The U.S. Supreme Court has affirmed a Third Circuit decision upholding an arbitrators’ decision that a case could proceed as a class action in arbitration. In reaching its decision, the Court stressed the very heavy burden that rests on parties who would challenge arbitrators’ decisions. Justice Kagan, writing for the Court, held that the issue was not whether the Court thought the arbitrator was right on the merits, but whether the arbitrator properly interpreted the parties’ contract. The Court distinguished the Stolt-Nielsen case, on the grounds that the plaintiffs in that case had stipulated that there was no agreement on class arbitration.
Corporate America was seeking a double standard in the case before the high court, where arbitrators’ decisions would almost never be reviewable. That is except when an arbitrator would allow a case to proceed as a class action. Corporations, as has been most evident, dislike class actions with a passion. The Supreme Court unanimously rejected this unprincipled concept, holding that the normal rules about judicial review of arbitration apply to decisions about class actions in arbitration.
This is an unusual win for Plaintiffs in a case involving arbitration in the U.S. Supreme Court. The high court has been very much anti-consumer in most of its decisions with the forced arbitration issue. The lawyers who worked on the case, Eric Katz of Roseland, New Jersey; Scott Nelson of the Public Citizen Litigation Group and Eric Schnapper of the University of Washington School of Law, did a very good job in this case.
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