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Monday, December 16, 2019

Arbitrator cannot decide class-wide status, appeals court rules

Lawsuits

By Karen Kidd | Oct 13, 2018

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The case centers around JPay, a Miami-based company that allows family to transfer money to inmates.

ATLANTA  — Arbitrators cannot decide if individuals have the right to a class-action proceeding, a federal appeals court ruled.

In the Sept. 19 decision, the 11th Circuit Court of Appeals ruled that an arbitration agreement can still allow for proceedings involving other aggrieved parties. The courts, not the arbitrator, has the authority to decide this, the three-judge panel found.

The case centers around JPay, a Miami-based company that allows family to transfer money to inmates. Two customers accused JPay of overcharging for the services and advised the court they planned to arbitrate for all customers overcharged by the company.

JPay argued the arbitration agreement between the company and customers delegates the authority of class-wide proceedings to the arbitrator. 

But the appeals court disagreed. 

“Because we will not compel anyone to arbitrate if we aren’t confident they have agreed to do so, we presume that parties would have expected a court to answer questions of arbitrability,” Judge Stanley Marcus wrote in the opinion.

Judge Charles R. Wilson also concurred. Judge James Graham wrote a partial dissent. 

"But I disagree with the majority’s conclusion that the language these parties used in their contract expressed a clear intent to permit the arbitrator to decide the question of the availability of class arbitration," Graham wrote. "I believe that a general delegation to arbitrate issues of arbitrability is not enough and that without a specific reference to class arbitration the court should presume that the parties did not intend to delegate to an arbitrator an issue of such great consequence."

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U.S. Court of Appeals for the Eleventh Circuit Miami Florida Division

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