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Class-Action Arbitrations in Oil and Gas Leases
On Jan. 5, the U.S. Court of Appeals for the Third Circuit issued a decision answering the question of whether language in an arbitration clause referencing “the rules of the American Arbitration Association” was sufficient to rebut the presumption that the court, not the arbitrator, decided whether a class action arbitration was agreed to by the parties, as in Chesapeake Appalachia v. Scout Petroleum, No. 14-1275, 2016 U.S. App. LEXIS 42 (3d Cir. Jan. 5, 2016).
In a thorough opinion, the Third Circuit sided with the U.S. Court of Appeals for the Sixth Circuit and expressly declined to create a circuit split, ruling that under the Federal Arbitration Act as construed by U.S. Supreme Court precedent, references to the rules of the American Arbitration Association in an arbitration clause in an oil and gas lease were insufficient to “clearly and unmistakably” delegate the issue of class arbitrability to an arbitrator.
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