{"id":888255,"date":"2016-04-19T16:43:21","date_gmt":"2016-04-19T22:43:21","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=888255"},"modified":"2016-04-19T16:43:21","modified_gmt":"2016-04-19T22:43:21","slug":"fourth-circuit-courts-not-arbitrators-decide-if-arbitration-agreement-authorizes-class-wide-arbitration","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/fourth-circuit-courts-not-arbitrators-decide-if-arbitration-agreement-authorizes-class-wide-arbitration\/","title":{"rendered":"Fourth Circuit: Courts, Not Arbitrators, Decide If Arbitration Agreement Authorizes Class-Wide Arbitration"},"content":{"rendered":"<p>Archis A. Parasharami, Kevin S. Ranlett and Charles E. Harris, II | Mayer Brown | April 4, 2016<\/p>\n<p>A unanimous panel of the U.S. Court of Appeals for the Fourth Circuit has held that the question whether an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/agreements-to-arbitrate-are-simple-right\/\" target=\"_blank\">arbitration agreement<\/a> authorizes class-wide arbitration is for the courts, not an arbitrator, to decide\u2014unless the agreement clearly and unmistakably delegates that issue to the arbitrator. (<em>Del Webb Communities, Inc. v. Carlson<\/em>, No. 15-1385 [Mar. 28, 2016]). In so holding, the Fourth Circuit aligned itself with decisions of the Third and Sixth Circuits. As we discuss below, the decision benefits businesses that seek to enforce individual arbitration when the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-201-drafting-the-arbitration-clause-for-the-arbitration-you-want\/\" target=\"_blank\">arbitration agreement<\/a> does not expressly authorize class arbitration: If the important question of the availability of class-wide arbitration was assigned to an arbitrator, meaningful judicial review of that decision would not be available.<\/p>\n<p>The U.S. Supreme Court has made clear that parties cannot be forced to arbitrate on a class-wide basis absent \u201ca contractual basis for concluding that the party <em>agreed <\/em>to do so.\u201d (<em>Stolt-Nielsen, S.A. v. AnimalFeeds Int\u2019l Corp.<\/em>, 559 U.S. 662, 684 [2010]). Parties frequently dispute, however, the threshold question of who decides\u2014a court or an arbitrator\u2014whether the agreement authorizes class arbitration. <em>Del Webb <\/em>is such a case; a home construction company filed a petition in federal district court to compel the homebuyers to arbitrate their underlying claims on an individual basis, and specifically sought a declaratory judgment that the parties did not agree to class arbitration.<\/p>\n<p>The district court denied that request and dismissed the petition. Relying on the Supreme Court\u2019s plurality decision in <em>Green Tree Financial Corp. v. Bazzle<\/em>, 539 U.S. 444 (2003), and an unpublished Fourth Circuit decision echoing <em>Bazzle<\/em>, the district court reasoned that whether the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-vs-litigation-the-great-debate\/\" target=\"_blank\">arbitration agreement<\/a> authorized class-wide arbitration \u201cconcerns the procedural arbitration mechanisms available\u201d to the homebuyers and was therefore a procedural question for the arbitrator to decide.<\/p>\n<p>The Fourth Circuit reversed. In an opinion by Judge Diaz, the panel recognized that although the Supreme Court had not \u201cconclusively\u201d determined who gets to decide whether an <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/ties-that-bind-a-suretys-right-to-require-arbitration-of-a-construction-dispute\/\" target=\"_blank\">arbitration agreement<\/a> provides for class arbitration, the Court had \u201ceffectively disavowed\u201d the rationale of the <em>Bazzle <\/em>plurality. The panel further recognized that the Supreme Court has emphasized in recent years, including in <em>AT&amp;T Mobility LLC v. Concepcion<\/em>, that class-wide arbitration wreaks fundamental changes on the nature of arbitration\u2014combining the enormous stakes and procedural complexity of class-action litigation with exceedingly limited judicial review. Because of \u201cthe fundamental differences between bilateral [one-on-one] and class arbitration,\u201d the Fourth Circuit expressly joined the Third and Sixth Circuits in holding that the availability of class-wide arbitration is \u201ca gateway question for the court\u201d to decide, \u201cunless the parties clearly and unmistakably provide otherwise.\u201d<\/p>\n<p>By allowing a court to decide&#8230;<\/p>\n<p><a href=\"https:\/\/www.mayerbrown.com\/Fourth-Circuit-Courts-Not-Arbitrators-Decide-If-Arbitration-Agreement-Authorizes-Class-Wide-Arbitration-04-04-2016\/\" target=\"_blank\">To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Archis A. Parasharami, Kevin S. Ranlett and Charles E. Harris, II | Mayer Brown | April 4, 2016 A unanimous panel of the U.S. Court of Appeals for the Fourth Circuit has held that the question whether an arbitration agreement authorizes class-wide arbitration is for the courts, not an arbitrator, to decide\u2014unless the agreement clearly&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/fourth-circuit-courts-not-arbitrators-decide-if-arbitration-agreement-authorizes-class-wide-arbitration\/\">Continue reading <span class=\"screen-reader-text\">Fourth Circuit: Courts, Not Arbitrators, Decide If Arbitration Agreement Authorizes Class-Wide Arbitration<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[42],"class_list":["post-888255","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-arbitration-2","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Fourth Circuit: Courts, Not Arbitrators, Decide If Arbitration Agreement Authorizes Class-Wide Arbitration - Advise &amp; 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