In their 2013 concurrence in Oxford Health Plans LLC v. Sutter, Justice Samuel Alito, joined by Justice Clarence Thomas, questioned whether absent class members “will be bound by the arbitrator’s ultimate resolution of th[e] dispute” in a class arbitration. Justice Alito suggested that where an arbitration agreement provides “no reason to think that the absent class members ever agreed to class arbitration,” an affirmative answer was unlikely. He posited that “an arbitrator’s erroneous interpretation of contracts that do not authorize class arbitration cannot bind someone who has not authorized the arbitrator to make that determination.” Taken to its logical end, Justice Alito’s rationale would support an argument that class arbitrations should be limited to adjudicating only the claims of class members who affirmatively opt in to the class arbitration proceedings.Read More
By David D. Christensen and Matthew N. Lowe
The Ninth Circuit recently clarified in In re Hyundai and Kia Fuel Economy Litigation that district courts must carefully scrutinize class settlements to ensure that they satisfy each of the prerequisites of Rule 23, especially for Rule 23(b)(3) classes, and that courts cannot substitute the fairness of a settlement for the proper certification analysis. Of particular note, the court emphasized the need to analyze whether potential material differences in the applicable states’ laws preclude certification of a nationwide settlement class.
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