Delay of “class” arbitration denied
on Feb 19, 2009 at 3:08 pm
Supreme Court Justice Ruth Bader Ginsburg refused on Thursday to put on hold a federal appeals court ruling that permits arbitration of an ocean shipping dispute to go forward as a class proceeding. The Justice issued no opinion in simply denying a stay application (08A714) in Stolt-Nielsen SA, et al., v. AnimalFeeds International. (Justice Ginsburg, the Circuit Justice for the Second Circuit, was working from home while recovering from surgery. She is expected to be on the bench for oral arguments next Monday.)
Four international shipping companies, noting that the Supreme Court has twice before agreed to rule on the legality of using a class approach to arbitration without the two sides’ consent, urged Justice Ginsburg to delay a Second Circuit Court ruling while the companies pursue an appeal to the Supreme Court. The companies said neither of the prior Supreme Court cases on class arbitration settled the legality of that approach, because of legal complications.
The companies were among a group that provides cargo services for shipping liquid chemicals. They were sued in federal court by AnimalFeeds International Corp., claiming that they were engaged in a global conspiracy to fix prices for shipping liquid chemicals in violation of federal antitrust law. The Second Circuit in 2004 ordered the case to go to arbitration..
In its latest ruling in the case, last November, the Second Circuit ruled that it does not violate federal arbitration law to proceed as a class when the underlying arbitration pact is silent on that question. as in this case.
AnimalFeeds sought to go into the arbitration representing a class of all direct buyers of “parcel tanker transportation services” for moving bulk liquid chemicals and other specialty liquids “at any time during the period from August 1, 1998, to November 30, 2002.”
The shipping companies, in their plea for delay pending their planned “expeditious” appeal to the Justices, argued that without a stay they “will be forced to begin class-arbitration proceedings in a complex antitrust case that will impose immediate, substantial, and irretrievable costs and burdens, even though the parties never agreed to class arbitration.”
The application also argued that the lower courts are in disagreement over how to interpret the Supreme Court’s decision in 2003 in Green Tree Financial Corp. v. Bazzle, a case testing class arbitration. The Court decided that case on other grounds, without producing a majority of Justices for any one position.
