Supreme Court Issues Narrow Decision Declining To Overturn Arbitrator’s Ruling That Silent Arbitration Clause Permits Class Arbitration

Edited by Archis A. Parasharami and Kevin Ranlett

Keywords: class arbitration, Supreme Court, Class Arbitration, Federal Arbitration Act, FAA,

We've previously blogged about the Supreme Court's grant of review and argument in Oxford Health Plans LLC v. Sutter. Today, the Supreme Court issued its decision (pdf). In a narrowly-written ruling, the Court held that courts lack authority under the Federal Arbitration Act (FAA) to vacate an arbitral award authorizing class arbitration when when (1) the arbitrator's decision is based on an arguable effort to construe the arbitration agreement and (2) the parties had agreed that the arbitrator should decide whether the arbitration agreement allows class-wide arbitration. Under such limited circumstances, the Court held that the FAA's limited standard of review of arbitral awards precludes a court from correcting any mistakes in interpreting the agreement. Justice Kagan, who wrote the majority opinion, declared