AMY TOTENBERG, District Judge.
This case is before the Court on Plaintiff Southern Communications Services, Inc., D/B/A SouthernLINC Wireless' ("SouthernLINC") Motion to Vacate [Doc. 1] two arbitration awards: a Clause Construction Award and a Class Determination Award. By issuing these two awards, the arbitrator answered two questions the parties submitted to him in turn: 1) whether their arbitration agreement authorizes class arbitration and 2) what class, if any, he should certify. The arbitrator determined first that the arbitration clause in the parties' agreement permits class arbitration and second that the class — including Defendant Derek Thomas, individually and on
Defendant Thomas contracted with Plaintiff SouthernLINC for cellular phone service in June 2005. (Demand [1-4] ¶ 32). As a condition of obtaining service from SouthernLINC, Thomas and other Customers were required to agree to a standard form contract (the "Agreement") including non-negotiable "Terms and Conditions" drafted by SouthernLINC. Id. at ¶ 16, Ex. A. This Agreement states that it is governed by Georgia law. Id. at Ex. A ¶ 18. The Agreement includes a clause requiring a Customer to pay a $200 early termination fee ("ETF") if he or she terminates the contract early. Id. at Ex. A ¶ 6. The Agreement also includes a clause requiring any disputes to be resolved through binding arbitration (the "Arbitration Clause"). Id. at ¶ 6, Ex. A ¶ 17. The Arbitration Clause specifies that the parties "will conduct the arbitration ... pursuant to applicable Wireless Industry Arbitration rules of the American Arbitration Association" (the "WIA Rules" of the "AAA"). Id. at ¶ 6, Ex. A ¶ 17.
In February 2008, Thomas cancelled his phone service before the end of the contract term and refused to pay the ETF, and SouthernLINC refused to waive this fee and threatened collection action. Id. at ¶ 33-34. On July 31, 2008, pursuant to the Arbitration Clause, Thomas filed a demand with the AAA on behalf of himself and the other Customers challenging the ETFs as illegal penalties. (Demand [1-4]).
As a threshold matter, the arbitrator's first duty was to determine whether the Arbitration Clause permitted class arbitration. He derived his authority to make this determination from the AAA's Supplementary Rules for Class Arbitrations ("Supplementary Rules"), which were incorporated by reference into the WIA Rules, which were specified by the Arbitration Clause. (Clause Const. Award [1-2] at 2). AAA Supplementary Rule 3 makes a "Clause Construction Award" the first step in any AAA class action proceeding and provides that "the arbitrator shall determine as a threshold matter, in a reasoned, partial final award on the construction of the arbitration clause, whether the applicable arbitration clause permits the arbitration to proceed on behalf of or against a class." Id.
The parties disputed whether the Arbitration Clause authorized this action to proceed on behalf of a class and submitted briefs for the arbitrator's consideration: the Customers filed a Motion; SouthernLINC filed a Brief in Opposition; the Customers filed a Reply; and both parties filed supplemental briefs following the arbitrator's request. Id. at 1. Discovery and briefings continued for over six months. The parties did not dispute the arbitrator's jurisdiction to decide this issue. Id. at 2.
The crux of this dispute was whether the parties intended to permit class proceedings. The parties argued their opposing positions regarding their intent in their briefs to the arbitrator and submitted to his authority to render a decision on this issue. The Customers argued that "there is no evidence of any mutual intent to prohibit class arbitration." (Claimant's Reply Supp. Mot. Prelim. Clause Const. Award [1-10] at 2). Conversely, SouthernLINC argued that "the parties' [sic] intended
On April 2, 2009, the arbitrator issued a Clause Construction Award after finding that the Arbitration Clause permitted class arbitration. Id. at 4. He concluded that "class arbitration is permitted by the arbitration clause under Georgia authority on class arbitrations, United States Supreme Court precedent on arbitration, and Georgia rules of contract construction." Id. at 4. The arbitrator recognized that "prior unconfirmed clause construction awards have little precedential value for purposes of this Clause Construction Award." Id. Instead, he based his decision "solely upon [his] analysis of the facts and law applicable to the parties' Agreement here." Id.
