April 19, 2013

PLF amicus brief urges WA Supreme Court to respect freedom of contract

By Anastasia P. Boden Attorney

This week PLF filed an amicus brief in the Washington Supreme Court in Hill v. Garda CL, arguing that class arbitration cannot be imposed on parties merely because they agreed to individual arbitration.  As the U.S. Supreme Court recognized in Stolt-Nielsen v. AnimalsFeeds, the differences between individual and class arbitration are so great that one cannot infer consent to the latter from consent to the former.  In Stolt-Nielsen, both parties agreed that their silence on the issue meant there had been no “meeting of the minds” with regard to class arbitration.  Because the parties agreed on this point, the Court found it could not impose class arbitration where there was no consent.  Hill is one of the many follow up cases to Stolt-Nielsen that grapples with the question of what courts should do in the face of silence where the parties do not stipulate what their silence means.  This filing is one in a long list of PLF’s work in the area of freedom of contract.

In Hill, a group of armored vehicle workers brought suit against Garda alleging violations of the state labor provisions.  Garda moved to compel arbitration pursuant to the parties’ collective bargaining agreement.  The trial court certified the class of employees despite that the agreement was completely silent on the issue of class arbitration.  The appellate court reversed, finding that where parties are silent on the issue of class arbitration, courts are foreclosed from inferring consent.

As PLF argues in its brief, when parties agree to class arbitration, they trade the procedural formalities of litigation for the informality, expedition, and efficiency that class arbitration provides.  But because those rules of procedure protect the parties due process rights, a waiver of those rules requires express and unequivocal consent.  Implying a waiver from silence threatens the due process rights of the parties, especially the class members, who do not directly participate in the litigation.

Despite the Supreme Court’s mandate in Stolt-Nielsen and other recent cases like AT&T v. Concepcion, courts continue to thwart the parties’ intentions in entering into arbitration agreements.  In Hill, PLF urges the Washington Supreme Court to follow the U.S. Supreme Court’s mandate that contract is “a matter of consent, not coercion.”

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