OTLA Trial Lawyer Fall 2021

31 Trial Lawyer • Fall 2021 By Cody Hoesly OTLA Guardian A rbitration continues to enjoy the fervent approbation of a majority of the U.S. Supreme Court. In recent years, the Court has strictly defined the word “arbitration” to mean “arbitration on an individual basis,” thus negating the concept of class arbitration (and thus negating the possibility of any recovery for many small-dollar wrongs). The Court has also strictly enforced its rule that arbitration clauses enjoy “most fa- vored” status when it comes to statutes and common law rules governing the interpretation and enforcement of con- tracts. Meanwhile, recent Oregon decisions have steadily narrowed the procedural and substantive grounds on which parties can challenge arbitration clauses as Cody Hoesly unconscionable. On the flip side, the courts have narrowed the category of parties who are bound by arbitration agreements they did not sign. These are only some examples of the recent trends. Class arbitration is an oxymoron In the last decade, the Court has (re) defined the term “arbitration” in the Federal Arbitration Act (FAA) to mean arbitration of individual claims only, holding there is no such thing as class- action arbitration. In Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp. , 559 US 662 (2010), the Court held that, where an arbitration clause is silent on whether it permits class arbitration, class arbitration is not permitted. In Lamps Plus, Inc. v. Varela , 139 S Ct 1407 (2019), the Court extended Stolt-Nielsen’s holding to arbi- tration clauses that are ambiguous about class arbitration. The clause in Lamps Plus had been drafted by the defendant, and the lower court had therefore resolved the ambiguity against the drafter and permitted class arbitration. But the high court reversed, explaining that, because class arbitration is not really arbitration, you cannot apply the contra proferentem maxim to make it so. The Court did leave open the possibility that parties could explicitly (or perhaps implicitly) specify they want to have the oxymoron of class arbitration. But good luck finding that provision in your next arbitration clause. Resistance is futile Some have resisted the Court’s push against class arbitration. But the Court has not tolerated those efforts. A recent string of cases considered the validity of arbitration clauses that explicitly waived class arbitration — an increasingly com- mon practice that was more important before Lamps Plus (re)defined arbitration to not include class arbitration in the first place. For example, California had a common law rule saying class arbitration waivers are unconscionable. The Court struck the rule down as preempted by the FAA in AT&T Mobility LLC v. Concep- cion , 563 US 333 (2011) . See also DI- RECTV , Inc. v. Imburgia , 577 US 47 (2015) (further applying Concepcion ). See Push and Pull p 34 PUSH AND PULL RECENT APPELLATE RULINGS ABOUT ARBITRATION