Biting Back at Mass Arbitrations

Mass arbitrations have been the rage for the last several years. Frequently seen as a way to do an end-around class action waivers, mass arbitrations typically involve the filing of a bunch of cases against the same Respondent. The AAA’s definition, in its Mass Arbitration Supplementary Rules, is “25 or more similar Demands for Arbitration filed against or on behalf of the same party or related parties.” The recent TurboTax settlement is among the more well known instance of mass arbitrations; tens of thousands of Demands were filed against the software maker Intuit.

In the first few weeks of this year, one law firm filed over 2,000 Demands against L’Occitane en Provence, the international luxury retailer of beauty produces and home goods. L’Occitane has bitten back. On February 8th, the company sued Zimmerman Reed, the Minnesota law firm that filed all those cases. As alleged in the Complaint, the law firm engaged in an unlawful conspiracy to continue manufacturing frivolous arbitration claims” and “knowingly and willfully manufactured … claims for the purpose of extorting” settlements from the company.

While it is anticipated that this case will take some time to play itself out, it’s worth watching as it could have a significant effect on the mass arbitration world.

To read the Complaint, click here.