The Supreme Court granted certiorari in Lamps Plus, Inc. v. Varela, on appeal from the Ninth Circuit. The case relates to how clear an arbitration agreement needs to be in order to show the parties authorized class arbitration. The question presented to the Supreme Court is whether the Federal Arbitration Act forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements. In the lower court, a California district court found that the plaintiff’s arbitration agreement authorized class arbitration, and the Ninth Circuit affirmed. The majority panel found the agreement was ambiguous as to class arbitration and construed it against the drafter (Lamps Plus). The agreement did not expressly refer to class arbitration, and accordingly, the Supreme Court will decide whether an agreement that does not mention class or collective arbitration authorizes it. In its petition for certiorari, Lamps Plus argued that the silence in an agreement regarding class arbitration could not constitute consent to class arbitration. This case will be closely watched, as the Ninth Circuit’s opinion seems to be in conflict with the United States Supreme Court’s 2010 decision in Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010). In that case, the Court held that a district court could not infer an agreement to class arbitration simply from the fact that the parties had agreed to arbitrate. Rather, the Court said that there had to be an express contractual basis for a district court to compel class arbitration. The Ninth Circuit distinguished Stolt-Nielsen based on some arguably ambiguous language in the agreement at issue. Accordingly, the Supreme Court’s review of Lamps Plus should provide some clarity about the language necessary to authorize class arbitration.
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