Class Arbitration: Contractual “Crickets” Are Sufficient for Ninth Circuit to Determine That Class Arbitration Is Permitted
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When is “silence” in an arbitration clause concerning class arbitration not “Stolt-Nielsen silence”? And what is the difference between a “claim” and a “procedure”? The Ninth Circuit seemingly took hair-splitting to a new level in conceiving the former question, and apparently suffered some uncertainty regarding the latter, when it issued its memorandum decision in Varela v. Lamps Plus, Inc., No. 16-56085 (Aug. 3, 2017).
In Lamps Plus, the Court of Appeals affirmed a District Court order compelling arbitration and allowing class-wide arbitration to proceed. Varela, a Lamps Plus employee, had commenced a class-action suit against his employer, alleging negligence, breach of contract, invasion of privacy, and other claims, based upon the release by Lamps Plus of personal identifying information of its employees in a phishing scam. Each of its employees signed an agreement that included an arbitration clause, and so the employer moved to compel bilateral arbitration with Varela concerning his claims. The plaintiff(s) eventually argued for class arbitration, but the arbitration clause said nothing about such a procedure.
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