The Supreme Court Vacates Arbitrators' Decision Allowing Class Arbitration Based Solely On Arbitrators' Own Policy Views
In its decision in Stolt-Nielsen SA v. AnimalFeeds Int’l Corp., No. 08-1198, issued on April 27, the United States Supreme Court held that an arbitration panel exceeds its authority under Section 10(a)(4) of the Federal Arbitration Act ("FAA") when it compels class arbitration without evidence of specific consent to such form of arbitration. Finding a fundamental difference between a traditional dispute between two parties to a contract and a class arbitration involving potentially hundreds or thousands of parties, the Court held that compelling class arbitration on parties when they did not agree to it is inconsistent with the FAA.