The United States Supreme Court recently held that classwide arbitration cannot be inferred from an ambiguous agreement. The Supreme Court’s decision reverses a Ninth Circuit decision that relied on state contract principles to compel classwide arbitration of a putative class action filed by an individual employee.
In Lamps Plus, Inc. v. Varela, __ U.S. __ (April 24, 2019), the Court considered whether the Federal Arbitration Act (“FAA”) forecloses interpretation of an ambiguous arbitration agreement compelling classwide arbitration. The Ninth Circuit affirmed the trial court’s determination that an agreement that stated “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings” was ambiguous as to whether it authorized class arbitration. Applying California state contract principles to construe the agreement against the drafter, the Ninth Circuit held there was sufficient ambiguity to conclude the parties agreed to class arbitration. Continue Reading Supreme Court Holds That Class Arbitration Cannot Be Inferred from Ambiguous Agreement