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Oxford Health Plans v. Sutter (12-135) 
Arbitrator is authorized to order class arbitration 

Decided June 10, 2013 
[Opinion full text

Oxford Health Care and physician Sutter were parties to an agreement under which Sutter would provide primary care health services to members of Oxford's managed care network in exchange for compensation. When Sutter brought a class action suit in state court alleging delay and underpayment, the court ordered arbitration.

The arbitrator concluded that the following arbitration clause expressed the parties' intent to authorize class arbitration: "No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the Rules of the American Arbitration Association with one arbitrator." Lower courts denied Oxford's motion to vacate the award, and the US Supreme Court unanimously affirmed.

In Stolt-Nielson v. AnimalFeeds, 558 US 662 (2010) the Supreme Court held that an arbitration panel exceeded its authority by ordering class arbitration. But in Stolt-Nielson the parties had stipulated that they had never reached agreement on class arbitration, so those arbitrators had no basis for deciding what the parties' intent was, and the arbitrators were not even interpreting the parties' contract. In the present case, the parties agreed that the arbitrator should decide whether the contract authorized class arbitration. The arbitrator did so. "[T]he arbitrator did what the parties had asked: He considered their contract and and decided whether it reflected an agreement to permit class proceedings. That suffices to show that the arbitrator did not 'exceed[ ] [his] powers'" under Federal Arbitration Act Section 10(a)(4).

Case below: Sutter v. Oxford Health Plans (3rd Cir 11/17/2011) 
Official docket sheet 
Certiorari granted: December 7, 2012. 
Oral argument:  March 25, 2013.  

Questions presented in petition for certiorari:   

In Stolt-Nielsen v. AnimalFeeds International Corp., 130 S. Ct. 1758, 1776 (2010), this Court made clear that “class-action arbitration changes the nature of arbitration to such a degree that it cannot be presumed the parties consented to it by simply agreeing to submit their disputes to arbitration.” In this case, an arbitrator concluded that the parties affirmatively consented to class arbitration on the basis of a contract provision stating: “No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration.” 

The question presented is: 

Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third Circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively “agreed to authorize class arbitration,” Stolt-Nielsen, 130 S. Ct. at 1776, based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract.

Certiorari Documents: 

Briefs on the merits:


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