. Like in Espejo, the plaintiff in Bannister denied signing the arbitration agreement. In response, the defendant did not present evidence of any kind of unique or user-specific credentials or log in data. Instead, the record was mixed and suggested that a single employee input personnel data for as many as 20 employees, including data for the plaintiff, who may or may not have used the computer terminal to complete her onboarding paperwork. In the absence of a secure, user-specific login method, as well as the suggestion that another person input key data, the Bannister court concluded the defendant did not satisfy its burden of proving the authenticity of the electronic signature.
Garcia v. Stoneledge Furniture, LLC, 102 Cal. App. 5th 41 (2024)
More recently, the Court of Appeal for the First District seemingly endorsed the approach in Espejo and went further by outright suggesting that the proponent of an arbitration agreement must offer substantive assurances that no one other than the plaintiff could have signed the arbitration agreement in question. In Garcia, the plaintiff sued her former employer and other entities for sexual harassment. Citing an electronically signed arbitration agreement completed during Ms. Garcia’s onboarding, the defendants petitioned to compel arbitration. In support of their petition, the defendants relied on a declaration by a human resources information systems analyst, which stated that Ms. Garcia would have created a unique user ID and confidential password for her onboarding paperwork. The analyst’s declaration further averred that Ms. Garcia’s unique credentials would have served as her electronic signature on her new hire documentation, that she accessed the arbitration agreement through a dedicated link, and that her electronic signature on that document signaled her assent to the arbitration agreement. In other words, the evidence presented echoed that offered by the defendants in Espejo.
Ms. Garcia, however, disputed the authenticity of her signature on the arbitration agreement by pointing to discrepancies between the electronic signature there and other signature fields in her onboarding paperwork. She further noted that the arbitration agreement did not contain an indication that her unique credentials had been entered or used to complete that form, unlike the other documents she completed for her onboarding. Ms. Garcia also noted the absence of an IP address on the arbitration agreement, which stood in contrast to the other documents, all of which did have an IP address listed. Ms. Garcia also alleged the analyst’s declaration was insufficient because the analyst did not have personal knowledge of her completing the onboarding paperwork.
At the hearing on the petition to compel arbitration, the defendants argued that an evidentiary hearing was necessary to resolve the factual dispute, but the trial court denied this request and found in favor of Ms. Garcia, citing the absence of a date, time, or IP address on the executed arbitration agreement, as well as the fact that the analyst was not a percipient witness to Ms. Garcia’s alleged completion of the paperwork.
On review, the Court of Appeal affirmed the trial court’s decision. In reaching that conclusion, the Court deferred to the trial court’s findings of fact and noted that the analyst’s declaration merely explained how the signature could have gotten there rather than show that only Ms. Garcia could have placed the electronic signature on the arbitration agreement. In short, the Garcia court took a concept first articulated in Ruiz—the idea of confirming the electronic signature was the act of the plaintiff—and extended it further in two ways. It did so first by not rejecting the trial court’s suggestion that the analyst, who did not personally witness the act of Garcia signing the document, could not unilaterally prove the authenticity of the electronic signature. By not engaging with this idea, the appellate court may have inadvertently endorsed a standard where a percipient witness is always necessary to determine authenticity. The appellate court also went further than Ruiz by requiring that the defendant offer evidence that excluded the possibility that anyone other than the plaintiff could have been the source of the signature. In essence, the Court held that proving authenticity necessarily includes eliminating all possible or even imaginary doubt over the authenticity of the electronic signature. This is a staggering requirement given California law has long recognized that the concept of eliminating even imaginary or all possible doubts exceeds proof beyond a reasonable doubt—the highest burden in the American legal system,[1] suggesting that the proponent of an arbitration agreement must meet a burden even higher than the one that safeguards our most fundamental Constitutional rights.
