Third Circuit: Courts, Not Arbitrators, Decide Whether or not to Require Classwide Arbitration

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Recent Top Court precedent has clearly reinforced the validity of contractual class action lawsuit/arbitration waivers. In AT&T Mobility v. Concepcion, a legal court made obvious that class action lawsuit waivers are enforceable, even when condition common law would hold them unconscionable. In American Express Co. v. Italian Colors, a legal court extended exactly the same enforceability to class arbitration waivers, even where they effectively eliminate a plaintiff’s capability to vindicate a federal statutory right.

What if the arbitration provision is silent concerning the accessibility to a classwide proceeding? Can an offender be needed to undergo classwide arbitration? And it is that the decision for that court or the arbitrator?

Based on another Circuit opinion issued a week ago, whether an arbitration provision could be construed allowing classwide arbitration is really a question for that court. In Opalinski v. Robert Half Worldwide, the problem was whether this is really a “question of arbitrability.” The Final Court has held that questions of arbitrability-a narrow selection of “gateway” problems that visit whether a situation will be arbitrated whatsoever-are presumptively for courts to determine. Typical questions of arbitrabiltiy include if the parties are bound by a specific arbitration provision, or if the supply pertains to a particular kind of debate. Other questions are considered “procedural” questions which are for that arbitrator to determine.

The Final Court hasn’t made the decision which category characterizes the supply of sophistication arbitration. A plurality opinion in 2003 figured that the issue wasn’t certainly one of arbitrability, but newer opinions have emphasized the issue remains unresolved through the Court.

In holding the accessibility to classwide arbitration is really a question of arbitrability, the 3rd Circuit adopted charge from the Sixth Circuit-the only real other circuit so far to squarely weigh in around the issue. The 3rd Circuit reasoned the accessibility to class arbitration implicates whose claims the arbitrator may resolve, because the procedure would empower the arbitrator to solve claims of people who are not parties towards the litigation. The panel also figured that allowing class arbitration implicates the kind of debate posted to arbitration because, because the Top Court has recognized previously, class arbitration changes the character from the arbitration so much that parties shouldn’t be presumed to possess agreed into it just simply because they decided to the arbitration provision.

Thus, within the Third Circuit, courts will presume the accessibility to classwide arbitration is a problem for that court. So what can overcome the presumption? Simply “express contractual language unambiguously delegating the issue of arbitrability towards the arbitrator. . . . Silence or ambiguous contractual language is inadequate to rebut the presumption.”

It remains seen whether other circuits follows suit, or if this may ultimately work its way to the Top Court. Meanwhile, would-be class action lawsuit defendants who would like to do not be forced into class arbitration by an arbitrator can safeguard themselves by making certain their contracts specifically (i) stop class arbitration and (ii) provide that questions of arbitrability should be made the decision with a court of competent jurisdiction.

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