Our colleague Stuart M. Gerson at Epstein Becker Green recently posted an article on LinkedIn that will be of interest to our readers: “SCOTUS Today: Class Action Ambiguity Finds No Shelter Under the Federal Arbitration Act.”
Following is an excerpt:
In a 5-4 opinion (divided on expected conservative/liberal lines), authored by the Chief Justice, the Supreme Court has ruled in the case of Lamps Plus, Inc. v. Varella, No. 17-988, that under the Federal Arbitration Act (“FAA”), an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration.
This reverses the decision of the Ninth Circuit concerning a case relating to the unauthorized disclosure of personal tax information of employees of Lamps Plus after a hacker tricked an employee into divulging that information. The Supreme Court had held in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U. S. 662, that a court may not compel class-wide arbitration when an agreement is silent on the availability of such arbitration. Lamps Plusextends that holding to agreements that are ambiguous. In so doing, the Court’s majority stressed the FAA mandate that arbitration is a matter of consent, and is yet another example of the conservative majority of the Court, led particularly by Chief Justice Roberts, acting to limit the flow of employment and commercial disputes into the federal courts by strongly enforcing the FAA against various policy arguments made by labor unions and other employee groups and organizations on the jurisprudential left. See most recently Epic Systems Corp. v. Lewis, 584 U. S. ___ (2018). …