The evolution from Ruiz to Garcia suggests an embrace of exacting requirements on parties seeking to enforce arbitration agreements. This new standard, however, raises two untested questions: 1.) Does the requirement of excluding all possible alternatives prejudice proponents of arbitration agreements by impermissibly subjecting them to a heightened evidentiary standard (i.e., one beyond a preponderance of the evidence), and 2.) Do these demanding standards work against the long held and recognized public policy that favors use of arbitration as a means of dispute resolution? Both are questions that could be raised and explored as the law further develops.
Takeaways
For the time being, parties seeking to ensure the enforceability of arbitration agreements should take the lessons from these four cases to heart and design their processes in a way that arms them with the facts necessary to convince a trial court that an electronic signature is authentic. Such strategies include:
Developing or using secure platforms that can trace back directly to the intended recipient/signatory to an arbitration agreement;
Requiring the electronic signatory to the arbitration agreement to create a unique username and password;
Ensuring that no one else accessed the electronic signatory’s account;
Recording the date, time, and IP address at the time the agreement is electronically signed;
Requiring written consent from the electronic signatory that they consent to using an electronic signature;
Using consistent formatting and eliminating any differences or inconsistencies in how an electronic signature appears across different forms or fields when presented together;
Having another person present to witness the electronic signature; and
Sending a confirmation email to the signatory and the originating party listing and providing copies of all electronically signed documents.
While these steps might be burdensome or challenging, the holdings in these cases demonstrate their significance should litigation arise.
ENDNOTES
[1] See CALCRIM No. 220, Judicial Council of California Criminal Jury Instructions (2024 edition).
CFPB and Pawn Store Operator to Settle MLA Suit
On May 30, the CFPB and a national pawn store operator filed a joint status report in the U.S. District Court for the Northern District of Texas announcing that they have reached an agreement to resolve a 2021 Bureau lawsuit alleging violations of the Military Lending Act (MLA) and a 2013 CFPB consent order. The suit alleged that the pawn store operator and its subsidiary issued thousands of high-interest loans to active-duty servicemembers and their families in violation of federal law.
In its complaint, the CFPB alleges that the company:
Charged servicemembers unlawful interest rates. The company allegedly made over 3,600 pawn loans to covered borrowers with MAPRs exceeding the MLA’s 36% cap, in some cases reaching over 200%.
Imposed prohibited arbitration clauses. Loan agreements allegedly included mandatory arbitration clauses, in violation of the MLA’s express restrictions.
Failed to provide required loan disclosures. The company allegedly failed to deliver required MLA disclosures, including MAPR statements, at the time of the transaction.
Violated a 2013 CFPB consent order. The company, as a successor to a previously sanctioned entity, allegedly continued making illegal loans in violation of the 2013 consent order. The order required more than $14 million in consumer refunds and a $5 million civil penalty, and mandated that the company cease alleged misconduct targeting military families and improve MLA compliance.
While the exact terms of the new settlement have not yet been disclosed, the CFPB had previously sought injunctive relief, rescission of void contracts, consumer redress, civil money penalties, and corrections to consumer credit reports.
Putting It Into Practice: Although the Bureau has scaled back certain enforcement actions in recent months, enforcement of MLA violations continues to be a priority for the current administration (previously discussed here and here). Lenders offering consumer credit to servicemembers should continue to review and strengthen their MLA compliance protocols to ensure compliance.
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Dubai Court of Appeal Annuls Anti-Suit Injunction Issued in ICC Arbitration Proceedings
Introduction
In a recent decision, the Dubai Court of Appeal (Court of Appeal) in Case No. 8 of 2025 (issued on 28 April 2025) annulled an interim award, issued by an arbitral tribunal in an ongoing International Chamber of Commerce (ICC) arbitration, which prohibited the respondent from filing proceedings before any court. The Court of Appeal held that arbitration proceedings cannot suspend or override a party’s constitutional right to access the courts unless expressly permitted by law, and the anti-suit injunction issued by the arbitral tribunal did not qualify as a valid interim or precautionary measure under the laws of the United Arab Emirates (UAE).
