Reinsurance Focus

This dispute relates to whether a district court has authority to make a class arbitration determination based on agreements entered into between the respective parties. The court concluded that only the arbitrator had authority to determine whether the arbitration provisions permitted class arbitration.

Respondents filed a class action complaint with the American Arbitration Association against Petitioner, Scout, alleging that Scout failed to properly compensate respondents pursuant to agreements signed between the parties and deceived respondents by engaging in unlawful business practices. All parties are involved in publishing information about high school, college, and professional sports. The complaint was filed on behalf of approximately 300 persons, companies, or other entities that owned or provided content for a website owned by Scout.

Respondents filed a ‘clause construction’ motion with the AAA arbitrator, seeking a ruling that class arbitration was authorized. Scout requested a stay and filed the present petition requesting the district court stay the class proceeding and compel respondents to pursue their arbitration claims individually. Recognizing that the Supreme Court, in Green Tree v. Bazzle, was faced with an arbitration provision that was silent on the issue of whether class arbitration was permitted, the district court concluded that the “dispositive issue before this Court is whether Green Tree applies to the facts of this case.” The court concluded that the present case was factually analogous and granted respondent’s motion to dismiss, leaving the question of whether to permit class arbitration to the arbitrator. Scout.com v. Bucknuts, Case No. 07-1444 (USDC W.D. Wash. Nov. 16, 2007).

This post written by Lynn Hawkins.