Mass arbitrations—where a plaintiffs’ firm brings dozens, hundreds, or thousands of identical claims against a business—is a mechanism increasingly relied upon by the plaintiffs’ bar in the past few years. This is because mass arbitrations enable a plaintiffs’ firm to create settlement pressure by leveraging unavoidable arbitration fees borne by a business regardless of the merits of the claims filed. Further powered by litigation funding, plaintiffs’ firms have used the mass arbitration device to bring vexatious claims and escape review of the merits or any downside risk.
2025 saw notable rulings at the appellate and trial court level addressing aspects of the mass arbitration tactic. Despite these cases, this area of law remains undeveloped and assures mass arbitrations will continue to be hotly contested into 2026. Not all is lost, however. There is a defensive toolkit for a company facing as a mass arbitration which SPB’s Data Disputes team is well-versed in, having defended mass arbitrations before the main arbitral bodies—American Arbitration Association (the “AAA”) and JAMS—and a track record of success in both forums.
This post will discuss (I) a brief history of mass arbitrations and (II) the latest data on the mass arbitration threat. While there were numerous decisions implicating mass arbitration at the trial court and appellate level in 2025, we will cover the highlights of (III) a federal circuit decision undercutting the threat of mass arbitration fees entirely and (IV) decisions opining on permissible procedures to minimize the amount of mass arbitration fees. This post also (V) summarizes recent changes made by the AAA to its consumer arbitration rules. Read on to learn more.
I. Post-COVID Proliferation of Mass Arbitration as Scheme of Plaintiffs’ Bar
For several decades, it has been common practice for businesses to include arbitration provisions with class action waivers in their consumer and employment agreements. This arrangement provided assurance that the business would not face the abuses of the class action procedure: a plaintiffs’ lawyer finding one plaintiff and threatening massive liability without individualized determinations on the merits. Instead, bolstered by the Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion, 563 U.S. 333, which struck down a California law prohibiting class-action waivers in consumer contracts, a business could compel any disputes to be heard on a 1-on-1 basis in front of an arbitral body.
The most utilized arbitral bodies—AAA and JAMS—use a similar fee structure for consumer and employment cases. Critically, under the rules of both organizations, a consumer or employee filing a case does not pay all of the initial filing fee: the business must bear the bulk of the filing fee, which may be a couple thousand dollars per case. This filing fee is incurred before any arbitrator decides the merits of the case. Arbitrator appointments and other case administration beyond filing also incur per case fees.
Without the benefit of the class action procedure, plaintiffs’ lawyers since Concepcion began to use another means to create outsized liability threat: filing hundreds or thousands of arbitration claims against the same business. In these “mass arbitrations,” the business may be on the hook for millions of dollars of arbitration filing fees regardless of the merits of the claims being asserted. Moreover, the plaintiffs’ lawyer would point to the arbitration provision drafted by the business as prohibiting a class action or other consolidation method that could limit the number of cases being litigated and further incurring fees.
This mass arbitration technique first appeared in 2018 and 2019 in the context of wage-and-hour claims, where plaintiffs’ firms could recruit employees and contractors of companies via online advertising and enrollment. Post-COVID, mass arbitrations have expanded to other claims, in particular many consumer privacy and data breach statutes such as the Video Privacy Protection Act (“VPPA”), California Invasion of Privacy Act (“CIPA”), or Illinois’ Biometric Information Privacy Act (“BIPA”). [As an aside, SPB’s Data Disputes practice has a track record of success litigating all these theories.] These federal and state privacy laws are particularly appealing to plaintiffs’ lawyers for mass arbitrations because they often (i) have a private right of action, (ii) provide for statutory liquidated damages without the need to prove actual damages, and (iii) may be plausibly asserted against common consumer-business interactions—like website visits, mobile app downloads, or data processing—that are identical for thousands of recruitable claimants.
In the face of these mass arbitrations, JAMS and the AAA have started to issue rules specific to mass arbitrations, defined to mean arbitrations over a certain number of demands against one respondence filed by the same law firm or coordinating law firms. (75 demands for JAMS, 25 for the AAA.) However, the nature of the underlying fee structure has meant that plaintiffs’ firms can still generate massive leverage against businesses by filing a mass arbitration, regardless of the merits.
