10 June 2013
We’ve previously blogged about the Supreme Court’s grant of review and argument in Oxford Health Plans LLC v. Sutter. Today, the Supreme Court issued its decision (pdf). In a narrowly-written ruling, the Court held that courts lack authority under the Federal Arbitration Act (FAA) to vacate an arbitral award authorizing class arbitration when when (1) the arbitrator’s decision is based on an arguable effort to construe the arbitration agreement and (2) the parties had agreed that the arbitrator should decide whether the arbitration agreement allows class-wide arbitration. Under such limited circumstances, the Court held that the FAA’s limited standard of review of arbitral awards precludes a court from correcting any mistakes in interpreting the agreement. Justice Kagan, who wrote the majority opinion, declared that “[t]he arbitrator’s construction holds, however good, bad, or ugly.”
Read the entire post on Mayer Brown's Class Defense Blog.