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Stolt-Nielsen Oral Argument Analysis: Part IV

January 6th, 2010 Authority of Arbitrators, Awards, Class Action Arbitration, Class Action Waivers, Consolidation of Arbitration Proceedings, Practice and Procedure, United States Supreme Court 1 Comment »

Introduction

Stolt-Nielsen turns on the allocation of power between courts and arbitrators.   No matter how thoroughly and neatly you parse the issues, the question that repeatedly and continuously begs for an answer is:  who decides?  Answer that question as it relates to one issue and it pops up again in relation to the next. 

Up until Bazzle the Supreme Court did an admirable job of delineating the bounds of arbitral versus judicial authority.  The lines were blurred in Bazzle, where under the peculiar facts there was a question whether the agreement precluded class arbitration.  (See our Disputing guest post here.)  The question required interpretation of ambiguous contract language – a task arbitrators have both the authority and the competence to perform – so it was remanded to the arbitrators.  The four-Justice plurality said the question was not one of arbitrability, but concerned the “kind” of arbitration to which the parties agreed.  

But many of the lower courts — including the United States Court of Appeals for the Second Circuit — read Bazzle to mean that arbitrators have the authority under a broad arbitration agreement to determine whether the parties agreed to class arbitration when their agreements say nothing about class or consolidated arbitration.   That is a very different question from whether an arbitration agreement precludes class arbitration, and it is not one that the parties in Stolt-Nielsen clearly and unmistakably submitted to the arbitrators.      

Stolt-Nielsen presents the United States Supreme Court with a unique opportunity to draw a sharper and stronger line between the arbitrable and non-arbitrable in cases concerning class or consolidated arbitration.  Whether or not the Court will seize it is an open question, because, as explained in Part III, AnimalFeeds has articulated a plausible argument that Stolt-Nielsen has not established the predicate for the Court’s grant of certiorari:  that the parties’ agreements were silent on class arbitration.  If at least five justices are satisfied with the (we believe, unsatisfactory) status quo concerning class arbitration, or otherwise believe that the best course is to allow class arbitration to continue (and even flourish), then AnimalFeed’s argument may provide an interpretive path for a ruling that the case is not properly before the Court.   

Today we explain why accepting AnimaFeeds’ argument would contravene the letter and spirit of the Federal Arbitration Agreement, breed further litigation, and undermine confidence in arbitration as an effective alternative dispute resolution mechanism.   More to the point, we discuss why and how the Court can reach the merits of Stolt-Nielsen consistently with how Stolt-Nielsen presented the question.     Continue Reading »

Stolt-Nielsen Oral Argument Analysis: Part III

December 23rd, 2009 Arbitrability, Authority of Arbitrators, Awards, Class Action Arbitration, Class Action Waivers, Consolidation of Arbitration Proceedings, United States Supreme Court 2 Comments »

On December 9, 2009 the United States Supreme Court held oral argument in Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198) (oral argument transcript here).  Stolt-Nielsen concerns whether class or consolidated arbitration may be imposed on parties whose contracts are silent on that point, and we have written extensively on it, including an ongoing series of guest-post articles for our friend Karl Bayer’s  Disputing blog.  (Posts available here,  here, here, here, here, here, here, here and here.)  

On December 16, 2009 we posted Part II of our analysis of the oral argument (Parts  I, here, Part II, here).   In this Part III we focus on what transpired with respect to the second of four key interrelated issues raised at oral argument and identified in Part I:  What exactly did the arbitrators decide?  Continue Reading »

Stolt-Nielsen Oral Argument Analysis: Part II

December 16th, 2009 Arbitrability, Authority of Arbitrators, Class Action Arbitration, Class Action Waivers, Consolidation of Arbitration Proceedings, United States Supreme Court 3 Comments »

Introduction

On December 9, 2009 the United States Supreme Court held oral argument in Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198) (oral argument transcript here).  Stolt-Nielsen concerns whether class or consolidated arbitration may be imposed on parties whose contracts are silent on that point, and we have written extensively on it, including a series of guest-post articles for the Disputing blog.  (Posts available here,  here, here, here, here, here, here, here and here.)  

Former Solicitor General Seth Waxman, a partner of the prestigious law firm of Wilmer Cutler Pickering Hale & Dorr LLP, and Chair of the firm’s Appellate and Supreme Court Litigation Practice Group, represented the Stolt-Nielsen petitioners before the Court (Mr. Waxman’s bio is here).  Georgetown University Law Center Professor Cornelia T.L. Pillard represented respondent AnimalFeeds.  (Professor Pillard also represented the Bazzle respondents in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003)).  Both attorneys did a very admirable job of presenting their cases on behalf of their clients. 

