Mass Arbitrations in 2025: Key Legal Shifts Every Company Should Know

Mass arbitrations have evolved rapidly over the past few years, and 2025 marked a turning point for how companies can manage—and push back against—these proceedings. Courts, lawmakers, and arbitral forums are refining the rules of the road, offering companies new tools to mitigate cost pressure while still complying with arbitration obligations. This article breaks down the most important developments that shaped mass arbitrations in 2025 and what they mean for companies facing coordinated arbitration filings.

Key Takeaways:

• Mass Arbitration Provisions: Companies are increasingly adopting tailored mass arbitration provisions, and courts are clarifying what makes them enforceable (and what does not).
• Retroactivity of Clauses: Retroactive application of mass arbitration clauses may be permissible under certain conditions, particularly where consumers receive notice and consent.
• California Arbitration Penalties: California’s SB 707 regime has been softened by the California Supreme Court, reducing the automatic penalties tied to late arbitration fee payments.
• Litigation Against Plaintiffs’ Firms: Defendants are beginning to sue plaintiffs’ firms and arbitral providers over allegedly abusive or fraudulent mass arbitration tactics.
• Court Conflicts and Uncertainty: Ongoing conflicts between state and federal courts suggest further uncertainty—and future appellate guidance—lies ahead.

When mass arbitrations started to gain traction a few years ago, many companies were caught flat-footed. The Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion, upholding class-action waivers in lawsuits, forced plaintiffs’ firms to seek a new avenue to create leverage. And they found one: coordinated, large-scale arbitration filings, requiring defendants to cover arbitration fees for each case, including substantial fees at the outset before any merits determination occurred. The prospect of tens, if not hundreds of millions of dollars in arbitration fees presented a significant financial threat, forcing companies into a difficult choice: disavow their own arbitration agreements or face substantial costs from the very mechanism intended for their protection.

The legal landscape has evolved since the early days of mass arbitrations, which were typified by cases like Abernathy v. DoorDash and Uber Technologies Inc. v. American Arbitration Association, in which plaintiffs sought to compel arbitration and courts upheld massive filing fees. A framework for managing mass proceedings is emerging. Companies are revising their arbitration agreements, courts are defining the boundaries of permissible mass arbitration provisions, arbitral forums are adapting their rules, and California law has undergone significant change.

This article analyzes some significant recent developments in mass arbitrations in 2025.

Mass Arbitration Provisions Become Commonplace

The strategic leverage of mass arbitrations often stems not from their capacity to resolve disputes on the merits, but from the potential for imposing significant threshold procedural costs, regardless of the merits of the underlying claims, which can coerce large settlements. Consequently, companies have recognized that implementing their own large-scale dispute resolution procedures can help mitigate these risks and manage the process more effectively.

Mass arbitration procedures have been appearing in consumer contracts since at least 2022, and several early (and aggressive) iterations were struck down as unconscionable. However, three years of judicial review have helped establish the parameters for enforceability. Generally, mass arbitration provisions should avoid two things to withstand challenges: unreasonable delay and binding precedential effect on non-parties.

Unreasonable Delay. Courts have held that a mass arbitration provision, which only allows a few disputes to proceed at a time while holding the rest in procedural limbo indefinitely, is unconscionable because it can deter consumers from pursuing legitimate claims. This is especially true where the statute of limitations is not tolled or when claims are otherwise forfeited if not brought within a certain amount of time. Mass arbitration provisions where cases are exclusively resolved through unending rounds of bellwethering are at greater risk of being found unconscionable.¹ Mass arbitration provisions that resolve claims concurrently in batches, pair some limited bellwethering with subsequent global mediation of all claims, and provide tolling or opt-outs for individual claimants throughout the arbitration process generally pass muster.²

Precedential Effect. At least one court has been critical of mass arbitration provisions where bellwether cases are treated as binding precedent, particularly when the precedential effect extends to individuals who joined the mass arbitration later.³

Companies should consider these principles when drafting or revising their mass arbitration provisions to enhance enforceability.

Retroactive Application

Amending a consumer contract to add a mass arbitration provision might mitigate some concerns going forward, but could such provisions also apply to disputes that matured under previous contracts? So far, the answer seems to be “yes” under the right conditions.

Recent court decisions suggest that retroactive application is permissible under certain conditions. Under New York and California law, courts have held that retroactively applied mass arbitration provisions in consumer contracts can be valid and binding. However, this conclusion is conditioned upon consumers receiving notice of and consenting to the retroactive application. Where changes are implemented through a company’s unilateral modification of its terms, at least one court has found them inapplicable to claims that have already matured.⁴

California’s Plaintiff-Friendly Arbitration Law is Weakened

Plaintiffs’ firms frequently file mass arbitrations in California, largely due to the state’s enactment of SB 707 (Cal. Code Civ. Proc. § 1281.97–99) in 2019. This legislation makes a company’s failure to pay arbitration initiation or continuation fees within 30 days of the due date a material breach of the arbitration agreement and requires drafting parties to compensate employees or consumers for losses caused by missing the deadline. This puts immense pressure on companies to either resolve disputes quickly or forfeit their class action waivers.

