Supreme Court Holds That Courts Must Defer To Arbitrator’s Decision To Authorize Class Arbitration

On June 10, 2013, the United States Supreme Court unanimously held in Oxford Health Plans, LLC v. Sutter that an arbitrator's decision to authorize class arbitration will not be disturbed under Section 10(a)(4) of the Federal Arbitration Act (FAA) when that decision is grounded in the arbitrator's interpretation of the agreement. In so holding, the Supreme Court squared the circle between two recent decisions that demonstrated the Court's predisposition against class arbitration and the Court's traditional promotion of limited judicial review under the FAA.

There are two lessons for practitioners. First, those who seek to avoid class arbitration can best insulate themselves from that risk by incorporating an express class action waiver in any arbitration clause. A standard arbitration clause that is "silent" on the issue of class arbitration will not provide sufficient protection. Given that many arbitration clauses do not expressly address class arbitration, parties