by Andrew Flake
With a 100th birthday coming up for the Federal Arbitration Act, 2025 promises to be eventful year in the arbitration world! But 2024 held its own, and having just crested the New Year, we should pause to look back at a handful of key developments and decisions for arbitration practitioners.
Smith v. Spirrizzi (U.S. 2024): In a concise whole-Court opinion, Justice Sotomayor wrote that district courts must stay, and not dismiss, cases determined to be arbitrable. The Court found the text of Section 3 of the FAA clear, bolstered by the structure and purpose of the statute.
Heckman v. Live Nation Ent., Inc.: A Ninth Circuit opinion determining that an arbitration clause in Ticketmaster’s online terms of use, relying upon procedures of a newly created ADR provider, New Era ADR, were unconscionable under California law and inconsistent with the California Arbitration Act. The Court pointed to a number of procedural aspects of the New Era rules, from case batching and bellwether selection, to the treatment of precedent, to discovery and injunctive relief, “asymmetric” in favor of respondents.
The case is interesting as a further development in the interplay between mass and class arbitration, the FAA, and preemption vel non of state law arbitration acts. New Era vigorously disputes many of the Ninth Circuit’s characterizations, and with rehearing recently denied, we can expect an effort to seek Supreme Court review. The full cite is Heckman v. Live Nation Ent., Inc., 120 F.4th 670 (9th Cir. 2024)
Generative AI in Arbitration: We continue to see useful experimentation, piloting, and use of generative AI by practitioners, neutrals, and arbitral institutions. From what I have seen thus far, it is from a process perspective — assisting parties with digesting and analyzing information, saving time in drafting (as with AAA-ICDR’s Clausebuilder AI), and powering more effective legal research — that the most progress has been made.
Innovation and Change Abroad: On the international side, we continue to see enhancement and support for the arbitration process at both the national and institutional levels. In the UK, a set of anticipated amendments to the 1996 Arbitration Act continue to move along. The European Union adopted its AI Regulation (No. 2024/1689), representing a first attempt to comprehensively regulate the marketing and use of AI systems, including the protection of fundamental rights. And notably for China’s arbitration practice, CIETAC adopted its first set of major rule revisions for nearly 10 years.
More to discuss, but these developments should carry conversation through at least your first few cocktail receptions and mixers of 2025. Happy New Year! ABF