Supreme Court Will Now Hear Two Appeals Concerning Class Arbitration

On Friday, December 7, 2012, the Supreme Court granted certiorari in Oxford Health Plans LLC v. John Ivan Sutter MD, No. 12-135 to address whether the parties to an arbitration agreement authorize class arbitration when the agreement provides that “any dispute” will be submitted to arbitration. The Third Circuit’s decision in Oxford, which upheld an arbitrator’s decision to proceed with class arbitration based on such an agreement, presents a potential conflict with the Supreme Court’s decision in Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010), which held that class arbitration cannot be imposed on parties that have not agreed to it. The Supreme Court has been extremely interested in the topic of class action waivers and arbitration agreements recently. The Court’s decision to hear Oxford comes less than a month after it also granted certiorari in American Express Company vs. Italian Colors Restaurant, No. 12-133 (“AMEX”) to address the following question: “Whether the Federal Arbitration Act permits courts, invoking the ‘federal substantive law of arbitrability,’ to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal-law claim.” (Previously blogged at Supreme Court to Address Enforceability of Arbitration Agreements and Class Action Waivers Yet Again).

The Supreme Court has also taken on cases involving class action waivers and arbitration agreements in each of the last three years. See, e.g., CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012) (holding that an arbitration agreement could be enforced in a case involving claims under the federal Credit Repair Organizations Act (CROA), because the CROA is silent on whether arbitration is permissible); AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (holding that a class action waiver in an arbitration agreement was enforceable because the FAA preempts state law); Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010) (holding that class arbitration cannot be imposed on parties that have not agreed to it). The Court’s decision to now hear AMEX and Oxford at the same time indicates that the Supreme Court may intend to settle important questions about class action waivers and arbitration agreements once and for all, in decisions that may dramatically change the landscape of antitrust and other kinds of class actions.

 

Topics:  Appeals, Arbitration Agreements, Class Action Arbitration Waivers, Federal Arbitration Act, Preemption

Published In: Alternative Dispute Resolution (ADR) Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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