Term: 2009
Docket: 08-1198
Stolt-nielsen S. A., Et Al. v. Animalfeeds International Corp.
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08-1198 STOLT-NIELSEN S.A. V. ANIMALFEEDS INTERNATIONAL DECISION BELOW: 548 F.3d 85 JUSTICE SOTOMAYOR TOOK NO PART CERT. GRANTED 6/15/2009 QUESTION PRESENTED: In Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003), this Court granted certiorari to decide a question that had divided the lower courts: whether the Federal Arbitration Act permits the imposition of class arbitration when the parties' agreement is silent regarding class arbitration. The Court was unable to reach that question, however, because a plurality concluded that the arbitrator first needed to address whether the agreement there was in fact "silent." That threshold obstacle is not present in this case, and the question presented here - which continues to divide the lower courts - is the same one presented in Bazzle: Whether imposing class arbitration on parties whose arbitration clauses are silent on that issue is consistent with the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. LOWER COURT CASE NUMBER: 06-3474
In the case of Stolt-Nielsen S. A., et al. v. AnimalFeeds International Corp., 2009, the U.S Supreme Court ruled that imposing class arbitration on parties who have not agreed to it is inconsistent with the Federal Arbitration Act (FAA). The dispute arose when AnimalFeeds sued Stolt-Nielsen and other shipping companies for alleged price-fixing conspiracy, seeking both individual and class damages under federal antitrust laws. Both parties had a clause in their contract agreeing to resolve disputes through arbitration but did not specify whether they could arbitrate as a class action suit or only individually. When an arbitration panel decided that class-action was permissible, Stolt-Nielsen challenged this decision in court arguing it violated FAA because they never expressly agreed to allow such proceedings. The Supreme Court sided with Stolt-Nielsen stating that silence or ambiguity in an agreement cannot be interpreted as consent for class-action arbitration.
In the dissenting opinion for Stolt-Nielsen S.A. v. AnimalFeeds International Corp., Justice Ginsburg disagreed with the majority's decision that a party cannot be compelled to submit to class arbitration unless there is a contractual basis for concluding they agreed to do so. She argued that this case should have been resolved under standard principles of contract interpretation rather than imposing a rule requiring express consent for class arbitration. According to her, silence or ambiguity in an agreement does not necessarily mean parties have not agreed on something; it could simply mean they did not anticipate certain issues at the time of contracting and thus left them open-ended. Furthermore, she contended that arbitrators are competent authorities capable of interpreting contracts and determining whether parties intended their disputes be arbitrated on individual or group basis based on industry practices, course of dealing and other relevant factors.