Background
The arbitral tribunal in an ICC arbitration, seated in Dubai, issued an interim award preventing the respondent in the arbitration from filing any claim before any court with respect to the matters in dispute in the arbitration. The respondent applied to the Court of Appeal to annul the award on the basis that it prevented the respondent from exercising its constitutional right to file court proceedings and that the anti-suit injunction did not constitute a valid interim or precautionary measure under Article 21 of Federal Law No. 6 of 2018 (the UAE Arbitration Law).
Although the Court of Appeal recognised the purpose of anti-suit injunctions (noting that they can be used to guarantee the effectiveness of an arbitration agreement and avoid the risk of conflicting judgments), the Court of Appeal held that the right to litigation is a constitutional right prescribed by law and that a court or arbitral tribunal cannot issue an anti-suit injunction unless the law expressly permits. As the arbitration was seated in Dubai, the applicable law was the UAE Arbitration Law. The Court of Appeal held that the UAE Arbitration Law does not permit an arbitral tribunal to issue an anti-suit injunction, and therefore, the tribunal’s interim award lacked legal basis and had to be annulled.
Analysis
Article 21 of the UAE Arbitration Law entitles an arbitral tribunal to issue interim or preventive measures as it may deem necessary. One of the permitted orders, contained in Article 21(1)(e) of the UAE Arbitration Law, is an order directing or refraining a party from taking action that is likely to cause current or imminent harm or prejudice to the arbitral process itself. The Court of Appeal’s decision in Case No. 8 of 2025 indicates that the onshore UAE courts do not consider that an anti-suit injunction falls within the scope of this provision.
It remains to be seen whether the approach taken by the Court of Appeal in this case will be maintained by the onshore UAE courts. If followed, parties in arbitration proceedings seated in Dubai (or elsewhere in the UAE) face the prospect of being required to incur the time and cost of engaging a local advocate to file a jurisdictional objection against parallel proceedings in the onshore UAE courts on the basis of the parties’ arbitration agreement.
Janie & Jack’s Alleged CIPA Violations Consolidated, Thus Avoiding Over 2,000 Individual Arbitration Claims
This week, the U.S. District Court for the Northern District of California ruled in favor of children’s clothing retailer Janie & Jack, which sought to enjoin over 2,400 individual arbitration claims resulting from alleged violations of the California Invasion of Privacy Act (CIPA). Now, Janie & Jack will confront a single privacy class action suit as opposed to the more than 2,400 individual arbitration claims by its website visitors.
The parties notified the court of their agreement not to pursue arbitration but to rather proceed through a consolidated class action. Janie & Jack voluntarily dismissed its lawsuit in an attempt to avert the numerous claims by consumers.
Website visitors accused Janie & Jack of violating CIPA and the federal Wiretap Act through its website’s information gathering and tracking practices (also known as trap and trace claims). Janie & Jack alleges that such claims are inadequate because they lack allegations that the consumers created any accounts or conducted any transactions on the website or that Janie & Jack had breached any of its online terms.
Further, although Janie & Jack’s website terms include an arbitration clause, it claimed that the claimants never assented to the contract.
In its response, the retailer emphasized its intent to prevent the growing use of arbitration agreements as “weapons” by plaintiffs’ attorneys, thwarting their intended use of an efficient, effective, and timely progression of claims.
This case highlights a common practice: thousands of individuals, all represented by the same counsel, simultaneously file, or threaten to file, arbitration demands with nearly identical claims.
These allegations mark yet another instance of the growing trend of the plaintiffs’ bars’ push for “trap and trace” claims because they can leverage existing wiretap laws (particularly in California under CIPA) to argue that common online tracking technologies like cookies, pixels, and website analytics tools essentially function as trap and trace devices, allowing them to file complaints against companies for collecting user data without proper consent, even though these technologies were originally designed for traditional phone lines, not the internet, opening up a large pool of potential plaintiffs and potentially significant damages.
