Reinsurance Focus

A court has recently compelled arbitration in a pending putative class action lawsuit, based on the U.S. Supreme Court’s AT&T Mobility LLC v. Concepcion decision. The case involved a class action suit against title insurers for alleged price fixing. After the case had proceeded “for some time,” Concepcion was decided, which held that (1) the FAA preempts various state laws that invalidate arbitration agreements and that (2) courts must compel arbitration even in the absence of the opportunity for plaintiffs to bring their claims as a class action. The defendants then moved to compel arbitration. Plaintiffs resisted, arguing that the holding of Concepcion was limited to arbitration agreements that contained an express waiver of class treatment (the agreements in this case were silent on class issues). Plaintiffs contended that defendants had never been barred from seeking class arbitration previously, and had thus waived their right to seek arbitration at that late-stage of the litigation. The court disagreed and compelled arbitration, holding that a demand for class arbitration would have been futile prior to Concepcion due to the Supreme Court’s Stolt-Nielsen decision, which precluded class arbitration unless there was “a contractual basis for concluding that the party agreed to do so.” There may be further decisions sorting out the interplay between these two Supreme Court decisions. In re California Title Insurance Antitrust Litigation, Case No. 08-01341 (USDC N.D. Cal. June 27, 2011).

This post written by Michael Wolgin.