Third Circuit Holds That Courts – Not Arbitrators – Must Determine Whether Arbitration Clauses Permit Class Action Arbitration

The United States Court of Appeals for the Third Circuit, in a precedential opinion, recently held that courts, not arbitrators, must decide whether a class action dispute should be governed by arbitration unless the arbitration clause "clearly and unmistakably" delegates the decision to the arbitrator. The Third Circuit rejected the argument that the incorporation of American Arbitration Association ("AAA") rules into an arbitration provision required that an arbitrator determine the question of arbitrability.

In 2008, Chesapeake Appalachia, L.L.C. ("Chesapeake") entered into oil and gas leases (the "Leases") with defendant Scout Petroleum L.L.C.'s ("Scout") predecessor. The Leases included the following arbitration provision: