{"id":9815,"date":"2019-08-20T13:47:55","date_gmt":"2019-08-20T13:47:55","guid":{"rendered":"https:\/\/www.steinberglawfirm.com\/?p=9815"},"modified":"2019-08-20T13:48:06","modified_gmt":"2019-08-20T13:48:06","slug":"el-quinto-circuito-se-une-a-la-mayoria-de-los-circuitos-que-sostienen-que-la-disponibilidad-del-arbitraje-de-clase-es-una-cuestion-que-debe-decidir-el-tribunal-y-no-un-arbitro","status":"publish","type":"post","link":"https:\/\/www.steinberglawfirm.com\/es\/blog\/the-fifth-circuit-joins-the-majority-of-circuits-in-holding-the-availability-of-class-arbitration-is-an-issue-to-be-decided-by-the-court-not-an-arbitrator\/","title":{"rendered":"El Quinto Circuito se une a la mayor\u00eda de los circuitos al sostener que la disponibilidad del arbitraje colectivo es una cuesti\u00f3n que debe decidir el tribunal, no un \u00e1rbitro"},"content":{"rendered":"\n

The door to class arbitration, and class actions generally,\ncontinues to be pushed closed.  In its 20\/20 Communications, Inc. v. Crawford<\/em>\ndecision issued at the end of July of 2019, the Fifth Circuit joined six of the\nother federal circuit courts holding that the availability of class arbitration\nunder an arbitration agreement is a gateway arbitrability issue to be decided\nby a court rather than an arbitrator.[1]<\/a><\/p>\n\n\n\n

The defendant company required its sales employees to enter\ninto an arbitration agreement as a condition of employment.  The arbitration agreement provided the\narbitrator could \u201chear only individual claims\u201d and prohibited arbitration \u201cas a\nclass or collective action.\u201d  Several sales\nemployees filed arbitration claims and later amended to assert class\nclaims.  The defendant employer filed an\naction in federal court seeking a declaration that the availability of class\narbitration is a gateway issue for the court to decide.<\/p>\n\n\n\n

While the federal court action was ongoing, an arbitrator\nruled that the prohibition on class arbitration in the arbitration agreement\nwas unenforceable under a federal statute. \nThe defendant employer filed a second action in federal court to vacate\nthe arbitrator\u2019s decision on the enforceability of the class arbitration\nprohibition, and the district court confirmed the arbitrator\u2019s decision.  The federal court hearing the defendant\nemployer\u2019s request for a declaratory judgment ruled against the defendant and\nheld that the arbitration agreement permitted the arbitrator to decide the\navailability of class arbitration.  The\ndefendant employer appealed in both cases and the consolidated appeals resulted\nin the Fifth Circuit\u2019s Crawford<\/em> decision.<\/p>\n\n\n\n

The Fifth Circuit concluded that class arbitrability is a\ngateway issue and that under Supreme Court precedent on gateway issues, the\nissue is thus one for courts to decide unless there is \u201cclear and unmistakable\nlanguage in the arbitration agreement to the contrary.\u201d  The Fifth Circuit found class arbitration to\nbe a gateway issue because class arbitration decides the rights of absent\nparties, creates due process issues, increases the size and complexity of the\ndispute, \u201craises the costs and reduces the efficiency of arbitration,\u201d and\nreduces the privacy and confidentiality of arbitration.<\/p>\n\n\n\n

The Court then proceeded to determine whether the arbitration\nagreement \u201cclearly and unmistakably\u201d gave the arbitrator the power to determine\nclass arbitrability.  The Court\u2019s holding\nindicates that such a clear and unmistakable provision allowing the arbitrator\nto decide the availability of class arbitration will essentially never exist\nabsent a provision stating: \u201cThe arbitrator has the power to decide whether the\nagreement permits class arbitration.\u201d  <\/p>\n\n\n\n