On December 13, 2009  we posted Part I of our analysis of the oral argument (Part I here).   In this Part II we focus on what transpired with respect to the first of the four key, interrelated issues raised by the Justices and identified in Part I:  The scope of the submission and the corresponding scope of the arbitrators’ authority.  We shall address the remaining three in one or more future posts.  Continue Reading »

Stolt-Nielsen Oral Argument Analysis: Part I

December 13th, 2009 Authority of Arbitrators, Awards, Class Action Arbitration, Class Action Waivers, Consolidation of Arbitration Proceedings, Practice and Procedure, United States Supreme Court 5 Comments »

On December 9, 2009 the United States Supreme Court heard oral argument in the one Federal Arbitration Act case it has agreed to review this Term:  Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198) (oral argument transcript here).  Stolt-Nielsen concerns whether class or consolidated arbitration may be imposed on parties whose contracts are silent on that point, and we have written extensively about the case, including a series of guest-post articles for the Disputing blog.  (Posts available here,  here, here, here, here, here, here, here and here.)

This multi-part post considers what transpired at oral argument and provides our take on it.  Familiarity with the background facts is presumed and, if necessary, can be gleaned here, here, and here.  Continue Reading »

United States Supreme Court Update: Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers & Trainmen (08-604)

December 10th, 2009 Labor Arbitration, United States Supreme Court Comments Off on United States Supreme Court Update: Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers & Trainmen (08-604)

On October 11, 2009 we reported on two labor arbitration cases pending before the United States Supreme Court:  Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers & Trainmen (08-604) (arising under the Railway Labor Act (“RLA”), 45 U.S.C. §§151 et seq.) and Granite Rock Co. v. International Brotherhood of Teamsters (08-1214) (arising under Labor Management Relations Act (“LMRA”) Section 301).  (Post here)  On December 8, 2009 the Supreme Court issued its unanimous opinion in Union Pacific (here).

The Court affirmed the decision of the United States Court of Appeals for the Seventh Circuit to the extent it held that the National Railroad Adjustment Board (the “Board”)  failed “to conform or confine” its orders “to matters within … the [Board’s] jurisdiction.  .  .  .”  See 45 U.S.C. § 153 First (q).  As readers may recall from our previous post, the Board had denied for lack of subject matter jurisdiction certain employee grievance claims on the ground that the claimants had not complied with a Board rule requiring them to prove that the pre-grievance, statutory requirement of a “conference” between the parties had been met, even though there was no bona fide dispute that conferences had taken place.  See 45 U.S.C. §§ 152.  The Seventh Circuit ruled that the Board not only acted outside its jurisdiction, but violated due process.  The Court ruled that the Seventh Circuit should not have reached the due process question, including whether an RLA arbitration award can be overturned solely on the ground that it violated due process.  

As we observed in our October 11, 2009 post, Union Pacific is not a contractual arbitration case, but effectively an administrative law one, and the Court’s ruling will likely have little or no effect on Federal Arbitration Act jurisprudence.  The Granite Rock case – which does involve contractual arbitration, albeit under Section 301 of the LMRA – is still pending before the Court, with oral argument slated for January 19, 2009.

United States Supreme Court Update: Union Pacific and Granite Rock Labor Arbitration Cases

October 11th, 2009 Authority of Arbitrators, Labor Arbitration, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Seventh Circuit, United States Supreme Court 1 Comment »

Introduction

So far the United States Supreme Court has agreed to hear only one arbitration case governed by the Federal Arbitration Act:  Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198), which has been set for oral argument at 10:00 a.m. Eastern Standard Time, December 9, 2009.   (See Russ Kunkel’s LawMemo Arbitration Blog  here.)  We have written extensively on Stolt-Nielsen, which concerns whether class arbitration may be imposed on parties whose contracts are silent on that point.  (Posts available here,  here, here, here, here, here, here, here and here.)

The Supreme Court has also agreed to hear two labor arbitration cases.  The first is Union Pacific Railroad Co. v. Brotherhood of Locomotive Engineers & Trainmen (08-604), which is governed by the the Railway Labor Act (“RLA”), 45 U.S.C. §§151 et seq.  The RLA, among other things, requires arbitration before the National Railroad Adjustment Board (“the Board”) of labor disputes involving railway workers.  Union Pacific, for all practical purposes, is therefore not a contractual arbitration case, but an administrative law one, and the outcome will likely have  little or no effect on Federal Arbitration Act jurisprudence.  The Court held oral argument on October 7, 2009.  (Oral argument Tr. here) 

The second is Granite Rock Co. v. International Brotherhood of Teamsters (08-1214), which arises under Section 301 of the Labor Management Relations Act.  The Court is expected to set argument for later this Fall.  (See Russ Kunkel’s LawMemo Employment Law Blog here.)   Though not governed by the Federal Arbitration Act, Granite Rock, unlike Union Pacific, is a contractual arbitration case.  And the outcome may be relevant to cases falling under the Federal Arbitration Act. 

