On April 27, the U.S. Supreme Court reinterpreted the Federal Arbitration Act to forestall most class actions in arbitration. In Stolt-Neilsen v. Animalfeeds International Corp. , the Court — by a 5-to-3 vote (Justice Sotomayor did not participate) — upended the prevailing interpretations of class-action arbitration where the class treatment was based on agreements that are silent concerning the availability of class actions.
Prior to Stolt-Neilsen , the arbitration community, including the prestigious American Arbitration Association, relied upon the plurality opinion in Green Tree Financial Corp. v. Bazzle , 1233 S.Ct. 2402 (2003). There, a liberal policy favoring arbitration was affirmed by a divided court. Justice Breyer’s plurality opinion framed the issue as follows:
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