Eleventh Circuit Applies Sutter to Affirm Class Arbitration; Ninth Circuit Applies Concepcion To Preempt Montana Law
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Within weeks of its issuance, SCOTUS’s Sutter decision is already making an impact on other cases. Both the Eleventh Circuit and the D.C. Court of Appeals citeSutter repeatedly in recent decisions that refuse to vacate arbitration awards. Of course, new decisions are not the only ones that reverberate: Concepcion, a 2011 decision, was just applied by the Ninth Circuit to preempt Montana case law on contracts of adhesion.
Sutter
In Southern Commc’n Servs., Inc. v. Thomas, __ F.3d __, 2013 WL 3481467 (11th Cir. July 12, 2013), the court affirmed an arbitrator’s decision to allow a class action. The plaintiffs are mobile phone consumers who allege they were charged unlawful penalties for canceling phone service. Under the Wireless Industry Arbitration Rules of the AAA, an arbitrator found the arbitration clause allowed class actions and certified the class. The wireless provider then moved to vacate that determination in federal court, claiming the arbitrator exceeded his authority and refused to apply the law. The court, however, carefully applied the language of the recent Sutter decision and said that because the arbitrator engaged with the contract’s language and the parties’ intent, his construction of the contract must be upheld.
The D.C. Court of Appeals also cited Sutter recently in refusing to vacate an arbitration award. In Wolf v. Sprenger + Lang, PLLC, __ A.3d. __, 2013 WL 3466348 (D.C. Ct. App. July 11, 2013), two attorneys sought to vacate an arbitration award against them in a fight over attorneys’ fees. They argued the arbitrator exceeded his powers by addressing an issue outside the scope of the arbitration and by basing his award on notions of ethics instead of the co-counsel agreement. In its analysis, the court summarized that the “‘sole question’ before the court in a challenge [that an arbitrator exceeded his power] is ‘whether the arbitrator (even arguably) interpreted the parties’ contract,’” citing Sutter. Given that limited question, and the fact that the court said there was “no doubt” the arbitrator reached his decisions after interpreting the parties’ co-counsel agreement, the court affirmed the district court’s denial of the motion to vacate.
Read original articleTags: Affirm Class Arbitration, ELEVENTH CIRCUIT, Ninth Circuit
