Stolt-Nielsen v. Animalfeeds International Corp.

PETITIONER: Stolt-Nielsen S.A., et al.
RESPONDENT: AnimalFeeds International Corp.
LOCATION: U. S. Capitol Building

DOCKET NO.: 08-1198
DECIDED BY: Roberts Court (2009-2010)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 559 US 662 (2010)
GRANTED: Jun 15, 2009
ARGUED: Dec 09, 2009
DECIDED: Apr 27, 2010

ADVOCATES:
Cornelia Tl Pillard - on behalf of the respondent
Seth P. Waxman - for the petitioners

Facts of the case

AnimalFeeds International Corp. on behalf of a class of plaintiffs filed suit in a Pennsylvania federal district court against Stolt-Nielsen among others alleging defendants were engaged in a "global conspiracy to restrain competition in the world market for parcel tanker transportation services." After the case was transferred to the Connecticut federal district court, Stolt-Nielsen filed a motion to compel arbitration, which was denied. On appeal, the U.S. Court of Appeals for the Second Circuit reversed. During arbitration, AnimalFeeds filed a demand to proceed as a class. A panel was appointed to determine whether the language of the Clause Construction Award permitted AnimalFeeds to proceed as a class and answered in the affirmative. Stolt-Nielsen then petitioned the Connecticut federal district court to vacate the panel's determination, which was granted.

On appeal, the U.S. Court of Appeals for the Second Circuit reversed and reinstated the panel's decision. The court held that the arbitration panel did not manifestly disregard the law when reaching its conclusion that the Clause Construction Award permitted AnimalFeeds to proceed as a class, even though the Award was silent on whether proceeding as a class was permitted. The court reasoned that when parties agree to arbitrate, the question of whether an agreement permits class arbitration is generally left to the arbitrators, not the courts.

Question

Is imposing class arbitration on parties whose arbitration clauses are silent on that issue consistent with the Federal Arbitration Act?

Media for Stolt-Nielsen v. Animalfeeds International Corp.

Audio Transcription for Oral Argument - December 09, 2009 in Stolt-Nielsen v. Animalfeeds International Corp.

Audio Transcription for Opinion Announcement - April 27, 2010 in Stolt-Nielsen v. Animalfeeds International Corp.

John G. Roberts, Jr.:

Justice Alito has our opinion this morning in case 08-769 Stolt-Nielsen versus Animal Feeds International.

Samuel A. Alito, Jr.:

This case comes to us on writ of certiorari to the United States Court of Appeals for the Second Circuit.

It involves complicated arbitration issues, and so for present purposes, it suffices to say that we hold that imposing class arbitration on parties who have agreed to arbitrate their disputes but have not agreed to authorize class arbitration is not consistent with the Federal Arbitration Act.

We therefore reverse and remand.

Justice Ginsburg has filed a dissenting opinion in which Justices Stevens and Breyer have joined.

Justice Sotomayor took no part in the consideration or decision of this case.