Last Monday, the U.S. Supreme Court handed down its opinion in a post-Stolt-Nielsen arbitration case, Oxford Health Plans LLC v. Sutter, ___ U.S. ___ (Jun. 10, 2013). The Court affirmed the arbitrator's determination that the parties had agreed to class arbitration, even though the contract made no explicit mention of class arbitration. Slip op. at 4-9.
Oxford maintained that under Stolt-Nielsen, class arbitration could not be compelled absent the parties' consent, but the problem for Oxford was that it "agreed with Sutter that an arbitrator should determine what their contract meant, including whether its terms approved class arbitration." Id. at 8. The arbitrator's determination on that point therefore "holds, however good, bad, or ugly." Id. The Court did not decide whether, absent such a concession, the question should be resolved by the arbitrator or the district judge.
This is the third recent U.S. Supreme Court decision on class-action-related issues in which a party concession significantly impacted the analysis and result.
In Comcast Corp. v. Behrend, ___ U.S. ___ (Mar. 27, 2013), it was "uncontested" by the parties that predominance under Rule 23(b)(3) requires a common method of proving and measuring damages -- even though the ordinary and long-established rule is that common questions predominate notwithstanding any individualized damages issues. The Court then held that the plaintiffs' proposed common method of proving damages (and liability) was inadequate for various fact-specific reasons. (Comcast is discussed in this blog post.)
In Genesis Healthcare Corp. v. Symczyk, ___ U.S. ___ (Apr. 16, 2013), the parties agreed that the defendant's Rule 68 offer of judgment mooted the plaintiff's FLSA claim. The Court then addressed whether a plaintiff with a moot claim could proceed with a FLSA collective action, and decided she could not. The opinion provides little or no guidance on whether defense-initiated "pick-off" attempts are effective in collective (or class) litigation.
In Stolt-Nielsen itself (as the Court noted in Oxford Health), the parties "had entered into an unusual stipulation that they had never reached an agreement on class arbitration." Oxford Health, slip op. at 6 (citing Stolt-Nielsen, 559 U. S. at 668-69, 673).
In another recent, non-class-action case, the opinion also turned on an issue that had been conceded. In US Airways, Inc. v. McCutchen, ___ U.S. ___ (Apr. 16, 2013), handed down the same day as Genesis Healthcare, the four dissenting justices complained that "[t]he Court has no business deploying against petitioner an argument that was neither preserved, [citation], nor fairly included within the question presented." Scalia, J., dissenting, slip op. at 2.
The irony is that those dissenters did precisely the same thing in Comcast, as Justice Ginsburg took pains to point out in her dissent in that case. Surely this was not lost on Justice Kagan, who authored the US Airways majority opinion, as well as the dissent in Genesis Healthcare, where she said that the Genesis Healthcare majority decision "resolve[d] an imaginary question, based on a mistake," and recommended that the opinion be "relegate[d] ... to the furthest reaches of your mind: The situation it addresses should never again arise." Kagan, J., dissenting, slip op. at 1-2.
It would be nice if the Court took up some clean cases in which party concessions played less of a role. Opinions in concession-driven cases are of limited value and can lead to confusion in the lower courts.
New opinions are expected from the Court this morning and Thursday morning. We are still waiting for the opinion in another arbitration-related case, American Express Co. v. Italian Colors Restaurant, No. 12-133 (argued 02/27/13).