Supreme Court Decides Lamps Plus v. Varela: No Surprises Here

Today, the Supreme Court somewhat expanded its view that silent arbitration agreements that make no mention of class proceedings, cannot be interpreted as permitting class actions in arbitration. In Lamps Plus Inc. v. Varela, the Court reversed a Ninth Circuit decision holding that an ambiguous agreement can be interpreted to permit a class arbitration. Accepting that the agreement was ambiguous, the Court rejected the California state rule that ambiguity allows a court to construe the language against the drafter, as such an interpretation would interfere with the operation of the FAA. In order to obtain class arbitration, a party must show that the parties consented to class arbitration not just that it is possible to interpret the language to authorize class arbitration. As the Court stated, “Neither silence nor ambiguity provides a sufficient basis for concluding that parties to an arbitration agreement agreed to undermine the central benefits of arbitration itself.” This decision is not surprising given the Supreme Court’s view that bilateral and class arbitration are utterly different mechanisms so that agreement to arbitrate individually cannot be interpreted to allow class arbitration.

You can find the decision here:

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