On Dec. 7, 2012, the Supreme Court granted certiorari in Oxford Health Plans v. Sutter1 to consider the U.S. Court of Appeals for the Third Circuit’s decision holding that an arbitrator did not exceed his powers under the Federal Arbitration Act (FAA) by ordering class arbitration pursuant to an agreement that was silent on the availability of class procedures. The specific question presented is “[w]hether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively ‘agreed to authorize class arbitration,’ based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract.”2
The Supreme Court
The Supreme Court has twice considered whether class arbitration is permissible if an arbitration agreement does not expressly authorize class procedures. Green Tree Financial v. Bazzle3 involved contracts between a commercial lender and its customers. The contracts required arbitration of all contract-related disputes, but were silent with respect to class arbitration. The South Carolina Supreme Court had held that under South Carolina law, such contracts permit class arbitration, and a resulting arbitration award of $9.2 million was sustained.
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