Supreme Court Upholds Decision Approving Class Action Arbitration

Yesterday, in Oxford Health Plans LLC v. Sutter, the United States Supreme Court issued a unanimous opinion affirming the arbitrator's construction of an arbitration agreement that did not expressly address class actions. The parties had agreed to allow the arbitrator to decide this issue. The arbitrator ruled that broad language in the arbitration agreement addressing causes of action and remedies in arbitration permitted class arbitration. The Supreme Court, while not necessarily agreeing with the arbitrator's rationale, held that the arbitrator's decision under Section 10(a)(4) of the Federal Arbitration Act could not be disturbed unless the arbitrator "strayed from his delegated task of interpreting a contract" and imposed his own policy choice. "All we say is that convincing a court of an arbitrator's error—even his grave error—is not enough. So long as the arbitrator was 'arguably construing' the contract—which this one was—a court may not correct his mistakes