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Who Decides the Scope of Arbitration?

Posted by Eric Kingsley | Nov 20, 2014 | 0 Comments

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The last two months have been busy for the question of who decides the scope of a class claim in arbitration when the arbitration does not specifically allow or prohibit such a proceeding.  On October 9th the California Court of Appeal for the Fourth Appellate District in Network Capital Funding Corporation v. Papke, disagreed with another panel of justices in the Second Appellate District in Sandquist v. Lebo creating a split.  The justices in Sanquistheld that the arbitrator should decide the question of what type of proceeding should be allowed class or individual because it was in essence a procedural process in the dispute.  The justices in Papke disagreed instead looking at it in terms of contract interpretation.  What did the parties agree to is a threshold question for the court to decide.  They had both the 3rd and 6th Circuit Court of Appeals to back them up on their interpretation.

On November 12 the California Supreme court took up Sandquist depublishing it.  On November 17, another case came down validating Papke called Garden Fresh Restaurant Corporation v. Superior Court.  While the California Supreme Court or the United States Supreme Court could go another way it appears for at least the short term judges will have to decide these questions.  This will have the benefit of providing both parties with greater judicial review of any decision but is also likely to slow these cases down considerably so that arbitration is no longer the fast efficient remedy that was promised to them.  Plaintiff who want speed could agree to let the court decide the question and if the court decides a class proceeding should be allowed hope that writ relief is not granted to defense.  More to follow you can be sure.

About the Author

Eric Kingsley

In practice since 1996, attorney and firm co-founder Eric B. Kingsley has litigated complex cases and authored numerous appellate briefs in both state and federal court on behalf of the California law firm of Kingsley & Kingsley, including over 150 class actions. Mr. Kingsley concentrates his pra...

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