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April 24, 2019

SCOTUS Says Class Arbitration May Only Be Invoked If Specifically Authorized

The U.S. Supreme Court ruled 5-4 that the class arbitration process can only be invoked if the arbitration agreement specifically authorized it, Law360 reports.

In Lamps Plus Inc. et al. v. Frank Varela, the Court held that lower courts may not infer consent to invoke class arbitration rather than individualized arbitration when the language in the agreement doesn’t explicitly authorize that both parties agreed to an invocation. The Court addressed a critical distinction from a 2010 ruling. Specifically, the Court held that agreements in which the contractual arbitration language is ambiguous rather than silent “cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration.”

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