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Enforceability of Pre-Dispute Jury Waivers: An Update

By Fredric A. Cohen
August 31, 2007

Arbitration is under judicial and legislative attack. Late last year, the Ninth Circuit Court of Appeals held an unexceptional arbitration agreement to be substantively unconscionable simply because it allowed the franchisor to litigate certain trademark-related claims and gave the franchisor home court advantage. Nagrampa v. Mailcoups, Inc., 469 F.3d 1257 (9th Cir. 2006). On July 12, 2007, Sen. Russ Feingold (D-WI) introduced Senate Bill 1782, known as the 'Arbitration Fairness Act of 2007,' a key provision of which would invalidate pre-dispute agreements to arbitrate franchise disputes.

Franchisors ' like the 'large and rapidly growing number of corporations' that the Feingold bill observes now require arbitration of disputes ' have in recent years flocked to arbitration to avoid their worst (perceived) nightmare: trial by jury. If 'jury trial avoidance' is the goal, recent judicial and legislative activity suggests that it may be time to consider alternatives to arbitration. The most direct and effective of these is the jury waiver.

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