Supreme Court Will Determine If Silence in an Arbitration Clause May Be Judicially Interpreted to Permit Class Arbitration
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On April 30, 2018, the U.S. Supreme Court granted certiorari to review an unpublished Ninth Circuit decision in Varela v. Lamps Plus, Inc., No. 16-56085 (9thCir. Aug. 3, 2017). See Lamps Plus, Inc. v. Varela (No. 17-988, U.S. Sup.). Lamps Plus framed the question presented to the Supreme Court as follows: “Whether the Federal Arbitration Act [“FAA”] forecloses a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements.”
We commented on the Ninth Circuit’s decision in a prior post — “Contractual ‘Crickets’ Are Sufficient for Ninth Circuit to Determine that Class Arbitration is Permitted, Distinguishing Stolt-Nielsen.” And considering that it was originally designated “Not For Publication,” this is quite the jump for a decision and opinion that the Court of Appeals might easily have wished be forgotten. The appellate court decision was a 2-1 affair, with dissenting Judge Fernandez seemingly getting the better of what seemed like an easy one, considering that the Supreme Court had apparently disposed of the principal question some time before in Stolt-Nielsen v. Animal Feeds Int’l Corp., 55 U.S. 662, 684 (2010).
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