Class arbitration – Consumer Financial Services Watch

Absent But Not Forgotten: The Second Circuit Addresses the Impact of Arbitration on Absent Class Members

Nov 26 2019

By: Andrew C. Glass and Robert W. Sparkes, III

In their 2013 concurrence in Oxford Health Plans LLC v. Sutter, Justice Samuel Alito, joined by Justice Clarence Thomas, questioned whether absent class members “will be bound by the arbitrator’s ultimate resolution of th[e] dispute” in a class arbitration.[1] Justice Alito suggested that where an arbitration agreement provides “no reason to think that the absent class members ever agreed to class arbitration,” an affirmative answer was unlikely.[2] He posited that “an arbitrator’s erroneous interpretation of contracts that do not authorize class arbitration cannot bind someone who has not authorized the arbitrator to make that determination.”[3] Taken to its logical end, Justice Alito’s rationale would support an argument that class arbitrations should be limited to adjudicating only the claims of class members who affirmatively opt in to the class arbitration proceedings.

Expounding on Arbitrability: The Seventh Circuit Joins the Growing Ranks of Circuit Courts Finding that Courts Presumptively Decide the Availability of Class Arbitration

Nov 08 2018

By Andrew C. Glass, Robert W. Sparkes, III, Elma Delic, Roger L. Smerage

The U.S. Supreme Court has issued numerous decisions over the past decade addressing arbitration agreements. [1] In one of the Roberts Court’s first forays into the arbitration arena, the Court held that class or collective arbitration is only available where the parties have affirmatively agreed to resolve their disputes through such procedures. [2] But who determines whether the parties have so agreed — a court or an arbitrator?

No More Zombie Class Actions: Supreme Court Stops Class Members from Filing Successive Class Claims after Expiration of Limitations Period

Jun 14 2018

By: Andrew C. Glass, Roger L. Smerage, Elma Delic

The U.S. Supreme Court has ruled that a plaintiff cannot file a class action outside the applicable statute of limitations merely because an unsuccessful prior class action tolled the limitations period for individual claims.[1] In China Agritech v. Resh,[2] the Court held that its prior jurisprudence “does not permit the maintenance of a follow-on class action past expiration of the statute of limitations.”[3] Rather, that jurisprudence only tolls the statute of limitations for unnamed class members to intervene in the action “individually or file individual claims if the class fails.”[4] In reaching this conclusion, the Court recognized that “[t]he Federal Rules [of Civil Procedure] provide a range of mechanisms to aid courts in” overseeing complex litigation, such as where individual claims are added on after a denial of class certification.[5] But, critically, “[w]hat the Rules do not offer is a reason to permit plaintiffs to exhume failed class actions by filing new, untimely class claims.”[6]

Shedding Some Light: SCOTUS Grants Cert. in Lamps Plus to Answer Question on State-Law Contract Interpretation and Class Arbitration

May 11 2018

By Andrew C. Glass, Robert W. Sparkes, III, Roger L. Smerage, Elma Delic

In Stolt-Nielsen S.A. v. AnimalFeeds International Corp., [1] the U.S. Supreme Court held that “a party may not be compelled” under the Federal Arbitration Act (“FAA”) “to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” [2] The Stolt-Nielsen Court found that an agreement that is silent on the availability of class arbitration does not provide sufficient evidence that the parties intended to submit to class, as opposed to individual, arbitration. [3] The Court, however, left open the question of what level of specificity an agreement must contain to demonstrate the parties’ consent to submit a dispute to class arbitration. [4]

A First in the Second (Circuit): On Remand, District Court Breaks New Ground by Vacating Arbitrator’s Class Certification Award

Feb 01 2018

By Andrew C. Glass, Robert W. Sparkes, III, Roger L. Smerage, and Elma Delic

In what appears to be a first-of-its-kind ruling, the District Court for the Southern District of New York recently concluded that a federal district court has the authority to vacate an arbitrator’s class certification award based on the due process rights of absent class members. That this potentially ground-breaking decision arose from the long-standing litigation in Jock v. Sterling Jewelers, Inc. is no surprise. Over the course of a decade in Jock, the district court and the Second Circuit Court of Appeals have rendered multiple decisions addressing the proper role of a court in reviewing an arbitrator’s authority to determine whether parties have agreed to class arbitration. In the latest decision, the district court became the first court to apply Justice Alito’s concurrence in Oxford Health Plans LLC v. Sutter to strike down an arbitrator’s ruling. The Jock court determined that, absent an express class arbitration provision in each putative class member’s arbitration agreement, an arbitrator does not have the authority to bind absent class members to a class judgment—even if they signed the same form of arbitration agreement as the named plaintiffs. As discussed below, this novel decision could have significant implications.

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Tag:Class arbitration