New Mexico Supreme Court strikes down no-class-action arbitration clause: Fiser v. Dell Computer Corp.

I'm still catching up with some of the decisions handed down while my blog was on hiatus in June. In Fiser v. Dell Computer Corp., ___ S.W.3d ___ (N.M. Jun. 27, 2008), the New Mexico Supreme Court refused to enforce a class action ban in an arbitration clause in a consumer contract:

We hold that, in the context of small consumer claims that would be prohibitively costly to bring on an individual basis, contractual prohibitions on class relief are contrary to New Mexico’s fundamental public policy of encouraging the resolution of small consumer claims and are therefore unenforceable in this state. We reverse.

This pronouncement in some respects goes even further than our own Supreme Court's Discover Bank decision, which was cited in Fiser. The Fiser opinion is full of choice quotations from class action decisions from across the country. It is definitely worth a read.

On July 3, 2008, the Wall Street Journal reported on Fiser in an article called "Recent Rulings Bolster the Case for Class Actions." And yesterday's National Law Journal had an opinion piece on mandatory arbitration clauses called "Big Business Acts the Bully."

Comments

[reetha]

"Numerous class action lawsuits were filed against FedEx Ground alleging that the company misclassified its pickup and delivery drivers as independent contractors rather than employees; the Judicial Panel on Multidistrict Litigation consolidated the class actions in the Northern District of Indiana, and the plaintiffs in the class action cases characterized as “Wave 1,” “Wave 2” and “Wave 3” moved the district court for class action certification. In re FedEx Ground Package System, Inc., Employment Prac. Litig., ___ F.Supp.2d ___ (N.D. Ind. March 25, 2008) [Slip Opn., at 1]. As the federal court summarized, these class action plaintiffs “assert that although FedEx Ground represents to its drivers that they are only partnering with FedEx Ground and will essentially own their own businesses, all FedEx Ground drivers sign the FedEx Ground Operating Agreement, which actually reserves to FedEx Ground the right to exercise pervasive control over the method, manner, and means of the drivers’ work,” id."
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reetha

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