Unlike Mark Twain, there’s an open question as to whether the Supreme Court’s decision in Stolt-Nielsen v. AnimalFeeds Int’l Corp. is dead or alive. As you may recall, Stolt-Nielsen all but created a bright-line rule that class actions aren’t available in arbitration unless the arbitration agreement says they are; silence just won’t cut it.
Anyway, in Jock v. Sterling Jewelers, the Second Circuit side-stepped Stolt-Nielsen in a crafty way: The Second Circuit held that a district court cannot substitute its own judgment regarding the interpretation of the parties’ arbitration agreement for that of the arbitrator. So, where the arbitrator determines that the the parties’ silence actually meant that they intended to preserve the ability for a claimant to seek class treatment, well, there’s nothing we can do about it. Clever, eh?
We’ll keep watching how courts continue to treat class issues in arbitration.