Tennessee Class Action Killer

Last week, a federal district court in Tennessee enforced arbitration agreements and compelled named plaintiffs in a class action to arbitrate their claims individually.  The plaintiffs were students at medical technician programs, and their enrollment contracts contained an arbitration clause.   The plaintiffs filed a class action complaint in state court, alleging fraud and breach of contract claims regarding accreditation, job prospects, and graduates’ preparedness to pass certification exams.  The defendant educational institution removed the case to federal court and asked the court to compel arbitration (Note the strategy; there is a perception that federal courts may be more likely to enforce arbitration agreements than state courts.)  The federal court then compelled individual arbitration and in effect killed the plaintiff’s ability to pursue a class action.  See Asbell v. Education Affiliates, Inc., No. 3:12–cv–00579 (M.D. Tenn. Apr. 25, 2013).