Plaintiffs have argued that the 30-day deadline is an absolute and inflexible cutoff, regardless of justification or excusable neglect. Companies have argued that SB 707 is preempted by the Federal Arbitration Act because it invalidates arbitration provisions and is plainly contrary to the FAA’s policy of promoting arbitration. Predominantly, California state courts have sided with plaintiffs.

In August, the California Supreme Court adopted a middle-ground approach. In Hohenshelt v. Superior Court, 18 Cal. 5th 310 (2025), the Court held that while SB 707 is not preempted by the FAA, the 30-day deadline is not as unforgiving as plaintiffs have urged. Instead, a company’s failure to pay timely arbitral fees may be excused under general contract principles, so long as the company compensates non-breaching parties for any harm caused by the delay, and the failure was not “willful, fraudulent, or grossly negligent.” Id. at 341.

This ruling relieves some of the pressure that SB 707 placed on companies, but it also introduces new ambiguities. The decision leaves open the questions of what constitutes compensable “harm” to plaintiffs from a payment delay and how such harm should be calculated. It also remains unclear whether companies may delay payment while challenging the validity of the underlying claims.

Furthermore, the ruling creates a potential conflict with federal court decisions, such as Belyea v. Greensky, Inc., 637 F. Supp. 3d 745 (N.D. Cal. 2022), and Burgos v. Citibank, N.A., 745 F. Supp. 3d 959 (N.D. Cal. 2024), which have held SB 707 is preempted by the FAA. It remains to be seen whether the Ninth Circuit and federal courts will align with the California Supreme Court's ruling, even though preemption is not a matter of state law.

Companies Sue Plaintiffs’ Firms and Arbitral Forums

In April 2024, plaintiffs’ firm Consovoy McCarthy PLLC filed 19,541 concurrent arbitration demands against Sega of America in California, alleging violation of California’s Unruh Civil Rights Act prohibiting advertising using protected characteristics. Sega objected that many claims were duplicative and fraudulent on their face. Nonetheless, JAMS issued Sega a single invoice for $39 million.

Sega sued JAMS and Consovoy McCarthy in Los Angeles Superior Court and the Eastern District of Virginia respectively. Among other things, Sega accused JAMS of false advertising, unfair competition, and breaching its contract with Sega by charging millions in non-refundable initiation fees for services it knows it cannot perform. Sega accused Consovoy of false advertising and tortious interference with Sega’s contracts with both consumers and JAMS. The Virginia District Court has denied Consovoy’s motion to dismiss, and JAMS’s motion to dismiss is pending in LA Superior Court. 

Sega is not the only company to fight back against plaintiffs’ firms. In April 2024, skincare company L’Occitane sued Zimmerman Reed LLP in the Central District of California, ultimately securing a denial of petitioners’ motion to compel arbitration. In September 2024, sweepstakes company SCPS, LLC (a.k.a. Zula) similarly sued Kind Law for filing allegedly fraudulent arbitration demands, but the D.C. District Court dismissed the case for lack of personal jurisdiction because defendant law firms were not subject to the forum selection clause in the terms and conditions, and the claims against them were beyond the scope of the arbitration agreement. In February of this year, clothing retailer Janie & Jack sought to enjoin nearly 2,500 individuals from engaging in a mass arbitration, but voluntarily dismissed its case a few months later. 

It’s not yet clear how far such actions, or similar ones, will proceed, but forthcoming rulings will no doubt have major implications for the future of mass arbitrations.

¹ See MacClelland v. Cellco Partnership, 609 F. Supp. 3d 1024 (N.D. Cal. 2022); Pandolfi v. Aviagames, Inc., No. 24-5817, 2025 WL 2463742 (9th Cir. Aug. 27, 2025); Rios v. HRB Digital LLC, No. 25-cv-03530-EMC, 2025 WL 3003768 (N.D. Cal. Oct. 27, 2025).
² McGrath v. DoorDash, Inc., No. 19-cv-05279-EMC, 2020 WL 6526129 (N.D. Cal. Nov. 5, 2020); Kohler v. Whaleco, 757 F. Supp. 3d 1112 (S.D. Cal. 2024); Davis v. Experian Information Solutions, Inc., No. 25-c-04819-HSG, 2025 WL 2998157 (N.D. Cal. Oct. 24, 2025).
³ Heckman v. Live Nation Ent., Inc., 120 F. 4th 670 (9th Cir. 2024).
⁴ Heckman, 120 F. 4th at 682–83.

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