By Hayes Hunt & Jeffrey Monhait
For the company, arbitration policies make perfect sense, as litigation is expensive for everyone involved. In particular, there has been a swell in consumer class action litigation over the last few years. As recently as March 26, a California federal court denied General Mills’ motion to dismiss three class actions alleging that General Mills deceptively advertised its Nature Valley products as “100% Natural” when they contained processed ingredients. See, e.g., Janney v. General Mills, No. 12-cv-03919, 2014 U.S. Dist. LEXIS 41452, at *2 (N.D. Cal. Mar. 26, 2014).
While rescinding the new policy, General Mills postured that arbitration was good for consumers as well: “We rarely have disputes with consumers – and arbitration would have simply streamlined how complaints are handled. Many companies do the same, and we felt it would be helpful.” See Foster, We’ve listened. Although these arbitration policies are typically one-sided in favor of the companies, the Supreme Court has expressed a clear preference for enforcing arbitration clauses, even where state contract law would render them void as unconscionable. See, e.g., AT&T Mobility v. Conception, 131 S.Ct. 1740 (2011). However, many trial courts, in
Notably, this particular example demonstrates the power of social media as a tool for navigating the tricky relationships between companies and consumers. Rather than resorting to protracted litigation to determine the enforceability of its new policy, General Mills responded to consumer complaints. The lesson for company and consumer is to find prompt and practical resolutions to disputes before insisting on litigation.