The arbitrator began his analysis of the Agreement by recognizing that Georgia law applies and that "a fundamental principle of contract construction is that a contract is to be construed against the drafter," Id. at 5, citing Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 62-63, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995) ("[A] court should construe ambiguous language against the interest of the party that drafted it. ... [The drafter of] an ambiguous document ... cannot ... claim the benefit of the doubt. The reason for this rule is to protect the party who did not choose the language from an unintended or unfair result."); see also Dept. of Community Health v. Pruitt Corp., 295 Ga.App. 629, 673 S.E.2d 36, 39 (2009) ("Another rule of construction requires us to construe ambiguous contract provisions against the drafter. ..."). The arbitrator reasoned that to reject the Customers' argument that they intended to authorize class arbitration would "effectively impute an intent to the non-drafters to give up unknown rights that were not expressly disclosed or discussed in the contract." (Clause Const. Award [1-2] at 5). Following this contract construction analysis under Georgia law, he concluded that there was no intent to bar arbitration and that "Georgia contract law ... permits class arbitration."
The arbitrator further reasoned that to reject the Customers' argument that they intended to authorize class arbitrations would effectively deny them the ability to vindicate their rights under Georgia law, citing Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir.2007). In Dale, customers brought a class action against Comcast Corporation to recover for its alleged failure to pass through cost savings resulting from decreased franchise fees to its customers,
For over a year after the arbitrator issued the Clause Construction Award, the parties conducted discovery and submitted briefs regarding class determination. On June 24, 2010, the arbitrator issued a Class Determination Award, finding that the Customers had met the criteria for class arbitration and certifying the following class: "All consumer subscribers to SouthernLINC's wireless telephone service pursuant to contracts which include an early termination fee provision, and who paid or have been charged an early termination fee by SouthernLINC after July 31, 2004."
After the Supreme Court issued its decision in Stolt-Nielsen v. AnimalFeeds Int'l Corp., ___ U.S. ___, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010), SouthernLINC asked the arbitrator to reconsider his decision in light of that case, and the parties submitted briefs to him during July and August 2010. (Ruling Resp. Mot. Recons. [14-1] at 1). The arbitrator decided that he had no jurisdiction to reconsider the Clause Construction Award, and that "even if such jurisdiction existed ... the Clause [Construction] Award satisfies the rigorous standards set forth in Stolt-Nielsen." Id. at 2. He pointed out that "[e]ven before Stolt-Nielsen, [he] sought to perform the rigorous analysis that Stolt-Nielsen imposed." Id. He concluded that the Clause
On September 17, 2010, SouthernLINC filed this motion to vacate both the Clause Construction Award and the Class Determination Award on the grounds that the arbitrator exceeded his authority by issuing each of these awards [Doc. 1].
As a threshold matter, the Customers argue that SouthernLINC is precluded from moving to vacate the Clause Construction Award (where the arbitrator determined that class arbitration was authorized by the Agreement) because it was ripe for review in April 2009 and SouthernLINC should have moved to vacate it prior to the issuance of the Class Determination Award (which certified the class). Section 12 of the FAA provides that "[n]otice of a motion to vacate, modify, or correct an award must be served upon the adverse party or his attorney within three months after the award is filed or delivered." 9 U.S.C. § 12. Section 12 effectively creates a three month statute of limitations for filing a motion to vacate an arbitral award.
