The U.S. Supreme Court ruled in favor of Petitioners, including Stolt-Nielsen SA, last month in a closely-watched antitrust case. The case dealt with an important issue involving arbitration. Many observers believe this ruling could have broad effects on arbitration, but I’m not too sure about its actual impact on consumers. The Justices ruled that imposing class arbitration on parties that hadn’t agreed to class arbitration conflicts with the Federal Arbitration Act. The sole issue was whether class members, who had not consented to be bound by arbitration, were bound by an arbitration clause in a contract.
In a 5-3 decision delivered by Justice Samuel Alito, the High Court reversed a panel decision by the U.S. Court of Appeals for the Second Circuit, which had agreed with a ruling by the arbitrators who were involved. This was a case involving two businesses as parties. Since the case didn’t involve a consumer dispute, it will be interesting to see how the Justices will deal with consumers if the same fact situation comes to the High Court. If the ruling in a dispute between a consumer and a business goes off on whether the consumer actually agreed to be bound by arbitration, the arbitration request would go out the window I would think.
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