The arbitration agreement at issue in Crawford<\/em> provided that if the parties \u201cdisagree over issues concerning\nthe formation and meaning of this Agreement, the arbitrator will hear and\nresolve these arbitrability issues.\u201d  The\nagreement also provided that the arbitrator would use rules from the American\nArbitration Association which provide that the arbitrator will decide class\narbitrability.  However, the Court found\nthe agreement\u2019s bar on class arbitration was relevant to and weighed against\nfinding that any of those provisions gave the arbitrator the power to decide\nclass arbitrability.  The fact that an\nagreement has a provision addressing the availability of class arbitration\nseems immaterial to who decides the availability of class arbitration, and the\nCourt relied on the class arbitration bar without any explanation as to how it\naddresses who decides class arbitrability. \nUltimately, the Court concluded that \u201cnone of these provisions speak\nwith any specificity to the particular matter of class arbitrations,\u201d that the\nclass arbitration bar \u201cby contrast, specifically prohibits arbitrators from\narbitrating disputes as a class action,\u201d and accordingly, the provisions \u201cdo\nnot clearly and unmistakably\u201d give the arbitrator the power to decide class\narbitrability.<\/p>\n\n\n\n

As with decisions from the other circuits addressing this\nissue, the decision is questionable for two main reasons.[2]<\/a>  First, the reasons for concluding class\narbitration is a gateway issue are questionable.  Circuit courts repeatedly rely on the factual\nassumptions in the Crawford <\/em>decision\u2014the\nrights of absent parties, increased size and complexity, increased costs,\nreduced efficiency, and reduced privacy and confidentiality\u2014 to conclude class\narbitration is a gateway issue, but the courts have not engaged in an in-depth\nanalysis of those items and the lens through which the courts consider them.  For example, is it accurate to state that\nclass arbitration increases the size and complexity of the dispute?  Is it accurate to state that class\narbitration increases the costs and reduces the efficiency of resolving the dispute?\n The statements that class arbitration\nincreases the size and complexity of the dispute, is more costly, and reduces\nefficiency beg the question: \u201cCompared to what?\u201d  Class arbitration is undeniably more complex\nthan individual arbitration between a single party and a single defendant.  However, class arbitration may be\nsubstantially less complex, less costly, and more efficient than tens or\nhundreds of individual arbitrations. \nIndeed, that is one of the reasons for the creation of the class action\ndevice.<\/p>\n\n\n\n

Second, the presence of a class arbitration bar appears\nirrelevant to the issue of whether a court or an arbitrator decides the\navailability of class arbitration.  The class\narbitration bar provision in the Crawford<\/em>\ncase and generally provisions barring class arbitration merely state that class\narbitration is not available.  Those\nprovisions do not state who decides the enforceability and meaning of the\nprovision.  An analogous situation that\nmay illuminate the lack of relevance would be if an arbitration agreement\nprovides that the arbitration is to be conducted in Charleston, South Carolina.  Under the Crawford<\/em>\nopinion\u2019s reasoning, that provision would be relevant to whether a court or the\narbitrator decides whether that provision is enforceable and its meaning.[3]<\/a>  As indicated by the absurd analogy, the mere\nexistence of a provision has no bearing on who decides the provision\u2019s\nenforceability and meaning.
<\/p>\n\n\n\n

\n\n\n\n

[1]<\/a> 20\/20 Communications,\nInc. v. Crawford<\/em>, 930 F.3d 715 (5th Cir. 2016).<\/p>\n\n\n\n

[2]<\/a> See, e.g.<\/em>, Del Webb Communities, Inc. v. Carlson<\/em>,\n817 F.3d 867 (4th Cir. 2016); Reed\nElsevier, Inc. v. Crockett<\/em>, 734 F.3d 594 (6th Cir. 2013); JPay, Inc. v. Kobel<\/em>, 904 F.3d 923 (11th\nCir. 2018).<\/p>\n\n\n\n

[3]<\/a> The analogy admittedly requires that the location of\nthe arbitration be of such importance that it could be a gateway issue, but\nassuming it is of such importance, the analogy stands.<\/p>\n","protected":false},"excerpt":{"rendered":"

La puerta al arbitraje de clase, y a las acciones de clase en general, sigue siendo empujada a cerrarse. En su decisi\u00f3n 20\/20 Communications, Inc. v. Crawford emitida a finales de julio de 2019, el Quinto Circuito se uni\u00f3 a seis de los otros tribunales de circuito federal que sostienen que la disponibilidad de arbitraje de clase bajo un acuerdo de arbitraje es una puerta...<\/p>","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_members_access_role":[],"_members_access_error":""},"categories":[289],"tags":[],"class_list":["post-9815","post","type-post","status-publish","format-standard","hentry","category-construction-defect-case-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/posts\/9815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/comments?post=9815"}],"version-history":[{"count":0,"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/posts\/9815\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/media?parent=9815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/categories?post=9815"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.steinberglawfirm.com\/es\/wp-json\/wp\/v2\/tags?post=9815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}