The Customers argue that Section 12 applies to the Clause Construction Award and that SouthernLINC's failure to move to vacate this award within three months of its issuance bars the Court from considering its motion. However, SouthernLINC points out that courts have considered Clause Construction Awards "partial awards" that do not become final and subject to review until the arbitrator issues a Class Determination Award, citing Dealer Computer Servs. v. Dub Herring Ford, 547 F.3d 558 (6th Cir.2008) (holding that Clause Construction Award was not yet ripe but could be reviewed after issuance of Class Determination Award); see also Stolt-Nielsen, 130 S.Ct. at 1779 (Ginsberg, J., dissenting) (prior to Stolt-Nielsen ruling, the Supreme Court had never before considered a "partial award" such as a Clause Construction Award to be ripe for review). The Customers cite no authority specifically indicating that Section 12 applies to a Clause Construction Award. Instead, they argue that because the Supreme Court found in Stolt-Nielsen that a Clause Construction Award was ripe for review prior to issuance of a Class Determination Award, SouthernLINC had three months from the issuance of the Clause Construction Award to move to vacate it. The Supreme Court did not address whether § 12 applies to Clause Construction Awards following its Stolt-Nielsen decision.
It is not entirely clear whether Stolt-Nielsen subjects Clause Construction Awards to the three month limitation imposed by § 12. For purposes of the present case, it is sufficient that § 12 did not apply to the Clause Construction Award when it was issued on April 2, 2009, which was over a year before Stolt-Nielsen was decided. Even if Stolt-Nielsen did create a new rule applying § 12 to Clause Construction Awards — a question this Court need not answer — it did not apply when the Clause Construction Award was issued a year prior. Therefore, the Court assumes without deciding that SouthernLINC's motion to vacate was timely.
SouthernLINC argues that the court should vacate the Clause Construction Award because the arbitrator exceeded his authority by allowing this case to proceed as a class arbitration when the written Agreement does not affirmatively authorize
It is undisputed that the Federal Arbitration Act (the "FAA"), 9 U.S.C. § 1 et seq., applies to this case. The FAA "imposes a heavy presumption in favor of confirming arbitration awards." Riccard v. Prudential Ins. Co., 307 F.3d 1277, 1288 (11th Cir.2002) (citation omitted). The Court must give the arbitrator's decision great deference.
"Sections 10 and 11 of the FAA, 9 U.S.C. §§ 10, 11, provide the exclusive means by which a federal court may upset an [arbitrator's] award." White Springs Agric. Chemicals, Inc. v. Glawson Investments Corp., 660 F.3d 1277, 1280 (11th Cir.2011) (citing Hall St., 552 U.S. at 586, 128 S.Ct. 1396). Section 10 only permits a district court to vacate an award upon limited specified grounds:
9 U.S.C. § 10(a). Section 11 empowers a district court to modify an arbitral award "[w]here the arbitrators have awarded upon a matter not submitted to them." 9 U.S.C. § 11(b); White Springs, 660 F.3d at 1280 (11th Cir.2011). "Because these Sections are the exclusive means for upsetting an arbitration award, [an arbitrator's] incorrect legal conclusion is not grounds for vacating or modifying the award." Id. In the Eleventh Circuit, even when an arbitrator manifestly disregards the law, a district court has no jurisdiction to vacate the award.
For purposes of SouthernLINC's motion, the relevant statutory grounds for vacatur are where "the arbitrators exceeded their powers." 9 U.S.C. § 10(a)(4). In order to prove that the arbitrator exceeded his power, SouthernLINC "must clear a high hurdle" because "[i]t is not enough" to show that the arbitrator "committed an error — or even a serious error." Stolt-Nielsen, 130 S.Ct. at 1767. "[T]he interpretations of the law by the arbitrators ... are not subject, in the federal courts, to judicial review for error in interpretation." Wilko v. Swan, 346 U.S. 427, 436-437, 74 S.Ct. 182, 98 L.Ed. 168 (1953), overruled on other grounds by Rodriguez de Quijas v. Shearson/American Exp., Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989). "It is only when an arbitrator strays from interpretation and application of the agreement and effectively `dispenses his own brand of industrial justice' that his decision may be unenforceable." Stolt-Nielsen, 130 S.Ct. at 1767 (internal citations omitted).
