The Second Circuit ruled on election day that the plaintiffs in the long-running Parcel Tanker antitrust litigation could seek to proceed on a class-wide basis before the arbitration panel overseeing the case. This sends a strong indication that the trend toward courts and arbitrators permitting class arbitration is likely to continue.
The decision is here: Download parcel_tanker_2d_cir.pdf
The case was brought in federal district court by direct purchasers of parcel tanker transportation services globally against parcel tanker companies, alleging a global conspiracy to restrain competition in the world market for parcel tanker shipping services. Parcel tankers are special ships designed to transport certain speciality liquids, such as chemicals, edible oils, and acids.
After the suit was filed, the defendants convinced the Second Circuit (on appeal from an earlier ruling) that the parties' shipping transactions were governed by contracts with enforceable agreements to arbitrate and that the antitrust claims were arbitrable. The arbitration clauses in question were silent, however, on whether arbitration may proceed on a class-wide basis.
Plaintiffs filed a demand for class arbitration, and the panel determined that the arbitration clauses permitted class arbitration. The defendants petitioned the district court to vacate the ruling, arguing that it showed a "manifest disregard" for the law. The district court agreed and vacated the ruling. However, on appeal, the Second Circuit has now upheld the panel's ruling. The case (which my firm but not me) works on, will now go back to the panel, which will decide whether, in fact, the case should be arbitrated on a class-wide basis.
In a context where companies are seeking to slip arbitration clauses ever more widely into contracts with purchasers, the Second Circuit's ruling importantly affirms that the arbitration proceeding can accomodate class-wide relief.