As my Reuters colleague Mike Scarcella
reported, the appeals court concluded that the mass arbitration protocol offered by Live Nation’s arbitration provider, New Era, featured rules that were “so dense, convoluted and internally contradictory to be borderline unintelligible.” (New Era disputed that characterization, insisting that its rules are “objective [and] easy to understand.”)
But I’m going to focus on what the 9th Circuit called "an alternate and independent ground" for refusing to compel arbitration. This "alternate" holding could have repercussions far beyond Live Nation’s case.
New Era’s mass arbitration rules, which come into play when a company is facing at least five similar demands for arbitration, call for “batching” cases before a single arbitrator whose rulings in three bellwether proceedings become precedent in all of the other batched cases. New Era’s protocol is unique in its specifics, but dozens (if not more) of companies have adopted roughly similar batching and bellwether rules to deal with mass arbitration.
The 9th Circuit panel — Judges William Fletcher, Morgan Christen and Lawrence VanDyke — held that the Federal Arbitration Act does not apply to the kind of complex, aggregate regimen that Live Nation tried to impose on its consumers.