Therefore, the question before the Court is not whether the arbitrator erred while applying Georgia law when finding that the class arbitration was implicitly authorized under the Agreement, but whether he exceeded his powers and dispensed his own brand of industrial justice by straying from interpretation and application of the Agreement in light of applicable law.
Agreements to arbitrate disputes are contractual and "a matter of consent, not coercion." Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989). As private dispute resolution is consensual by nature, "parties are generally free to structure their arbitration agreements as they see fit." Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57, 115 S.Ct. 1212, 131 L.Ed.2d 76 (1995). Under certain circumstances, a party may be able to preclude class proceedings by including explicit terms in its arbitration agreement. See AT & T Mobility LLC v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740, 1746-47, 179 L.Ed.2d 742 (2011) (holding that California
As arbitration is contractual, "a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so." Id. at 1775. However, federal law is silent on "what contractual basis may support a finding that the parties agreed to authorize class-action arbitration." Id. at 1776 n. 10. Generally, when determining parties' intent, the tribunal "should apply ordinary state-law principles that govern the formation of contracts." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). Under ordinary state-law contract formation principles, a party need not specify every term of the contract — some terms may be implied by operation of law. See Restatement (Second) of Contracts § 5(2) (1981) ("A term of a contract is that portion of the legal relations resulting from the promise or set of promises which relates to a particular matter, whether or not the parties manifest an intention to create those relations.") (emphasis added); id. at cmt. b (implied terms of an agreement "are sometimes stated in terms of presumed intention"). Clearly, presumed or implicit intent to authorize class arbitration cannot be inferred "solely from the fact of the parties' agreement to arbitrate." Stolt-Nielsen, 130 S.Ct. at 1758. (emphasis added). A tribunal must identify a "default rule" if it is to conclude that the parties implicitly authorized class arbitration. Id. at 1768-69.
When interpreting an arbitration agreement, an arbitrator may not impose personal policy preferences on the parties. An arbitrator's award construing an agreement to permit class arbitration may be vacated when he exceeds his power and dispenses his own brand of industrial justice by imposing policy preferences instead of identifying and applying a "default rule" under applicable law governing contract interpretation.
In Stolt-Nielsen, a group of animal feed suppliers filed a demand for class arbitration to resolve a dispute with a shipping company over purported price-fixing.
Although the Supreme Court did not specifically address the "manifest disregard" standard,
Furthermore, the majority opinion pointed out that the arbitrators may never have had the power to determine the parties' intent at all. The court stated that the arbitrators "had no occasion to `ascertain the parties' intention' ... because the parties were in complete agreement regarding their intent." Id. at 1758. (emphasis added). Before submitting the question of whether class arbitration was permitted to the arbitrators, the parties had stipulated that there was "no agreement" reached on that issue. Id. at 1776. "This stipulation left no room for an inquiry regarding the parties' intent, and any inquiry into that settled question would have been outside the panel's assigned task." Id. at 1770. As the arbitrators attempted to ascertain intent which had already been stipulated and then imposed their personal policy preferences instead of applying a rule of law governing contract interpretation, they exceeded their powers, and vacatur was warranted.
In the present case, SouthernLINC argues that as the written Agreement was silent regarding class arbitration, the Supreme Court's decision in Stolt-Nielsen compels the conclusion that this silence precludes class arbitration and therefore the arbitrator exceeded his authority by deciding otherwise. (Pl.'s Br. Supp. Mot. Vacate Clause Const. and Class Determ. Awards [1-1] at 15-18). SouthernLINC argues that Stolt-Nielsen establishes a bright-line rule that a company must affirmatively authorize class arbitration in its mandatory contracts with customers, and in the absence of such express authorization, class proceedings are automatically precluded. Id.
