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The Supreme Court Rules on Class Action Removal Limits for Third-Party Counterclaim Defendants

In Home Depot U. S. A., Inc. v. Jackson, No. 17-1471 (May 28, 2019), the Supreme Court of the United States addressed whether third-party counterclaim defendants in class actions have authority under the general removal provision 28 U.S.C. Section 1441(a) or the removal provision in the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. Section 1453(b), to remove their underlying cases to federal courts. Affirming a Fourth Circuit Court of Appeals ruling that section 1441(a)’s phrase “the defendant or the defendants” and CAFA’s reference to “any defendant” refer to any original defendant only, the Supreme Court concluded third-party counterclaim defendants in class actions do not have the authority to remove their cases to federal court under either the general removal provision or CAFA.

Supreme Court Reaffirms That Class Arbitration May Not Be Ordered Unless the Arbitration Agreement Clearly Allows for It

The United States Supreme Court recently issued its opinion in Lamps Plus v Varela, holding that a class action may not be ordered to arbitration unless the parties’ arbitration agreement expressly states that class claims may be arbitrated.

Ambiguity in Arb. Agreement Cannot Be Construed as Consent to Class Arbitration

In Lamps Plus, Inc. v. Varela, the U.S. Supreme Court held that an ambiguous arbitration agreement cannot provide the necessary contractual basis for compelling class arbitration under the Federal Arbitration Act. This decision reverses the Ninth Circuit’s decision that permitted an employee’s data breach class arbitration to proceed.

SCOTUS: Ambiguity in Arbitration Agreement Cannot Be Construed as Consent to Class Arbitration

In Lamps Plus, Inc. v. Varela, the U.S. Supreme Court held that an ambiguous arbitration agreement cannot provide the necessary contractual basis for compelling class arbitration under the Federal Arbitration Act. This decision reverses the Ninth Circuit’s decision that permitted an employee’s data breach class arbitration to proceed.

Supreme Court Rules on Employee Data Breach Class Arbitration Suit

In June of 2018 we reported that the U.S. Supreme Court granted a petition for review of a data breach lawsuit addressing the issue of whether parties can pursue class arbitration when the language in the arbitration agreement does not explicitly allow for such, Lamps Plus, Inc. v. Varela , No. 17-988, certiorari granted April 30, 2018. By granting the petition for certiorari, the Court afforded itself the opportunity to clarify its 2010 decision in Stolt-Nielsen v. AnimalFeeds International Corp., 559 U.S. 662 (2010) in which the Court ruled that parties cannot be forced into class arbitration, “unless there is contractual basis for concluding [they] agreed to do so”. The Supreme Court has finally issued its decision, ruling on April 24 2019, that arbitration agreements must explicitly include a class arbitration clause for parties to arbitrate class action claims.

Supreme Court Strikes Down Classwide Employment Arbitration Claim

The Supreme Court has held that employees may not compel their employer to face classwide arbitration when an agreement is ambiguous as to whether the parties agreed to submit to class arbitration. The Court's 5-4 ruling in Lamps Plus, Inc. v. Varela, which divided along ideological lines, is the latest in a series of close decisions permitting companies to bar class actions both in court as well as in arbitration.

Supreme Court Says: Express Language Required to Arbitrate on a Class Basis

Executive Summary: Approximately one year ago, in Epic Systems Corp., the United States Supreme Court upheld the enforceability of mandatory arbitration agreements that prohibit employees from bringing employment claims on a class or collective basis – settling a longstanding circuit split over whether such provisions violate federal labor law. Just this week, the Supreme Court issued another important ruling in Lamps Plus, Inc., which clarifies that an employer cannot be compelled to arbitrate class and collective claims, unless the express language of its arbitration agreement authorizes such action. This decision marks the continued approval of arbitration agreements that require employees to individually arbitrate claims against their employers.

Supreme Court Confirms Class Arbitration May Not Proceed Unless Expressly Permitted by the Arbitration Agreement

On April 24, 2019, in a 5-4 opinion written by Chief Justice Roberts, the U.S. Supreme Court held that even if an arbitration agreement is ambiguous as to whether classwide arbitration is permitted, that is insufficient to find that the parties consented to class arbitration. Lamps Plus, Inc. v. Varela, No. 17–988 (2019). In doing so, the Court emphasized that there is a fundamental difference between class arbitration and the individualized form of arbitration envisioned by the Federal Arbitration Act (FAA). The Court’s decision firmly reinforces decades of precedent that arbitration is a matter of consent and aligns with its recent trend of pro-arbitration opinions.

eLABORate: Lamps Plus Decision Sheds Light on Class Arbitration Agreements

On April 24, 2019, the United States Supreme Court in Lamps Plus v. Varela held that employees cannot bring class-wide claims in arbitration if the underlying arbitration agreement does not clearly and explicitly authorize class proceedings.

U.S. Supreme Court: Employment Class Arbitration Must Be Expressly Addressed in Contract

Class action arbitration is such a departure from ordinary, bilateral arbitration of individual disputes that courts may compel class action arbitration only where the parties expressly declare their intention to be bound by such actions in their arbitration agreement, the U.S. Supreme Court has ruled in a 5-4 decision. Lamps Plus, Inc. v. Varela, No. 17-988 (Apr. 24, 2019). The Supreme Court said, “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.”