Supreme Court Holds That Parties Must Unambiguously Consent To Class Arbitration
On April 24, 2019, the United States Supreme Court, in a 5-4 decision authored by Chief Justice Roberts, held that an agreement ambiguous as to whether arbitration had been agreed for class claims as well as individual claims could not provide a contractual basis for class arbitration. Lamps Plus, Inc. v. Varela, 587 U.S. ___, 2019 WL 1780275 (2019). The Court addressed two questions: (i) whether the Court had jurisdiction, given that the district court had compelled arbitration in connection with its dismissal of the underlying claims; and (ii) whether state contract law principles could be applied to interpret an arbitration clause that was ambiguous with regard to the authorization of class arbitration as authorizing such arbitration. The Court held that it had jurisdiction because dismissal of the underlying claims qualified as a “final decision” under the Federal Arbitration Act (“FAA”). On the merits issue, the Court held that a contract that was ambiguous as to whether class arbitration was permitted lacked the explicit “consent” to such arbitration required under the FAA.CATEGORY: Class Actions
Supreme Court Argument On Third-party Counterclaim Defendant Removal
On January 15, 2019, the Supreme Court heard argument on an appeal from a unanimous decision of the U.S. Court of Appeals for the Fourth Circuit holding that a third-party defendant against whom class action counter-claims are asserted in state court is not a “defendant” for purposes of the general removal statute, 28 U.S.C. § 1441 (“Section 1441”) or the Class Action Fairness Act, 28 U.S.C. § 1453 (“CAFA”). The third-party defendant to the class action counterclaims therefore could not rely on those statutes to remove the case. Home Depot U.S.A., Inc., v. Jackson, No. 17-1471.