To persuade the Court to accept its interpretation, SouthernLINC directs the Court to two district court cases in other
In Jock, several employees brought an arbitration claim against their employer and submitted the question of whether their arbitration agreement allowed for class arbitration to the arbitrator. Jock, 646 F.3d at 116. Noting that the question of intent is "problematic in the context of a contract of adhesion," the arbitrator construed the contract in accordance with Ohio law, as required by the terms of the agreement, and interpreted the contract against its drafter. Id. at 117. The arbitrator cited Ohio case law providing that "the law will not insert by construction for the benefit of one of the parties an exception or condition which the parties either by design or neglect have omitted from their own contract." Id. (citing Montgomery v. Bd. of Educ. of Liberty Township, Union Cty., 102 Ohio St. 189, 193, 131 N.E. 497 (1921)) (punctuation omitted). Based on this applicable law, the arbitrator determined she would not read into the agreement intent to prohibit class claims. Id.
The employer then moved to vacate the arbitral award. Id. at 117. The district court denied the motion, holding that the arbitrator did not exceed her power by reaching the issue of whether the arbitration agreements prohibited class proceedings and that her decision was not made in manifest disregard of the law. Id. at 117-18. After the Supreme Court decided Stolt-Nielsen, the employer moved in the district court for relief from its order. Id. at 118. The district court held that if its jurisdiction were restored, it would reconsider its order and vacate the arbitrator's
After SouthernLINC submitted its briefings in the present case pointing to the district court's reconsidered decision in Jock as persuasive authority, the Second Circuit reversed that decision and confirmed the arbitrator's award, holding that she did not exceed her authority by concluding that the agreement authorized class arbitration. Jock, 646 F.3d at 127. The circuit court held that the district court had erred by focusing "on whether the arbitrator had correctly interpreted the arbitration agreement itself" rather than on whether she had the authority to render her interpretation. Id. at 123. The circuit court reasoned that under the appropriate standard of review, it is not for the district court to decide whether the arbitrator "`got it right' when the question has been properly submitted to the arbitrator and neither the law nor the agreement categorically bar her from deciding that issue." Id. at 124 (citation omitted). According to the circuit court's opinion, "[b]y re-examining the record to determine the question that the arbitrator had already decided," the district court erred by "substitut[ing] its legal reasoning for the arbitrator's." Id. at 126.
In Jock, as in the present case, the party moving to vacate the arbitration award argued that the lack of an explicit authorization of class arbitration in the agreement made an award allowing class arbitration impossible after Stolt-Nielsen. The Second Circuit rejected this argument, pointing out that Stolt-Nielsen "did not create a bright-line rule requiring that arbitration agreements can only be construed to permit class arbitration where they contain express provisions permitting class arbitration." Id. at 124 (citing Stolt-Nielsen, 130 S.Ct. at 1776 n. 10 ("We have no occasion to decide what contractual basis may support a finding that the parties agreed to authorize class-action arbitration.")). According to the Second Circuit, "Stolt-Nielsen does not foreclose the possibility that parties may reach an implicit — rather than express — agreement to authorize class-action arbitration." Id. at 123 (internal quotes and citation omitted).
In holding that the arbitrator did not exceed her authority, the court first concluded that the arbitrator had the power to ascertain whether the parties implicitly authorized class arbitration because the parties submitted that question to the arbitrator for her determination. Id. at 123-24. The court distinguished Stolt-Nielsen on the facts because although the plaintiffs at one point conceded the agreement was silent regarding class arbitration, this "was not the same thing as stipulating the parties had reached no agreement on the issue... and there is no escaping the fact that the parties submitted that question to the arbitrator for a decision." Id. at 123-24. The court then concluded that the arbitrator did not exceed her power when making that determination because she did not impose her personal policy preference — instead she looked to applicable law governing contract interpretation. Id. at 125-26. Accordingly, the court held that the district court erred in holding it would vacate the arbitral award because "whether the arbitrator was right or wrong in her analysis, she had the authority to make the decision, and the parties to the arbitration are bound by it." Id. at 127.