II. By the Numbers: New Data in 2025 From the AAA on Mass Arbitration
In 2025, the AAA released useful statistics regarding how mass arbitration is being used and the scale of the mass arbitration threat. There were 92 mass arbitrations submitted to the AAA in 2024, made up of around 280,000 individual claims. Of the mass arbitration cases that closed in 2024, only 1% of consumer cases and 2% of employment cases ended in awards. The majority of both consumer (59%) and employment (77%) cases ended in settlement, although 30% of consumer cases were outright dismissed. Of the cases that did proceed to an award in favor of consumers, the average award in consumer arbitrations was $10,131.
The AAA has also released updated data through Q2 of 2025 on closed consumer and employment mass arbitrations. In just the first six months of 2025, the AAA closed 26 mass arbitrations with at least 37,648 total claimants. These mass arbitrations were brought against businesses in a variety of sectors—including consumer goods, entertainment, and financial services. Zero of the 26 mass arbitrations were resolved with a dismissal on the merits; instead, these mass arbitrations were settled, withdrawn, or “administratively” dismissed (potentially for non-payment of mass arbitration fees). Of course, this does not present complete AAA numbers for the full calendar year, nor does it include mass arbitrations filed with other arbitral bodies such as JAMS. The total tallies for 2025 on all fronts are much higher than this partial snapshot.
This limited pool of publicly available data shows that plaintiffs’ firms have no qualms bringing arbitrations on behalf of hundreds or thousands of claimants without the anticipated prospect of litigating the arbitrations to completion. As the next section demonstrates, however, plaintiffs’ firms may face difficulty in 2026 with compelling businesses to participate in mass arbitration due to the development of case law which has not always favored plaintiffs.
III. The Second Circuit Undercut a Plaintiffs’ Tactic of Using Large Arbitration Fees to Induce Settlement
As covered more fully on Privacy World separately, this September the United States Court of Appeals for the Second Circuit struck a blow against the plaintiffs’ bar threat of mass arbitration fees. In Frazier v. X Corp., the Second Circuit held that the petitioners could use the Federal Arbitration Act (“FAA”) to compel arbitration on the basis that a business failed to pay arbitration fees.
In that case, the district court ordered Twitter (now known as X Corp.) to pay over ten million dollars in a mass employment arbitration. Reversing, the Second Circuit reasoned that hat the payment of fees is merely a procedural issue that must be decided and enforced by an arbitration panel and not a “failure, neglect, or refusal” to arbitrate necessary to grant a petition under Section 4 of the FAA. Instead, under the FAA, procedural issues beyond arbitrability, including the decision of which party must pay arbitration fees, are for the arbitrator, not the court, to decide. In reaching this decision, the Second Circuit joined a growing number of other federal circuit courts— the Third, Fifth, Ninth, and Eleventh—with similar holdings.
The Second Circuit’s decision—which is persuasive authority for federal courts outside the Second Circuit—supplies businesses with additional strategic options when confronted with large upfront fees from a mass arbitration.
IV. Courts Weigh in on Various Procedures Designed to Minimize Mass Arbitration Risk
Even so, companies should stay vigilant and carefully review the language in their existing arbitration agreements to make sure their potential exposure to mass arbitrations in the first place are minimized, to the extent possible. A few decisions in 2025 addressed the techniques of case consolidation and bellwether proceedings.
A. The Ninth Circuit Approved of JAMS’s Consolidation of a Mass Arbitration.
In a case with broad implications for mass arbitration, the Ninth Circuit in 2025 also approved an arbitral body’s use of a technique that greatly reduced the fees associated with a mass arbitration filing.
In that case, which was filed against an entertainment company, over 100,000 identical arbitration claims were brought by a single law firm in a mass arbitration under the Video Privacy Protection Act and a similar California law. The potential filing fees alone amounted to over $12 million. The defendant’s terms of service specified that all claims would be governed by JAMS arbitration rules and that class action claims were not allowed.
JAMS, applying its own rules, decided to consolidate the claims into one arbitration. The claimants, however, delayed the proceedings by rejecting numerous potential arbitrators and eventually one of the claimants filed a motion to compel individual arbitration. The Ninth Circuit affirmed a lower court’s decision denying this motion.
