In October 2024, the Ninth Circuit decided Heckman v. Live Nation Entertainment, Inc., 120 F. 4th 670 (9th Cir. 2024). We wrote here about the Court’s decision to invalidate Ticketmaster’s arbitration agreement. The Ninth Circuit found that Ticketmaster’s mass arbitration protocols were so extreme that they rendered the entire arbitration provision unenforceable. For example, Ticketmaster’s procedures provided that precedent from three bellwether cases would be binding on all claimants—despite those claimants’ inability to participate in the bellwether proceedings.

The question we were left with was, can arbitration provisions have any mass arbitration protocols post-Heckman? We predicted that Heckman would be interpreted narrowly, leaving unscathed less extreme mass arbitration protocols. Early signs were promising. District courts have read the Heckman decision narrowly—see our post here.

Just recently, the Ninth Circuit signaled that it also views Heckman as being a narrow decision, and that it will enforce a properly crafted mass arbitration protocol. The decision, Jones v. Starz Entertainment, LLC, No. 24-1645 (9th Cir. Feb. 28, 2025), is a positive sign for companies that have added, or plan to add, a mass arbitration protocol to their arbitration agreement.

Background

A single law firm initiated 7,300 arbitration demands against Starz Entertainment, a video streaming platform, alleging violations of the Video Privacy Protection Act (“VPPA”) and California’s analogous state statute. JAMS ordered consolidation of these filings to be presided over by a single arbitrator, in accordance with the mass arbitration protocol in Starz’s Terms of Use and JAMS’s procedures. Had JAMS not consolidated the demands, Starz would have faced $12,775,000 in initial filing fees. The claimants—whose obvious strategy was to use these fees as leverage in settlement negotiations—were displeased. (We see this tactic often. Remarkably, the Ninth Circuit called out their “true motivation” of trying to “rack[] up procedural costs” instead of seeking “redress on the merits.”) For reasons that are unclear, the law firm, on behalf of the majority of its clients, repeatedly sought to disqualify the arbitrators assigned by JAMS. 

One claimant (Jones), who was not one of the “objectors,” apparently became frustrated with the process and filed a petition in federal court to compel individual, non-consolidated arbitration of her claims against Starz. According to Jones, the mass consolidation of claims created an “endless procedural loop in which any one of the thousands of claimants could exercise the statutory right to disqualify the appointed arbitrator as to the entire proceeding, thus depriving her of the individual arbitration allegedly mandated by [Starz’s] Terms.”

The district court denied Jones’s petition to compel non-consolidated arbitration of her claim, and the Ninth Circuit affirmed, holding that Starz’s arbitration agreement contemplated consolidation and there was nothing inherently unconscionable about consolidation. Per the Ninth Circuit, “[t]he reality is that she agreed to an arbitration that permits consolidation and got what she agreed to.”

The Decision

The basis for affirming the denial of Jones’s petition was that Jones was not an aggrieved party under the Federal Arbitration Act (“FAA”) who could bring a petition to compel. Under the FAA, only a party “aggrieved by the alleged failure, neglect, or refusal of another to arbitrate” may petition a federal district court to compel arbitration. But Starz never failed, neglected, or refused to arbitrate; rather, the Ninth Circuit concluded, “the record reflects that Starz has engaged in the arbitration process at every step of the way.”

Jones nonetheless argued that because Starz urged JAMS to consolidate the demands, Starz had refused to participate in individual arbitrations. The Ninth Circuit rejected this argument for two reasons. First, JAMS, not Starz, decided to consolidate. Second, and more fundamentally, Starz’s arbitration agreement did not require individual arbitration. Rather, it incorporated the JAMS Rules, including the Rule that authorizes JAMS to consolidate filings that share common issues of fact or law. 

The Ninth Circuit reasoned that this type of consolidation implicates none of the concerns raised by Ticketmaster’s mass arbitration protocols in Heckman. Ticketmaster’s protocol compiled similar cases into a batch, and provided that three bellwether cases would serve as precedents for all cases in the same batch. As the Jones Court explained: “Claimants in non-bellwether cases had no right to participate in the bellwether cases, no access to the bellwether decision until it was invoked against them, no notice of the bellwether cases, no opportunity to be heard, and no right to opt out of the batch.” JAMS’s consolidation did not share any of these defects.

Moreover, “from a practical standpoint,” the Ninth Circuit was not convinced that Jones was aggrieved at all. To the extent she was frustrated with the arbitrator appointment process, there were avenues of relief available to her. For example, she could petition a California Superior Court to appoint an arbitrator, as JAMS had suggested she do. “The California Code of Civil Procedure grants a party a single peremptory challenge against a court-appointed arbitrator and requires any subsequent disqualification to be based upon a showing of cause.” The Ninth Circuit remarked that the fact that Jones did not pursue this route casts “serious doubt over the true motivation underlying the mass-arbitration tactic deployed,” which appeared to be geared more toward racking up procedural costs to use as settlement leverage.

Conclusion

The takeaway? It’s fairly clear that the Ninth Circuit has started to differentiate between types of mass arbitration protocols, and views protocols that merely consolidate claims for efficiency (such as a batching protocol) more favorable than protocols that resemble a representative proceeding (such as certain bellwether protocols). It’s therefore critical that a company’s mass arbitration terms be carefully crafted to avoid enforceability concerns.