This Court finds the Second Circuit's interpretation of Stolt-Nielsen to be far more persuasive and legally sound than
In the present case, the Court must determine 1) whether the arbitrator exceeded his power by considering issues beyond those the parties properly submitted for his consideration, and 2) whether he exceeded his power by imposing his personal policy preferences rather than inquiring whether applicable law provides an appropriate default rule in this situation. As to the latter inquiry, the distinction is clear: when arbitrators ignore the law and rely solely on policy when interpreting an arbitration agreement — as in Stolt-Nielsen — they exceed their power, but when they identify applicable law to guide their inquiry — as in Jock — district courts have no jurisdiction under the FAA to vacate their awards.
To determine whether the arbitrator in the present case exceeded his power to interpret the Agreement, the Court must necessarily identify the scope of his authority. Generally, the question of whether an arbitration agreement authorizes class arbitration is a "matter of contract interpretation [and] should be for the arbitrator, not the courts, to decide." Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 453, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003). More importantly, the parties here specifically granted the arbitrator the power to interpret their agreement and decide whether it authorized class arbitrations, both in writing and by their conduct.
First, the Agreement itself bestowed the power to determine the question of implicit class arbitration authorization upon the arbitrator. "Because arbitrators derive their powers from the parties' agreement, we look to the terms of the governing arbitration clause to determine the powers of the [arbitrator]." White Springs Agric. Chemicals, Inc. v. Glawson Investments Corp., 660 F.3d 1277, 1281 (11th Cir.2011) (punctuation and citation omitted). The Arbitration Clause in the Agreement provided that "[t]he parties will conduct the arbitration in Atlanta, Georgia pursuant to applicable Wireless Industry Arbitration Rules of the American Arbitration Association." (Pl.'s Br. Supp. Mot. Vacate Clause Const. and Class Determ. Awards [1-1] at 5). Thus, the AAA Wireless Industry Arbitration Rules (the "WIA Rules") were incorporated into the Agreement by reference. The WIA Rules incorporate the AAA Supplementary Rules for Class Arbitrations, which gave the arbitrator the
Furthermore, the parties both consented to the arbitrator's jurisdiction to decide the issue of their intent, which was contentiously disputed, by submitting this dispute to the arbitrator for resolution. SouthernLINC argued to him that the parties intended to prohibit class actions, and the Customers argued that the parties intended to authorize class actions. (See Resp. Br. Opp. Claimant's Mot. Prelim. Clause Const. Award [1-11] at 3; Claimant's Reply Supp. Mot. Prelim. Clause Const. Award [1-10] at 2). Both parties submitted extensive briefs in support of their opposing positions regarding whether or not they intended to implicitly authorize class arbitration.
Most strikingly, SouthernLINC explicitly recognized the arbitrator's authority to decide the question of intent and insisted that he do so, asserting in its brief to the arbitrator that he "must examine the parties' contract to determine their intention."
Having determined that the arbitrator had the power to decide whether the parties implicitly authorized class arbitration, the Court must determine whether he exceeded that power by imposing his personal policy preferences rather than inquiring whether applicable law governing contract interpretation provides an appropriate default rule in this situation. He did not.
The arbitrator's proper task was to apply contract interpretation principles in order to arrive at his conclusion, which is exactly what he did. Prior to the arbitrator's ruling, SouthernLINC reminded him of his duty to apply ordinary contract law principles to resolve the dispute, stating that "[e]ven if this tribunal interpreted the arbitration agreement as `silent' on class arbitration, the issue of the parties' intention is still one of state law contract interpretation." (Resp. Br. Opp. Claimant's Mot. Prelim. Clause Const. Award [1-11] at 3 (citing Bazzle, 539 U.S. at 450, 123 S.Ct. 2402)); see also Jock, 646 F.3d at 126 (confirming that when the "agreement contains what is argued to be an implicit agreement to submit to class arbitration, the arbitrator must necessarily look to state law principles of contract interpretation in order to divine whether such intent exists" (citing Stolt-Nielsen, 130 S.Ct. at 1773, 1775)). Instead of assuming that class arbitration is permitted or barred, "when there is no express authorization of class proceedings the arbitrators' proper task [is] to identify the rule of law governing in that situation." Stolt-Nielsen, 130 S.Ct. at 1762.
