SPOILER ALERT! This post has a twist: it doesn’t concern an insurance case at all. (M. Night Shyamalan would be proud.) But it does concern interpretation of an arbitration agreement–something important to insurers and reinsurers alike.
In Jock v. Sterling Jewelers, the Second Circuit recently side-stepped the Supreme Court’s ruling in Stolt-Nielsen (which, as you may recall, all but created a bright-line rule that class actions aren’t available in arbitration unless the arbitration agreement says they are; silence just won’t cut it) in a crafty way: The Second Circuit held that a district court cannot substitute its own judgment regarding the interpretation of the parties’ arbitration agreement for that of the arbitrator. So, where the arbitrator determines that the the parties’ silence actually meant that they intended to preserve the ability for a claimant to seek class treatment, well, there’s nothing we can do about it. Clever, eh? (Unlike this.)
We’ll keep watching how courts continue to treat class issues in arbitration.