We recently began a series of articles in which we ask: Is “class arbitration” viable given the essential nature of arbitration, or is it an oxymoron? (The premise here is that “class arbitration” signifies the utilization of a Federal Rule of Civil Procedure 23 class action protocol in an arbitration proceeding.) In this article, we examine possible bases for the viability of class arbitration. Spoiler alert: they do not hold up to scrutiny.

In brief, here is why. The U.S. Supreme Court has repeatedly stated that it is an overarching principle that commercial arbitration is a creature of contract, and so the roots of a viable class arbitration presumably must be found in an arbitration agreement. The threshold problem in trying to import a class action protocol into a private arbitration proceeding is that the consent of the parties to an arbitration agreement is necessary but not sufficient. An arbitration agreement has the force of contract, not of law, and so it binds only its consenting parties. Nonparty putative “class members” are not bound by an arbitration agreement unless they each agree with the contracting parties to be mutually bound. And absent such additional ad hoc agreements, the arbitrator has no jurisdiction over the putative class members. Consequently, it seems unlikely that a true “class arbitration” award would survive a vacatur motion under Section 10(a)(4) of the Federal Arbitration Act (“FAA”).

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