• Stolt-Nielsen v. AnimalFeeds: U.S. Supreme Court Holds that Class Arbitration Cannot be Imposed on Parties Whose Agreements Are Silent on the Issue
  • May 4, 2010 | Authors: G. Brendan Ballard; Wilson Barmeyer; Thomas M. Byrne; Gail L. Westover; Lewis S. Wiener
  • Law Firms: Sutherland Asbill & Brennan LLP - Washington Office ; Sutherland Asbill & Brennan LLP - Atlanta Office ; Sutherland Asbill & Brennan LLP - Washington Office
  • In a 5-3 majority decision issued on April 27, 2010, the U.S. Supreme Court held in Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., No. 08-1198, that imposing class arbitration on parties who have not agreed specifically to class arbitration is inconsistent with the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. Because the parties in Stolt-Nielsen stipulated that the arbitration clause was silent on class arbitration, the Supreme Court held that the arbitration panel’s inference that the parties’ intended to authorize class-wide arbitration exceeded its powers. The holding answers the question left open by Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2002), on the proper standard to be applied in deciding whether class arbitration is permitted.