If you haven’t heard it enough, here it is again: NOW is the time to assess your website’s online trackers and update your cookie consent management platform, website privacy policy, and consumer data collection processes.
This article was co-authored by Mark Abou Naoum
Arbitration Rights Are Not Indestructible: Appellate Division Finds Waiver Based on Litigation Conduct
Arbitration provisions are a cornerstone of dispute-resolution strategy. As the Appellate Division recently made clear in Hopkins v. LVNV Funding, LLC, however, the right to arbitrate is not self-executing—and can be forfeited through strategic delay or active participation in litigation. A party that eschews arbitration in favor of judicial process may find those rights extinguished when invoked later. The decision demonstrates that arbitration rights are preserved not merely by contract but by conduct consistent with their enforcement. Put simply, a contractual right to arbitrate means little if a party’s litigation conduct signals abandonment rather than preservation.
In response to LVNV Funding, LLC’s (“LVNV”) complaint alleging that it had defaulted on its account with Credit One Bank, N.A., incurring $746.71 in debt, Randy Hopkins (“Hopkins”) filed an answer and “class action counterclaim” in May 2022 against several LVNV-affiliated debt purchasers and collectors (“Defendants”). Hopkins v. LVNV Funding, LLC, 481 N.J. Super. 49, 56 (App. Div. 2025). Hopkins alleged that Defendants violated the New Jersey Consumer Finance Licensing Act and the Consumer Fraud Act by attempting to collect consumer debts without the requisite state licenses. Id. at 57. Though represented by counsel, Defendants waited almost sixteen months before moving to compel arbitration. Id. at 64. During that time, they filed a motion to dismiss which the trial court granted in part, resulting in the dismissal of Hopkins’s unjust enrichment claim. Id. at 58. When Defendants ultimately filed an answer to Hopkins’s remaining claims, not only had they failed to assert arbitration as an affirmative defense, id. at 65, but their Rule 4:5-1(b)(2) certifications expressly disclaimed any pending or contemplated arbitration, id. at 58.
Only after Hopkins moved to compel their long-overdue discovery responses, did Defendants finally invoke the arbitration clause and move to compel arbitration. Id. at 59. The trial court granted the motion to compel arbitration, reasoning that the parties had not engaged in sufficiently “prolonged litigation” to support a finding of waiver. Id. In doing so, however, the court focused primarily on the passage of time. It gave little weight to Defendants’ litigation conduct, including their earlier motion to dismiss, omission of arbitration from their pleadings, and affirmative disclaimer of arbitration in the Rule 4:5-1 certifications accompanying the pleadings. Ibid. The Appellate Division reversed and remanded, holding that the trial court failed to conduct the totality-of-the-circumstances analysis required under Cole v. Jersey City Medical Center, 215 N.J. 265, 280–81 (2013). Hopkins, 481 N.J. Super. at 59.
Applying Cole, the Appellate Division considered seven non-exclusive factors to determine whether Defendants had waived their right to arbitrate. These include:
(1) the delay in making the arbitration request; (2) the filing of any motions, particularly dispositive motions, and their outcomes; (3) whether the delay in seeking arbitration was part of the party’s litigation strategy; (4) the extent of discovery conducted; (5) whether the party raised the arbitration issue in its pleadings, particularly as an affirmative defense, or provided other notification of its intent to seek arbitration; (6) the proximity of the date on which the party sought arbitration to the date of trial; and (7) the resulting prejudice suffered by the other party, if any.[Cole, 215 N.J. at 280-81.]
