Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp.

A unanimous panel of the Fourth Circuit has held Del Webb Communities, Inc. v. Carlson that the question whether an arbitration agreement authorizes class-wide arbitration is for the courts, not an arbitrator, to decide—unless the agreement clearly and unmistakably delegates that issue to the arbitrator. In so holding, the Fourth Circuit aligned itself with decisions of the Third and Sixth Circuits. As we discuss below, the decision benefits businesses that seek to enforce individual arbitration when the arbitration agreement does not expressly authorize class arbitration: If the important question of the availability of class-wide arbitration was assigned to an arbitrator, meaningful judicial review of that decision would not be available.

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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

The Supreme Court heard oral argument earlier today in Oxford Health Plans LLC v. Sutter, No. 12-135, on whether the Federal Arbitration Act (“FAA”) allows an arbitrator to interpret an arbitration agreement that does not affirmatively authorize class arbitration to permit use of that procedure.

For some background on Oxford, please see our