Ninth Circuit Strikes Mass Arbitration Agreement As Unenforceable Under California Law

On October 28, 2024, the Ninth Circuit struck a mass arbitration agreement as unconscionable and unenforceable under California law in Heckman v. Live Nation Ent., Inc., No. 23-55770. The three-judge panel affirmed the district court's decision holding that the arbitration agreement's delegation clause was unconscionable under California law. The panel also held that the entire agreement was unconscionable and, therefore, unenforceable, under California law.

The arbitration agreement at issue contained a delegation clause that required disputes to be decided through an expedited/mass arbitration proceeding conducted by "a newly created entity, New Era ADR, using novel and unusual expedited/mass arbitration procedures." Unlike traditional arbitration proceedings, the expedited/mass arbitration proceedings provided that an arbitrator's decision in three "bellwether cases" would be precedent for all cases included in the group of similar cases, known as a "batch";