49,986 Petitioners filed for individual arbitrations against two Samsung Entities (Samsung Electronics America, Inc. and Samsung Electronics Co., Ltd) claiming violation of Illinois’ Biometric Information Privacy Act.
The arbitration agreement between the parties forbid collective action arbitration and required arbitration before the American Arbitration Association (“AAA”).
AAA invoiced Petitioners their portion of the fee which they paid.
AAA invoice Samsung $ 4,125,000.00 for it’s initial administration fee which Samsung refused to pay.
Upon Samsung’s refusal to pay, AAA administratively closed the case.
Petitioners then filed in federal court to compel arbitration.
Judge Leinenweber dismissed 14,335 Petitioners who failed to allege proper venue in the Northern District of Illinois where the case was pending but otherwise granted Petitioners’ Motion to Compel Arbitration specifically ordering Samsung to pay its arbitration fee.
The court observed that arbitration should be compelled if three elements are present: (1) an enforceable written agreement to arbitrate, (2) the dispute falls within the scope of the arbitration agreement , and (3) a refusal to arbitrate,
The court found there was a valid agreement to arbitrate and the dispute fell within the scope of the arbitration agreement.
Regarding the third element, Samsung asserted it declined to pay the arbitral fees but stood ready to arbitrate and that claimants waived arbitration by not paying Samsung’s fee (which is a possibility under AAA rules). The court found there was no waiver.
Samsung also argued the mass filings violated the arbitration agreement’s collective action waiver. The Court found the arbitration agreement required this issue be decided by the arbitrator.
Accordingly, the Court granted the Motion to Compel Arbitration, ordered the parties to arbitrate, and specifically ordered Samsung to pay arbitration fees to AAA.
Paula Wallrich et al v Samsung Electronics America, Inc. and Samsung Electronics Co., Ltd, No. 22 C 5506, United States District Court, N.D. Illinois, Eastern Division, September 12, 2023.
On January 15, 2024 the American Arbitration Association (AAA) issued amended Mass Arbitration Supplementary Rules and new fee schedules for mass consumer cases and separately for mass employment cases. These rules streamline the administration of cases involving the same or related parties for disputes.
The Rules encourage the appointment of a special master to oversee common procedural issues such as discovery, choice of law, and statute of limitations. The Rules also address the following issues:
agreed upon scheduling order
hearings by a single arbitrator,
hearings on documents rather than in-person, telephone or video conference,
limits on briefs, motions, and discovery,
testimony by affidavit or recorded deposition,
and form of the award.
On February 15, 2024 in what the court described as a "related matter" but different fact situation, a District Judge ordered Samsung to pay $311,000 to cover its share of arbitration filing fees for 806 individual privacy claims. Hoeg et al., v Samsung Electronics of America, Inc., 23-CV-1951 (N.D. Ill. February 15, 2024)
Comentários