Assuming that the traditional prerequisites for a class action have been met, courts have four choices: (1) order the dispute to be resolved in an individualized arbitration, thereby denying plaintiffs either a litigation or arbitration venue for their class claims; (2) refuse to mandate arbitration, and instead allow plaintiffs to litigate their class claims; (3) order that the dispute be resolved through an arbitral class action, also known as classwide arbitration; or (4) order the dispute to arbitration but allow the arbitrators to make the determination as to whether the dispute should be resolved individually or on a class basis.
In short, it is telling that in all of the arbitral class actions that attorneys have discussed with this author, the judge rather than the arbitrators decided all the critical class action issues. When the parties have agreed to a broad arbitration clause, it is not appropriate to exclude an entire class of disputes from arbitration, unless permitting class arbitration would violate constitutional, statutory, or contractual interests. Legislation will be needed to prevent companies from using binding arbitration clauses to eliminate class actions entirely, to the extent we decide it would be undesirable to allow companies to insulate themselves from class actions, and to the extent that courts fail to accept the statutory and contractual arguments set out in this Article or elsewhere.
42 Wm. & Mary L. Rev. 1 (2000).
Sternlight, Jean R., "As Mandatory Binding Arbitration Meets the Class Action, Will the Class Action Survive?" (2000). Scholarly Works. Paper 271.