A federal court in New York has held that arbitrators, not courts, should decide whether class arbitration is available under an arbitration agreement entered into between private parties. The court had previously compelled the arbitration of plaintiffs’ claims against certain defendants and stayed the remainder of the action. The issue now presented was on defendants’ motion to preclude plaintiffs from pursuing class arbitration and to require individual arbitrations of those claims. In determining that the issue of class arbitration was one for the arbitrators, the court considered prior U.S. Supreme Court and lower court holdings, but found no binding precedent on the issue. Because the court had already ruled on the enforceability of the parties’ agreement to arbitrate, the interpretation of that agreement – to decide whether or not it allowed for class arbitration – was “a matter within the arbitrator’s competence.” Defendants’ request to order individual arbitrations was therefore denied. The court declined to reach the parties’ other arguments, including whether plaintiffs had waived or conceded the class arbitration issue, finding those matters also best left to the arbitrators. In Re A2P SMS Antitrust Litigation, Case No. 12-CV-2656 (USDC S.D.N.Y. May 29, 2014).
This post written by Renee Schimkat.
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