First, the court found that defendant had not refused or failed to arbitrate in a way that allowed a motion to compel under the FAA. The court reasoned that it was JAMS, not the defendant, that had consolidated the claims and that the defendant had been willing to go along with the arbitration throughout the process. The court further found that the terms of service, in barring class action claims, did not necessarily bar consolidation as well. It pointed out that class arbitration is different than consolidated arbitration, and that the terms had not expressly said that only individual arbitration was allowed. The court went on to find that repeatedly disqualifying potential arbitrators showed that the true motive of the plaintiff was to use the potentially massive procedural fees as a way “of forcing defendant to capitulate to a settlement.”
Second, the court rejected the argument that the consolidation constituted a gateway question of arbitrability that needed to be decided by a court. The court found that the FAA only requires courts to address gateway issues when the scope or validity of an arbitration agreement is at stake. Since both parties agreed that their dispute was covered by the agreement, the court was not required to second guess JAMS on the consolidation question.
Finally, the court refused to adopt the “novel” approach of using unconscionability doctrine to compel arbitration under an agreement that the plaintiff argued was unconscionable. To do so, the court reasoned, would “contravenes the ‘fundamental principle that arbitration is a matter of contract.”’
This decision shows that businesses may engage in mass arbitration in a way that does not incur outsized and unsupported upfront fees. And importantly, it also shows that courts can—and should more often—recognize that plaintiffs are using mass arbitration to force settlements, rather than any commitment to have claims decided on their merits.
B. Courts Consider Whether the Timing of Bellwether Procedures Can Be Unconscionable
One strategy for minimizing arbitration fees in the event of a mass arbitration is the use of a “bellwether” procedure. Under a bellwether procedure, once a certain threshold of claims is reached, all claimants are stayed from filing cases and incurring the associated arbitration fees. Instead, a subset of claimants is selected to proceed to the merits, and the results of these bellwether proceedings are used to inform negotiations over all claimants.
Plaintiffs’ lawyers have asserted that bellwether provisions are unenforceable on the theory that any individual claimant may have to wait to have the claimant’s claim resolved until the selected bellwethers are completed. Several courts in 2025 expressly rejected such arguments. For example, a judge in the Eastern District of California held that a bellwether clause was not subjectively unconscionable, particularly where the claimant could have opted out of arbitration upon the determination that a mass arbitration was filed. See Burkhardt v. Extra Space Mgmt., Inc., No. 2:25-cv-00547-DJC-CKD, 2025 WL 2172287, at *6 (E.D. Cal. July 31, 2025). Another judge also rejected a plaintiff’s unconscionability argument, emphasizing that the bellwether provision included a tolling for all statute of limitations. See Tercero v. Sacramento Logistics LLC, No. 2:24-cv-00953-DC-JDP, 2025 WL 43125, at *9 (E.D. Cal. Jan. 7, 2025), vacated for lack of subject matter jurisdiction, 2025 WL 2811078 (E.D. Cal. Oct. 3, 2025).
Still, a couple other courts in 2025 have stated that certain features in specific bellwether provisions may be unconscionable. In Rios v. HRB Digital LLC, No. 25-CV-03530-EMC, 2025 WL 3003768 (N.D. Cal. Oct. 27, 2025), the Court noted that the particular bellwether provision “provide[d] no mechanism for relief when unreasonable delays occur.” Id. at *9. These handful of decisions underscores that bellwether provisions should be carefully crafted by legal teams familiar with how mass arbitration can and should work.
V. May 2025: The AAA Made Significant Changes to its Consumer Arbitration Rules
As covered previously here on Privacy World, in 2024 both the AAA and JAMS issued new mass arbitration rules. Rule revisions continued this year, as in the spring the AAA released major revisions to its Employment/Workplace Arbitration Rules and its Consumer Arbitration Rules. These rules became effective on May 1, 2025 and businesses should be aware of them before deciding to use AAA as an arbitration provider. [Note: SPB’s Data Disputes team is very familiar with the differences in protocols between various arbitration providers, particularly in the mass arbitration context—and well versed in advising clients on the practical differences in arbitrating in these forums]. Changes announced by AAA earlier this year are outlined below:
- Virtual hearings are now the default.
