Green Tree Financial Corp. v. Bazzle

PETITIONER: Green Tree Financial Corp.
RESPONDENT: Lynn W. Bazzle et al.
LOCATION: United States Court of Appeals for the Ninth Circuit

DOCKET NO.: 02-634
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: South Carolina Supreme Court

CITATION: 539 US 444 (2003)
ARGUED: Apr 22, 2003
DECIDED: Jun 23, 2003

ADVOCATES:
Carter G. Phillips - Argued the cause for the petitioner
Cornelia T. L. Pillard - Argued the cause for the respondents

Facts of the case

In an attempt to solve a contract dispute, Lynn and Burt Bazzle filed suit against Green Tree Financial Corporation. After they filed the suit, the Bazzles learned that other Green Tree customers were dealing with the same sort of dispute. As a result, they asked for and received permission to file a class action suit. However, Green Tree contracts had a clause requiring that any contract disputes be settled by an arbitrator. Green Tree asked the court to revoke the class certification because the Federal Arbitration Act, it argued, did not permit class-wide arbitration. Instead, the arbitration would have to be conducted on a case-by-case basis. The South Carolina Supreme Court disagreed, ruling that, unless specifically banned in the contract, class-wide arbitration could be permitted by the courts.

Question

Does the Federal Arbitration Act permit class-wide arbitration hearings?

Media for Green Tree Financial Corp. v. Bazzle

Audio Transcription for Oral Argument - April 22, 2003 in Green Tree Financial Corp. v. Bazzle

Audio Transcription for Opinion Announcement - June 23, 2003 in Green Tree Financial Corp. v. Bazzle

William H. Rehnquist:

The opinion of the Court in No. 02-634, Green Tree Financial Corporation versus Bazzle will be announced by Justice Breyer.

Stephen G. Breyer:

I shall be announcing the judgment of the Court in this case and an opinion in which I am joined by Justice Scalia, Justice Souter, and Justice Ginsburg.

The case is about arbitration clauses in contracts that Green Tree, which is a commercial lender made with many of its customers.

The South Carolina Supreme Court held two things: first, it held that the contracts were silent on the question of whether the parties had agreed that arbitration could take the form of class arbitration rather like a class action where the named customer brings a suit representing a host of others.

Then it held that in no circumstances were the contracts are silent.

The arbitration can proceed as class arbitration.

We granted certiorari to determine whether the state court's decision is consistent with the Federal Arbitration Act.

Now, four of us, anyway got stuck at the threshhold.

We thought that the questions, whether the contracts are silent about class arbitration or whether instead as Green Tree said, they forbid it, is a threshhold question, and we think that was not really a question for the court, that was a question for the arbitrator.

So, we conclude that on that question, the arbitrator should have decided it independently but he did not.

So, we remand the case so that he can.

Now, the judgment of the Court of the South Carolina is therefore vacated, and it is remanded after further proceedings.

Justice Stevens has filed an opinion concurring in the judgment and dissenting in part.

The Chief Justice has filed a dissenting opinion in which Justice O'Connor and Justice Kennedy joined and Justice Thomas has filed a dissenting opinion.