Wednesday, February 25, 2015

1.     Except as otherwise prohibited in the arbitration agreement,  a party may move the Court to order consolidation of separate arbitration proceedings as to all or some of the claims, where:

       a.     There are separate arbitration agreements or separate arbitration proceedings between the same parties, or one is a party to a separate arbitration agreement or a separate arbitration proceeding with a third person; and

       b.     The arbitrable claims arise in “substantial part from the same transaction or series of related transactions”; and

      c.      An existing “common issue of law or fact creates the possibility of conflicting decisions” in the arbitration proceedings; and

     d.     “Prejudice resulting from a failure to consolidate is not outweighed by the risk of undue delay or prejudice to the rights of or hardship to parties opposing consolidation.”

Fla. Stat. § 682.033 (1)(a) – (d).

2.     Where an arbitration proceeding is subject to consolidation, the Court may order “consolidation of separate arbitration proceedings as to some claims and allow other claims to be resolved in separate arbitration proceedings.” Fla. Stat. § 682.033(2).

3.     However, the Court may not order consolidation of any claims where the arbitration agreement prohibits consolidation and Fla. Stat. § 682.033 may not be construed to affect commencing, maintaining, or certifying a class action claim or defense. Fla. Stat. § 682.033(3).

1.     Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758 (2010).

      a.     The parties stipulated that their agreement was silent on any agreement for class arbitration. Id. at 1768. 

     b.     Since the parties so stipulated, there was no agreement to class arbitration and a party may not be compelled to “submit to class arbitration unless there is a contractual basis for concluding that the parties agreed to do so.”  Id. at 1775. 

      c.      Where the agreement is silent on the subject of class arbitration, the arbitrator exceeds his or her authority by permitting class arbitration where the parties never agreed to class arbitration. Id.

2.     Sutter v. Oxford Health Plans, LLC, 675 F.3d 215 (3d Cir. 2012). 

      a.     The parties contractually agreed that “[n]o civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration … .”  Id. at 217. 

         b.     As a result, the arbitrator ruled that the first phrase of the clause encompassed all possible court actions, including class actions, and thus the second phrase permitted class actions to be arbitrated.  Id. at 218. 

      c.      Oxford attempted to have the arbitrator’s ruling vacated based upon Stolt-Nielsen’s holding that an arbitrator panel exceeds its authority to allow class arbitration where the parties never agreed to do so.  Id.

       d.     The Sutter court affirmed the arbitrator’s decision and expressly noted that the FAA sets forth the exclusive grounds upon which an arbitration award may be vacated, including where the arbitrators exceed their powers.  Id. at 219 (citing 9 U.S.C. § 10(a)). 

       e.     An arbitrator exceeds such authority when he or she decides an issue not submitted to arbitration by the parties, “grants relief in a form that cannot be rationally derived from the parties’ agreement and submissions, or issues an award that is so completely irrational that it lacks support altogether.”  Id. at 219-20 (citations omitted).

     f.       Thus, the court held that an arbitrator may determine that the scope of the arbitration clause reflects the parties’ intent to permit class arbitration. Id. at 223-24.

      g.     Sutter also discussed at length Stolt-Nielsen, but determined that it was distinguishable because the parties in that case had stipulated that the agreement was silent on any agreement for class arbitration.  Id. at 220-24. 

        h.     In contrast, the parties’ intent as to class arbitration in Sutter was in question, so the scope of the arbitration agreement was relevant for the arbitrator to resolve the issue.  Id. at 224.  “[T]he arbitrator construed the text of the arbitration agreement to authorize and require class arbitration.”  Id.  By doing so, the arbitrator did not exceed his powers to authorize class arbitration.  Id. at 225.

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