Both the consumer and employment rules now say that hearings are to be held virtually. See AAA Consumer Arb. R. and Mediation Procs., R-22 (2025); AAA Employment/Workplace Arb. R. and Mediation Procs., R-23 (2025). The only exceptions are when the parties both agree or the arbitrator orders otherwise on the application of one of the parties. Id. This was “in response to the shift to remote proceedings during the pandemic,” and is different than the previous rules which made no mention of virtual hearings. The AAA’s 2024–2025 Arbitration Rule Changes: A Breakdown, AAA (Apr. 30, 2025), https://www.adr.org/news-and-insights/the-aaa-s-2024-2025-arbitration-rule-changes-a-breakdown/; see generally AAA Employment Arb. R. and Mediation Procs. (2009); AAA Consumer Arb. R. (2014).
- Arbitrators have expanded authority.
Under both sets of rules, AAA arbitrators are now able to sanction parties for failing to comply with their obligations “under [the] rules or with an order of the arbitrator.” AAA Consumer Arb. R. and Mediation Procs., R-57 (2025); AAA Employment/Workplace Arb. R. and Mediation Procs., R-57 (2025). Arbitrators under the consumer rules also now have the ability to order “depositions, interrogatories [and] document production.” AAA Consumer Arb. R. and Mediation Procs., R-20 (2025). While similar language already existed in the previous employment rules, see AAA Employment Arb. R. and Mediation Procs., R-9 (2009), the previous consumer rules made no specific reference to discovery but only to the potential “exchange of information among the parties.” AAA Consumer Arb. R., R-22 (2014).
- There is a new standard for dispositive motions.
The previous employment and consumer rules allowed for “the filing of a dispositive motion if the arbitrator determines that the moving party has shown substantial cause that the motion is likely to succeed and dispose of or narrow the issues in the case.” AAA Consumer Arb. R., R-33 (2014); AAA Employment Arb. R. and Mediation Procs., R-27 (2009). The new rules, however, require the arbitrator to also consider “the time and cost associated with the briefing of a dispositive motion in deciding whether to allow” one. AAA Consumer Arb. R. and Mediation Procs., R-31 (2025); AAA Employment/Workplace Arb. R. and Mediation Procs., R-32 (2025).
- Appeals are now expressly provided for in the consumer rules.
The new consumer rules allow for an AAA administered appeal of a decision “if [the process] complies with the Consumer Due Process Protocol and the filing fees and arbitrator compensation in connection with the appellate arbitration process are borne and allocated in accordance with the Consumer Arbitration Fee Schedule.” AAA Consumer Arb. R. and Mediation Procs., R-58 (2025). The old consumer rules and current employment rules make no mention of appeals. See generally AAA Consumer Arb. R. (2014); AAA Employment/Workplace Arb. R. and Mediation Procs. (2025). This change could potentially lead to a more time-consuming and fee-intensive process for businesses who do not choose to opt out.
- The consumer rules have expanded the potential for desk arbitration.
The new rules provide that consumer claims below $25,000 “shall be resolved” through documents-only arbitration, “unless [1] a party requests a hearing and [2] the arbitrator decides that a hearing is necessary.” AAA Consumer Arb. R. and Mediation Procs., D-1 (2025). The previous rules allowed such hearings to be avoided if either of the above was true. AAA Consumer Arb. R., D-1 (2014).
- Claims can now be administratively consolidated.
The new rules give the AAA discretion “to administer multiple claims filed by the same party arising out of the same contract as a single case,” and “to require that multiple claims filed by the same party arising out of separate contracts be filed and administered as individual cases.” AAA Consumer Arb. R. and Mediation Procs., R-4 (2025); AAA Employment/Workplace Arb. R. and Mediation Procs., R-4 (2025). The AAA makes the initial determination on these questions which is then “subject to the final determination of an arbitrator.” Id. These changes should make consolidated arbitration more available and allow businesses to avoid some of the high filling fees that come with a large number of individual claims.
- Limited Subset of awards will now be made public.
The new rules allow the AAA to “choose to publish an award rendered under these Rules” with the caveat that “the names of the parties and witnesses will be redacted.” AAA Consumer Arb. R. and Mediation Procs., R-42 (2025); AAA Employment/Workplace Arb. R. and Mediation Procs., R-42 (2025).
VI. Conclusion
Mass arbitration is an abusive tactic commonly utilized by the plaintiffs’ bar to use the mechanisms of arbitration extract settlements for meritless claims. From the numbers, mass arbitration filings show no sign of slowing down in 2026.