Originally from Dispute Resolution Journal

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I. DELEGATING QUESTIONS OF WHETHER A CASE CAN BE ARBITRATED ON A CLASS-WIDE BASIS – THE FIGHT OVER WHO DECIDES CONTINUES

Arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et seq., (“FAA”) is a creature of contract.  Although there is a liberal policy favoring arbitration agreements, the United States Supreme Court has long endowed courts with the power to analyze and review gateway questions of arbitrability, meaning whether parties have agreed to submit their disputes to arbitration.   In fact, courts are to presume that such “gateway” questions are to be determined by the courts unless there is “clear and unmistakable” evidence that the parties agreed to arbitrate arbitrability.  

Although this area of law is largely settled as it relates to bi-lateral agreements to arbitrate, the issue remains unsettled as to multi-lateral, or class and collective action, arbitrations.  Not only has the United States Supreme Court expressly left open the question of whether class and collective actions are substantive gateway questions for the courts to decide, or procedural questions for an arbitrator, but assuming that the question of the arbitrability of a class action is a gateway question of arbitrability for the courts, there are now varying standards in the Circuit Courts throughout the country as to what constitutes clear and unmistakable evidence of parties’ intent to delegate arbitrability to the arbitrator in class or collective action arbitrations. This article will examine the current state of the law and provide practice pointers with respect to how to draft language that helps ensure the outcome the parties to the arbitration agreement desire.