We briefly summarize below the issues the Court will presumably address in these labor arbitration cases and discuss why Granite Rock may be more controversial than it appears at first blush.    Continue Reading »

SCOTUS Denies Certiorari in All Three Federal Arbitration Act Manifest Disregard Cases Considered at Last Week’s Conference

October 5th, 2009 Awards, Grounds for Vacatur, United States Court of Appeals for the Ninth Circuit, United States Court of Appeals for the Sixth Circuit, United States Supreme Court Comments Off on SCOTUS Denies Certiorari in All Three Federal Arbitration Act Manifest Disregard Cases Considered at Last Week’s Conference

Last week we reported that the United States Supreme Court was considering three petitions for certiorari concerning whether manifest disregard of the law remains a viable ground for vacating or modifying an arbitration award after Hall Street Assoc., L.L.C. v. Mattel , Inc, 552 U.S. ___, slip op. (March 25, 2008) (post here).  Today the Court denied certiorari in all three cases:  The Coffee Beanery, Ltd. v. WW, LLC, 300 Fed. Appx. 415 (6th Cir. 2008) (08-1396);  Grain v. Trinity Health, 551 F.3d 374 (6th Cir. 2008) (08-1446); and Improv West Associates v. Comedy Club, Inc.,  553 F.3d 1277 (9th Cir. ) (08-1529).

Disputing Publishes Part IVB of our Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp. Guest Post

September 21st, 2009 Arbitrability, Authority of Arbitrators, Class Action Arbitration, Class Action Waivers, Consolidation of Arbitration Proceedings, Guest Posts, Practice and Procedure, United States Court of Appeals for the Second Circuit, United States Supreme Court 1 Comment »

On September 1, 2009 Disputing published Part IVA of our four-part guest post on Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198).  In Part IVA  (here) we considered whether the question in Stolt-Nielsen  was one for the court or the arbitrators to decide, and predicted that at least five Justices of the United States Supreme Court will hold that the court must decide it.  If we are correct, then the Supreme Court will consider on a de novo basis whether the arbitration panel had the authority to impose class arbitration on the Stolt-Nielsen parties. 

Today, Disputing published Part IVB of our guest post (here) in which we consider how the Supreme Court might rule on the merits of the question.  We believe that at least five Justices will rule that the arbitrators should not, in the face of the agreements’ silence, have imposed class arbitration where, as here, there is no basis in the Federal Arbitration Act, New York state law or federal maritime law for implying consent to class arbitration.    

The Supreme Court’s decision in Stolt-Nielsen may have some important ramifications for both commercial and consumer arbitration.  So for advance coverage, tune into Disputing….

Disputing has Published Part IVA of Our Stolt-Nielsen v. AnimalFeeds Guest Post

September 1st, 2009 Arbitrability, Authority of Arbitrators, Class Action Arbitration, Consolidation of Arbitration Proceedings, Guest Posts, United States Court of Appeals for the Second Circuit, United States Supreme Court 4 Comments »

On August 17, 2009 Disputing published Part III of our four-part guest post on Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198) (Part III available here).  In Part III we examined the background of Stolt-Nielsen and identified four issues that the United States Supreme Court will likely confront when it decides the case. 

Today Disputing published Part IVA (here), in which we consider the first issue:  Who decides whether class arbitration can be imposed on the parties when their arbitration agreements are silent on that point?  Put differently, is the question one of arbitrability for the court or one of procedural arbitrability or contract interpretation for the arbitrators?    

Resolution of the question defines the standard of review.  Questions of arbitrability are reviewed de novo on the law and for clear error on the facts.  But if the question is one of procedural arbitrability or contract interpretation, the standard is the deferential one provided by Federal Arbitration Act Section 10, the one applied by both the District Court and the United States Court of Appeals for the Second Circuit. 

The arbitrators in Stolt-Nielsen decided that class arbitration was authorized by the parties’ arbitration agreements even though the agreements said nothing about class arbitration.  We believe that at least five Justices will conclude that this question was one of arbitrability for the Court to decide, and will either decide the issue de novo or remand it to the lower courts to decide. 

The Supreme Court’s decision in Stolt-Nielsen may have some important ramifications for both commercial and consumer arbitration.  So for advance coverage, tune into Disputing….

Disputing has Published Part III of our Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp. Guest Post

August 17th, 2009 Arbitrability, Authority of Arbitrators, Class Action Arbitration, Consolidation of Arbitration Proceedings, Guest Posts, United States Court of Appeals for the Second Circuit, United States Supreme Court Comments Off on Disputing has Published Part III of our Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp. Guest Post

Last week we announced that  Disputing had published Part II of our four-part guest post on Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 548 F.3d 85 (2d Cir. 2009), petition for cert. granted June 15, 2009 (No. 08-1198) (Disputing post here).  Today, Disputing published Part III, which discusses the background and procedural history of the Stolt-Nielsen case and identifies the key issues that the United States Supreme Court will likely consider in deciding the case.  

The Supreme Court’s decision in Stolt-Nielsen may have some important ramifications for both commercial and consumer arbitration.  And soon-to-be Justice Sotomayor may provide the swing vote in the case.  So for advance coverage, tune into Disputing….

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