Arbitrator Exceeded Authority in Ordering Class Arbitration, 5th Cir. Rules

Arbitration

NEW ORLEANS — An arbitrator erred in compelling class arbitration of a dispute between an online university and a former student because the enrollment agreement did not specifically call for class arbitration, the 5th Circuit U.S. Court of Appeals has ruled. Reed v. Florida Metropolitan University Inc., No. 11-50509 (5th Cir.).

On May 18, the appellate court found the arbitrator’s decision contravenes Stolt-Nielsen S.A. v. AnimalFeeds International Corp., because there was no contractual basis upon which to conclude that the parties agreed to authorize class arbitration.

“At most, the agreement in this case could support a finding that …