SCOTUS Clarifies Stolt-Nielsen — Confirms Arbitrator's Decision to Conduct Classwide Arbitration in Arbitration
In Oxford Health Plans LLC v. Sutter, — S.Ct. —-, 2013 WL 2459522 (U.S. 2013), the Supreme Court clarified that Stolt-Nielsen was an exception to the normal rule based solely on the parties' stipulation there that their agreement was silent on the issue of whether a party could arbitrate class claims. Here, there was no stipulation. Accordingly, the arbitrator decided that the arbitration agreement provided for class arbtration since it required arbitration of all disputes that could otherwise be brought in court, and class claims might be brought in court. Even if this interpretation of the contract was wrong, it could not be challenged on a motion to vacate the arbitration award.
Oxford's contrary view relies principally on Stolt–Nielsen. As noted earlier, we found there that an arbitration panel exceeded its powers under § 10(a)(4) when it ordered a party to submit to class arbitration. See supra, at 3. Oxford takes that decision to mean that "even the 'high hurdle' of Section 10(a)(4) review is overcome when an arbitrator imposes class arbitration without a sufficient contractual basis." Reply Brief 5 (quoting Stolt–Nielsen, 559 U.S., at 671). Under Stolt–Nielson, Oxford asserts, a court may thus vacate "as ultra vires " an arbitral decision like this one for misconstruing a contract to approve class proceedings. Reply Brief 7. ¶ But Oxford misreads Stolt–Nielsen : We overturned the arbitral decision there because it lacked any contractual basis for ordering class procedures, not because it lacked, in Oxford's terminology, a "sufficient" one. The parties in Stolt–Nielsen had entered into an unusual stipulation that they had never reached an agreement on class arbitration. See 559 U.S., at 668–669, 673. In that circumstance, we noted, the panel's decision was not—indeed, could not have been—"based on a determination regarding the parties' intent." Id., at 673, n. 4; see id., at 676 ("Th[e] stipulation left no room for an inquiry regarding the parties' intent"). Nor, we continued, did the panel attempt to ascertain whether federal or state law established a "default rule" to take effect absent an agreement. Id., at 673. Instead, "the panel simply imposed its own conception of sound policy" when it ordered class proceedings. Id., at 675. But "the task of an arbitrator," we stated, "is to interpret and enforce a contract, not to make public policy." Id., at 672. In "impos[ing] its own policy choice," the panel "thus exceeded its powers." Id., at 677. ¶ The contrast with this case is stark. In Stolt–Nielsen, the arbitrators did not construe the parties' contract, and did not identify any agreement authorizing class proceedings. So in setting aside the arbitrators' decision, we found not that they had misinterpreted the contract, but that they had abandoned their interpretive role. Here, the arbitrator did construe the contract (focusing, per usual, on its language), and did find an agreement to permit class arbitration. So to overturn his decision, we would have to rely on a finding that he misapprehended the parties' intent. But § 10(a)(4) bars that course: It permits courts to vacate an arbitral decision only when the arbitrator strayed from his delegated task of interpreting a contract, not when he performed that task poorly. Stolt–Nielsen and this case thus fall on opposite sides of the line that § 10(a)(4) draws to delimit judicial review of arbitral decisions.