For the second time in two years, the U.S. Supreme Court is being asked to decide whether the Federal Arbitration Act (FAA) preempts California law (the “McGill Rule”) which invalidates arbitration agreements that waive the right of consumers to seek public injunctive relief. This time, however, there are changed circumstances that increase the odds that the Court will grant review of this critically important arbitration issue.
Earlier, in June 2020, the Court denied two petitions for certiorari that presented the same FAA preemption issue. We reported on those cases extensively and filed an amicus brief on behalf of the American Bankers Association and the Consumer Bankers Association in support of the petitioners. Those cases arose from Ninth Circuit opinions which held that the FAA does not preempt the McGill Rule
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