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Tuesday, August 26, 2014

Third Circuit Says that Courts Decide the "Gateway Question" of the Availability of Class Arbitration

3d CirThe question before the Third Circuit in Opalinski v. Robert Half Int'l Inc. was whether a court or the arbitrator should decide on the availability of class arbitration.  The Court held that the issue was akin to the question of arbitrability itself and so, absent agreement to the contrary, the issue is one for the court.  

The posture of the case is interesting.  Robert Half International (RHI) had filed a motion to compel individual arbitration of David Opalinski's Fair Labor Standard Act claims.  The District Court granted the motion to compel but did not rule on RHI's demand for individual arbitration.  The arbiter issued a partial award in Mr. Opalinski's favor and permitted class arbitration.  At that point, RHI went back to the District Court and moved to vacate the partial award.  The District Court denied that motion, and RHI appealed.  The key issue on appeal was whether the District Court or the arbiter should decide the availability of class arbitration.

The Third Circuit resolves the issue as follows:

We read the Supreme Court as characterizing the permissibility of classwide arbitration not solely as a question of procedure or contract interpretation but
as a substantive gateway dispute qualitatively separate from deciding an individual quarrel. Traditional individual arbitration and class arbitration are so distinct that a choice between the two goes, we believe, to the very type of controversy to be resolved.

The court then went on to note that the Sixth Circuit, the only other Circuit to have ruled on the manner, resolved the issue in the same way.

 

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