Monday, June 10, 2013

BREAKING: SCOTUS Defers to Arbitrator on Class Arbitration

A few minutes ago, the Supreme Court released its opinion in Oxford Health Plans, LLC v. Sutter (opinion here). I think there was some hope/fear/expectation that SCOTUS would issue a groundbreaking opinion about when contracts provide for class arbitration.

Instead, the Court essentially just said (paraphrasing): "meh, whatever the arbitrator says is fine." Or, in the actual words of Justice Kagan for a unanimous court:
In sum, Oxford chose arbitration, and it must now live with that choice. Oxford agreed with Sutter that an arbitrator should determine what their contract meant, including whether its terms approved class arbitration. The arbitrator did what the parties requested: He provided an interpretation of the contract resolving that disputed issue. His interpretation went against Oxford, maybe mistakenly so. But still, Oxford does not get to rerun the matter in a court. Under §10(a)(4), the question for a judge is not whether the arbitrator construed the parties’contract correctly, but whether he construed it at all. Because he did, and therefore did not “exceed his powers,” we cannot give Oxford the relief it wants.
Affirming the Third Circuit. Justice Alito (joined by Justice Thomas) filed a concurring opinion.