South Carolina Business Law Blog

By Shaun Blake As last month’s decision by the Central District of California in the Toyota Hybrid Brake Class Action case demonstrates, simply raising a contractual right to arbitrate as an affirmative defense may not be enough to protect a party's right to compel arbitration.   In its Answer, Toyota raised as an affirmative defense an arbitration clause contained in certain dealer agreements excuted by the Class Plaintiffs (purchasers of hybrid vehicles with allegedly defective anti-lock braking systems).  Thereafter, in support of its subsequent Motion to Compel Arbitration, Toyota contended that it had preserved the right to compel arbitration as it awaited the United States Supreme Court’s decision in AT&T Mobility LLC v. Concepcion , 131 S. Ct. 1740 (2011). Toyota argued that, prior to Concepcion , any motion to compel arbitration would have been futile because class action waivers were generally unenforceable under California law. The Court disregarded Toyota’s argu

By Shaun Blake This post is the second in a series discussing the South Carolina Supreme Court’s decision in Herron in the context of recent United State Supreme Court decisions addressing arbitration. Click here for part one. Update: you may want to click here and listen while you read. Shady Grove In Shady Grove the Petitioner filed a putative class action in Federal District Court under CAFA to recover from Allstate interest on an insurance claim allowed under a New York law. The District Court dismissed the action after concluding it lacked jurisdiction because N.Y. Civ. Prac. Law Ann. §901(b) explicitly bars claimants from pursuing a class action to recover a "penalty" such as statutory interest. However, the U.S. Supreme Court ultimately reversed this decision in a plurality decision, holding that Rule 23 of the Federal Rules of Civil Procedure and §901(b) conflicted, and therefore Rule 23 allowed the Petitioner to pursue a federal class action despite