White & Case Wins Crucial US Supreme Court Victory in Stolt-Nielsen v. AnimalFeeds

Washington, DC, April 27, 2010 ... The Supreme Court of the United States issued its decision today in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., No. 08-1198, 559 U.S. ___ (2010). In a complete and total victory for White & Case client Stolt-Nielsen, the Court denied class arbitration of antitrust claims, squarely holding that the Federal Arbitration Act (FAA) does not permit arbitrators to impose class-action arbitration on parties whose arbitration agreement undisputedly is silent on the question of class arbitration.

The US Supreme Court held that the FAA supplies the rule of decision prohibiting class arbitration in the absence of agreement by the parties: "[A] party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so. In this case, however, the arbitration panel imposed class arbitration even though the parties concurred that they had reached 'no agreement' on that issue . . . . The panel's conclusion is fundamentally at war with the foundational FAA principle that arbitration is a matter of consent."

"The Stolt-Nielsen ruling's impact will be felt in future antitrust arbitration cases, as well as in other areas of substantive law. Class arbitration is one of the most hotly contested legal issues of the new decade," said Hugh Verrier, Chairman of White & Case. "This decision is another cutting-edge legal victory by our antitrust group."

Today's decision was a sweeping endorsement of Stolt-Nielsen's argument before the high court, the Court holding: "We think that the differences between bilateral and class-action arbitration are too great for arbitrators to presume, consistent with their limited powers under the FAA, that the parties' mere silence on the issue of class-action arbitration constitutes consent to resolve their disputes in class proceedings."

The Opinion was released today, April 27, 2010.

Stolt-Nielsen was represented in the Supreme Court by Christopher M. Curran, J. Mark Gidley, Peter J. Carney, Eric Grannon and Charles C. Moore.

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