In addition to the exciting cert grants from the Supreme Court today in the gay marriage cases out of New York and California, don't overlook Oxford Health Plans v. Sutter, a case also taken today raising a question about the availability of class arbitration.
The
case is a followup to the decision in Stolt-Nielsen v. AnimalFeeds, where the
Supreme Court held that arbitrators exceeded their powers in ordering class
arbitration on public policy grounds even though it was acknowledged that the
contract did not reflect agreement by the parties to class proceedings. Here,
by contrast, following Stolt-Nielsen, the arbitrator applied conventional rules
of contract construction and concluded that the contract was properly
interpreted to permit class proceedings although it does not expressly refer to
“class arbitration.” The petitioner in the case (an insurance company facing
claims from a class of doctors that it wrongfully limited payments to them)
argues that even though the arbitrator’s decision was based on a construction
of the contract, the decision was somehow so erroneous that it can be
overturned by a court despite the strict limits the Federal Arbitration Act
imposes on review of arbitrators’ contract interpretations and other legal and
factual rulings.
Accepting the petitioner’s argument would place even heavier
obstacles in the way of class arbitration and perhaps even amount to a holding
that an arbitration agreement can never authorize class arbitration unless it
explicitly mentions class proceedings — a position the Court declined to take
in Stolt-Nielsen and that would be inconsistent with the Court’s own insistence
that the scope of arbitration agreements is a matter of contract.
You can find the case documents on SCOTUSBlog here.
(Public Citizen attorney and CL&P Blog contributor Scott Nelson has been assisting the legal team for the respondent in the case and co-authored this post.)