In analyzing all of the above factors, the court first found that the delay was substantial. Defendants waited nearly sixteen months to raise arbitration, a period the appellate court found particularly unreasonable given that they were represented by counsel and had actively litigated the case. Hopkins, 481 N.J. Super. at 64. Second, the motion practice supported waiver. Defendants filed a dispositive motion to dismiss and secured dismissal of a claim, which signaled submission to the trial court’s adjudicative authority. Ibid. Third, the appellate court found the timing of the arbitration demand to be strategic, noting that Defendants sought arbitration only after gaining partial dismissal and when discovery pressure mounted. Ibid. Fourth, although Defendants had not served discovery, they failed to respond to Hopkins’s discovery requests and filed for arbitration two days after Hopkins moved to compel those responses. Id. at 64-65. Fifth, Defendants’ failure to raise arbitration in their pleadings—combined with express representations in their Rule 4:5-1(b)(2) certifications that no arbitration was pending or contemplated—weighed heavily in favor of a finding of waiver. Id. at 65. Sixth, the proximity to trial weighed against a finding of waiver, as no trial date had been set. Ibid. Seventh, the appellate court found prejudice based on Hopkins’s investment of time and resources in litigating the matter and the fact that a claim (unjust enrichment) had already been dismissed through motion practice. Id. at 66. The Appellate Division concluded that considering the totality of the circumstances, Defendants’ conduct was inconsistent with the right and that the “purported right” had therefore been waived. Ibid.
Hopkins reinforces the importance of asserting arbitration rights early, clearly, and consistently. Parties wishing to preserve arbitration should assert their right to the dispute resolution mechanism at the outset of litigation—typically in a pre-answer motion to dismiss and to compel arbitration or in an answer. If that motion is denied, it is subject to immediate appellate review pursuant Rule 2:2-3, which treats such orders as final for appeal purposes.
If an answer is filed, the Rule 4:5-1(b)(2) certification must invoke the possibility of arbitration. Disclaiming any pending or contemplated arbitration in a Rule 4:5-1(b)(2) certification can later be used as evidence of waiver. Although attorneys often treat this certification as routine, Hopkins serves as a reminder that courts will hold parties to the representations made pursuant to Rule 4:5-1—especially where subsequent conduct reinforces the appearance that arbitration is off the table. The Appellate Division also emphasized that Rule 4:5-1 certifications carry a continuing obligation to amend if arbitration later becomes a viable or intended course of action. Id. at 65. A failure to amend the certification in a timely manner—especially when coupled with dispositive motion practice, participation in discovery, or delay until adverse rulings loom—can weigh heavily in a court’s waiver analysis.
To avoid these pitfalls, attorneys should flag and assess arbitration provisions at the outset of a case. Strategic inconsistency is risky and may result in the permanent forfeiture of a bargained-for right. Ultimately, Hopkins sends a cautionary message to all litigants who intend to rely on arbitration clauses—whether in low-stakes consumer matters or complex commercial disputes: courts will enforce such provisions only when parties treat arbitration as a right to be proactively preserved, not casually presumed.
Mass Arbitration Rules Under Scrutiny as Live Nation Asks SCOTUS to Overturn Heckman
Live Nation’s petition to overturn the Ninth Circuit’s Heckman decision highlights the importance of allowing parties to develop arbitration procedures tailored to mass arbitration.
Heckman casts a shadow on attempts by arbitration services and companies to design rules needed to address the challenges and complexities of mass arbitration proceedings brought by consumers and employees.
Until the Supreme Court weighs in, companies should exercise increased caution in drafting arbitration agreements with mass arbitration procedures.
On May 5, 2025, Live Nation filed a petition for writ of certiorari asking the U.S. Supreme Court to address two issues: (1) clarify whether the Federal Arbitration Act (FAA) protects arbitration agreements with procedures designed for “mass arbitration” and (2) decide whether California’s severability doctrine is preempted by the FAA because it targets and disproportionately invalidates arbitration agreements.
