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.)