Recent Court Decisions Reinforce Limits on Forced Arbitration for Consumers

Two recent federal appeals court decisions confirm an important protection for consumers and class actions: arbitration clauses cannot be used by companies that never agreed to arbitrate with the consumer in the first place. In Olson v. FCA US, LLC (Ninth Circuit) and Jackson v. Protas, Spivok & Collins LLC (Fourth Circuit), the courts rejected efforts by non‑signatories to invoke arbitration clauses as a way to derail consumer class litigation.

In Olson, the Ninth Circuit held that an automobile manufacturer could not force arbitration based on a dealership lease it never signed. The consumer leased a Jeep from a dealership and later brought a class action against FCA, the manufacturer, alleging a safety defect. FCA relied on the lease’s arbitration clause—along with a provision stating that arbitrability issues should be decided by an arbitrator—to argue the case belonged in arbitration (at least with respect to the issue of whether FCA could enforce the arbitration provision). The court disagreed, emphasizing that arbitration depends on consent, and the lease covered only disputes between the consumer and the dealership, not third parties like FCA. Because the consumer never agreed to arbitrate with the manufacturer, FCA had no right to compel arbitration.

In Jackson, the Fourth Circuit reached a similar conclusion in the debt‑collection context. A borrower’s loan agreement required arbitration with the lender and entities that “serviced” the loan. After a debt buyer sued the borrower using a law firm, the borrower filed a class action against the debt buyer and the law firm, alleging unlawful collection of time‑barred debts. The law firm argued it qualified as a loan “servicer” and could therefore enforce the arbitration clause. The court rejected that claim, holding that servicing a loan means collecting payments or otherwise administering the loan—not litigating collection lawsuits. Because the law firm was not a party to the underlying agreement, it could not invoke its arbitration provision.

Both Olson and Jackson reinforce a clear and practical rule: arbitration clauses have limits, and courts will enforce them as written—no more, no less.  Companies cannot stretch arbitration provisions to cover manufacturers, law firms, or other third parties that never bargained for them. As both courts reiterated, arbitration is “a matter of consent,” and consumers should not be held to arbitrate claims where that consent is lacking.

The cases are Olson v. FCA US, LLC, 172 F.4th 1033 (9th Cir. 2026); Jackson v. Protas, Spivok & Collins LLC, No. 25-1971, 2026 U.S. App. LEXIS 14147 (4th Cir. May 18, 2026).