Background
Live Nation’s petition comes in the wake of the Ninth Circuit’s decision in Heckman v. Live Nation Ent. Inc., which invalidated arbitration agreements between Live Nation and consumers who bought tickets on Ticketmaster’s website. The agreements at issue were to be administered by New Era ADR and contained provisions designed to manage mass arbitrations. Specifically, the agreements offered two types of arbitration: (1) “Standard Arbitration” procedures akin to traditional arbitration on an individual basis and (2) “Mass Arbitration” procedures designed for the management of five or more cases with common issues of law or fact. The Mass Arbitration rules included special mechanisms to manage mass arbitrations, including “batching” of similar cases and using “bellwether” cases to inform and encourage settlement. The rules also included discovery limitations, briefing limitations, limited rights to appeal grants of injunctive relief, and arbitrator selection provisions that, according to the plaintiffs, conflicted with California law.
The Ninth Circuit held that the arbitration agreement was procedurally and substantively unconscionable. It took issue with how the agreements were presented to consumers and criticized New Era’s rules as “internally inconsistent, poorly drafted, and riddled with typos.” The court went on to portray portions of the New Era rules as unfair and designed to protect the company and force claimants into an unfavorable forum.
The Ninth Circuit then held on “alternate and independent grounds” that “the FAA does not preempt California’s Discover Bank rule as it applies to mass arbitration.” Under Discover Bank, the California Supreme Court effectively held that most class actions waivers are unconscionable in consumer contracts. This rule was later extended to employment arbitration agreements in Gentry v. Superior Court, 42 Cal. 4th 443 (2007). However, in Concepcion, the Supreme Court held that the Discover Bank rule was preempted by the FAA because it was hostile to arbitration agreements. By holding that the FAA does not preempt Discover Bank in the context of mass arbitrations, the Ninth Circuit may have opened the door to invalidating arbitration agreements with mass arbitration procedures, though the decision might be limited to the unique facts presented in Heckman.
Cert Petition
Live Nation’s petition to overturn Heckman highlights the importance of allowing parties to develop arbitration procedures tailored to mass arbitration. The plaintiffs’ bar has pioneered the tactic of filing hundreds or thousands of identical arbitration claims to saddle companies with significant filing fees upfront and using that leverage to pressure companies into settlement, regardless of the merit of the claims. Companies and arbitration service providers should be free to develop arbitration procedures designed to resolve mass arbitrations fairly, including reasonable experimentation batching, bellwether cases and less-punitive fee structures. The Supreme Court has repeatedly recognized that arbitration is a matter of contract, and both the Supreme Court and other circuit courts have recognized that classwide arbitration procedures can be permissible under the FAA if properly agreed on. The tension between these precedents and the Ninth Circuit’s decision in Heckman may lead the Supreme Court to take up the case.
Additionally, Live Nation’s petition contends that the district court should have severed any unconscionable provisions from its agreement or enforced a provision to use a back-up arbitration service provider (FairClaims) if New Era was unable to conduct the arbitration. The petition contends that California’s severability doctrine facially targets arbitration agreements, and, in practice, California courts decline to sever offensive clauses from arbitration contracts but liberally sever offensive clauses from non-arbitration contracts. The petition provides a detailed analysis showing that California courts invalidate the entire contract at a statistically higher rate for arbitration contracts compared to non-arbitration contracts. In a prior case in 2015, the Supreme Court granted certiorari to address whether California’s arbitration-specific severability rule is preempted by the FAA, only to have the case settle prior to oral argument. The Court’s previous interest in this issue suggests the Court might grant certiorari again.
Takeaways
The scope of the Ninth Circuit’s decision in Heckman is not readily clear and might be limited to the specific arbitration agreement and provisions used by Live Nation. Yet, the decision casts a shadow on attempts by arbitration services and companies to design rules needed to address the challenges and complexities of mass arbitration proceedings brought by consumers and employees. Until the Supreme Court weighs in, companies should exercise increased caution in drafting arbitration agreements with mass arbitration procedures. Companies should also carefully review arbitration agreements for compliance with California law, as strict application of California’s unconscionability and severability doctrines can result in the complete invalidation of arbitration agreements.