Wednesday, April 24, 2019

SCOTUS decision in Lamps Plus v. Varela: interpreting ambiguous arbitration agreements to allow classwide arbitration

Today the Supreme Court issued a 5-4 decision in Lamps Plus, Inc. v. Varela. The majority opinion, authored by Chief Justice Roberts and joined by Justices Thomas, Alito, Gorsuch, and Kavanaugh, addresses whether the Federal Arbitration Act (FAA) bars an order requiring class arbitration when an arbitration agreement is “ambiguous” about the availability of class arbitration. According to the majority, it does.

The Court first rules that § 16(a)(3) of the FAA permits appellate review when a party seeks an order compelling individual arbitration but the district court issues an order compelling arbitration on a classwide basis. It then decides that “[c]ourts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.” [Op. 12] The Court does not, however, address whether the availability of class arbitration is necessarily a question for the judge—rather than the arbitrator—to decide. Footnote 4 emphasizes that “the parties agreed that a court, not an arbitrator, should resolve the question about class arbitration.”

Justice Thomas joins the majority opinion but authors a brief concurring opinion. There were four dissenting opinions: one by Justice Ginsburg, which was joined by Justices Breyer and Sotomayor; one by Justice Breyer; one by Justice Sotomayor; and one by Justice Kagan, which was joined by Justices Ginsburg and Breyer and partially joined by Justice Sotomayor.

Download Lamps Plus v Varela




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