Originally from Alternatives to the High Cost of Litigation

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Just ahead of May’s landmark Epic Systems v Lewis class waivers/mandatory arbitration decision (see article on the front page of this issue), the U.S. Supreme Court added a second arbitration case for the 2018-2019 term, Lamps Plus Inc. v Varela, No. 17-988.

The unpublished case, from the Ninth U.S. Circuit Court of Appeals, will decide whether the Federal Arbitration Act “forecloses a statelaw interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements,” according to the issue presented issued by the Court. 

In Lamps Plus, the Court will continue from Stolt-Nielsen S.A. v AnimalFeeds Int’l Corp., 55 U.S. 662 (2010)(available at https://bit.ly/2H7vga0), where the Court had held that a party “may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” 559 U.S. at 684 (emphasis is the Court’s). 

In that regard, Stolt-Nielsen stated that “mere silence on the issue of class-action arbitration” could not be presumed to constitute consent to resolve disputes in class proceedings. Rather, “the FAA requires more,” and “the question … [is] whether the parties agreed to authorize class arbitration.” [Emphasis is the Court’s.]