The arbitrator in the present case engaged in the exact analysis Stolt-Nielsen requires. Unlike the arbitrators in Stolt-Nielsen, the arbitrator in the present case identified generally applicable contract law principles to determine whether the parties implicitly authorized class arbitration. He explicitly rejected the approach taken by the arbitrators in Stolt-Nielsen and refused to consider what other arbitrators had done in similar situations. He did not assume that the parties intended to authorize class arbitration solely because they agreed to arbitrate disputes. Instead, he identified legal principles governing the situation: state law governing contract formation and interpretation. By engaging in this analysis and not relying on assumptions and personal policy preferences, the arbitrator here — similarly to the arbitrator in Jock — satisfied Stolt-Nielsen's requirements and did not exceed his power.
SouthernLINC urges the Court to reject the arbitrator's reasoning and vacate his award. It argues that the arbitrator's award should be vacated because 1) he erred when applying Georgia contract law and interpreting the Agreement against its drafter instead of assuming the Agreement's silence precluded class arbitration, 2) he misinterpreted the Agreement, and 3) he "misapplied" the doctrine of unconscionability when interpreting the Agreement. (Pl.'s Reply Supp. Mot. Vacate Clause Const. and Class Determ. Awards [11] at 9-10).
All three of these arguments would bestow jurisdiction on this Court to vacate the arbitrator's award based on a common flawed premise: that the arbitrator
SouthernLINC's first argument fails because, as explained above, the arbitrator properly looked to Georgia law governing contract interpretation and reached the conclusion that the Agreement implicitly authorized class arbitration pursuant to Georgia law. This Court cannot now second-guess the arbitrator's interpretation and application of the law to the Agreement because the question before the Court is whether he identified a rule of law to govern the interpretation of the contract, not whether he got it right.
SouthernLINC's second argument — that a 90-day time limitation included in the Agreement indicates that it did not intend to authorize class arbitrations
SouthernLINC's third argument — that the arbitrator "misapplied" the doctrine of unconscionability when interpreting the Agreement — also fails for the same reason. SouthernLINC argues in a notice of supplemental
Considering the extremely limited grounds for vacatur allowed by 9 U.S.C. § 10(a)(4), this Court has no authority to substitute its reasoning for that of the arbitrator. If district courts were to review every arbitral award for flaws in legal reasoning, the ensuing flood of litigation would be overwhelming. The premise that district courts can and should second-guess arbitrators' legal reasoning is fundamentally at war with the FAA's "national policy favoring arbitration with just the limited review needed to maintain arbitration's essential virtue of resolving disputes straightaway." Hall St., 552 U.S. at 577, 128 S.Ct. 1396 (citation omitted). Accordingly, this Court has no jurisdiction under the FAA to vacate the Clause Construction Award.
SouthernLINC also argues that the arbitrator "exceeded his authority" by certifying a class that did not comply with the criteria set forth in Rule 4 of the AAA Supplemental Rules for Class Arbitration (SRCA).
SouthernLINC cites no authority indicating that a district court has the authority to vacate an arbitral award where the court disagrees with how the arbitrator applied the appropriate rules, and this Court has found none. Just as SouthernLINC's attack on the Clause Construction Award is primarily based on the proposition that the arbitrator "got it wrong," SouthernLINC asks this Court to review the arbitrator's decision as an appellate court would review a lower court decision. This Court has no such authority under Section 10(a)(4) of the FAA. As SouthernLINC simply argues that the arbitrator erred in applying the appropriate rule and fails to show how the arbitrator exceeded his authority in certifying the class, the Court has no basis to conclude that the FAA authorizes it to vacate the Class Determination Award.
For the foregoing reasons, SouthernLINC's motion to vacate the arbitrator's Clause Construction Award and Class Determination Award [Doc. 1] is