February 06, 2014 Articles

Arbitrators Do Not Exceed Their Powers Simply Because They Render a "Bad or Ugly" Decision

By Christopher Moore

In Oxford Health Plans LLC v. Sutter, – U.S –, 133 S. Ct. 2064, No. 12-135 (June 10, 2013), the Supreme Court unanimously affirmed a Third Circuit decision holding that an arbitrator did not exceed his power when he found that an arbitration clause permitted class arbitration even though the clause was silent as to such matters. The decision distinguished Stolt-Nielsen v. Animal Feeds Int'l, 130 S.Ct. 1758 (2010), which held that an arbitration panel had exceeded its power by allowing class arbitration.

Sutter (plaintiff) was a doctor who provided services to Oxford Health Plans (defendant) under a contract (contract) that contained an arbitration clause (clause). The clause stated that "no civil action concerning any dispute arising under [the contract] shall be instituted before any court" and that "all such disputes" must be arbitrated. The clause did not mention class actions. Despite the clause, the plaintiff filed a purported class action in state court alleging that the defendant had failed to pay him and other doctors what was required under the contract. The defendant moved to compel arbitration. The motion was granted. The parties then agreed that the arbitrator should decide whether the contract authorized class arbitration.

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