A commenter on my post about the Massachusetts Supreme Judicial Court's decision in Feeney asked for an explanation in plain English. Here goes.
The court decided that Massachusetts courts will not enforce an arbitration clause that bans class actions when a claim really cannot be pursued without a class action.
For example, if the claim is legally or factually complicated, each individual's damages are so small that it's not economical to try to pursue the claim individually, and the arbitration agreement doesn't allow successful plaintiffs to get attorneys' fees or provide any other incentives that will make individual arbitration a practical way to proceed, then the only way to try to pursue that claim is to combine each small individual claim into a larger class action. In those kinds of cases, an arbitration agreement that says you can't have a class action won't be enforced by the Massachusetts courts.
However, the court in Feeney also decided that it can't strike down a class action ban just because it thinks that it is bad policy to ban class actions or that class actions have practical advantages over individual arbitration. Only when a class action ban effectively means a plaintiff cannot assert a claim is it invalid.
The court decided that the claims in the Feeney case, which were that Dell was illegally collecting small amounts of tax when buyers bought service contracts, could not really be made without a class action, so the class action ban in Dell's arbitration agreement could not be enforced in that case. But in the companion case, Machado, the court decided that the individual claims were big enough that it was possible to pursue the claims without a class action.
The U.S. Supreme Court is considering similar issues in the American Express case, where a decision is expected in the next 10 days. If the Supreme Court rejects the kind of reasoning employed in Feeney, Feeney could become a dead letter. If not, Feeney may be extremely important.
