It has become increasingly difficult for a party to avoid enforcement of a contractual arbitration provision and this summer the United States Supreme Court (“Supreme Court”) swept away one of the few remaining constraints, holding in American Express Co. v. Italian Colors Restaurant, 133 S.Ct. 2304, 2312 (2013) (“Amex”), that even where the terms of an arbitration provision make enforcement of a substantive right wholly impractical, the arbitration clause will be enforced. The ever-tightening noose of arbitration clauses is also evident in recent decisions of the Massachusetts Supreme Judicial Court (“SJC”). For example, in one case, Feeney v Dell, Inc. 454 Mass. 192 (2009) (“Feeney I”), the SJC was forced to follow the increasingly broad application of the Federal Arbitration Act (“FAA”), 9 U.S.C., §1 et seq., by the Supreme Court, even to the point where a party is, for all practical purposes, deprived of any effective means to enforce its substantive rights.

The SJC issued two other decisions in the Feeney matter, a dispute relating to the use of class action claims in arbitration proceedings, after Feeney I. The entire line of SJC decisions in the Feeney trilogy is illustrative of the ever-narrowing means of avoiding enforcement of an arbitration clause. Feeney I was a consumer class action case brought in state court relating to Dell’s allegedly improper collection of sales tax on computer services contracts for which no sales tax was actually due. The service contracts had a clause compelling arbitration and prohibiting the assertion of class claims in the arbitration proceeding. In 2009, in Feeney I, the SJC declined to enforce the class action waiver as violative of the strong Massachusetts public policy in favor of class actions for small value claims under G.L. c. 93A. In June 2013, the SJC revisited the case in Feeney v Dell, Inc. (“Feeney II”), 465 Mass. 470, 472 (June 12, 2013); in light of intervening Supreme Court precedent in AT & T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011). The SJC held in Feeney II that Concepcion barred a court “from invalidating an arbitration agreement that includes a class action waiver where a plaintiff can demonstrate that he or she effectively cannot pursue a claim against [a] defendant in individual arbitration according to the terms of the agreement, thus rendering his or her claim nonremediable.”

However, eight days after the SJC’s decision in Feeney II, the Supreme Court decided the Amex case in which it specifically rejected the SJC’s Feeney II analysis. As the SJC, much to its apparent chagrin, noted in Feeney v Dell, Inc. (“Feeney III”) (rescript), 466 Mass. 1001 (Aug. 1, 2013), in Amex the Supreme Court specifically found that “the FAA’s command to enforce arbitration agreements trumps any interest in ensuring the prosecution of low-value claims.” Thus, as long as an arbitration agreement does not expressly “forbid[ ] the assertion of certain [Federal] statutory rights” or “perhaps” require the payment of “filing and administrative fees attached to arbitration that are so high as to make access to the forum impracticable,” a plaintiff is not deprived of his or her right to pursue statutory remedies and the arbitration provision must be enforced. Id.

While the analysis of the Amex and Feeney cases was limited to the class action issue, the rationale behind it – that making the assertion of substantive rights wholly impractical will not bar the enforcement of an arbitration clause so long as the assertion of the right is not actually prohibited and remains theoretically possible – is likely to be applied more broadly over time.