SCOTUS Makes It Clear: An Ambiguous Arbitration Agreement Does Not Give Rise to Class Arbitration

In a significant decision regarding the Federal Arbitration Act (FAA), the Supreme Court of the United States recently emphasized once again that class-wide arbitration is not allowed unless the parties to an arbitration agreement explicitly and unambiguously consented to it. Previously, the Supreme Court in Stolt-Nielsen S.A. v. Animal Feeds Int’l Corp held that when an arbitration agreement is silent on the issue of class-wide arbitration, a court cannot compel it. 559 U.S. 662 (2010). Now, the Supreme Court has taken that reasoning a step further. In its April 2019 decision in Lamps Plus, Inc. v. Frank Varela, No. 17-988, 2019 WL 1780275, the court held that even an arbitration agreement that is ambiguous on the availability of class-wide arbitration not sufficient under the FAA to permit class arbitration.