Recently, in Nathan Robinson and Misti Robinson v. Home Owners Management Enterprises Inc. the Texas Supreme Court addressed whether a court or arbitrator is entitled to decide a dispute over whether the parties agreed to arbitrate particular claims. The Plaintiffs in this case were homeowners, and they originally brought suit for construction defect damages by the Defendant. The terms of the warranty contract required that all warranty issues be submitted to arbitration. The trial court honored this contract and sent the matter to arbitration. The Plaintiffs then turned their complaint into a class action arguing that the Defendant’s contracts broadly defined warranty issues and demanded that this issue be arbitrated as well. The Defendants argued that the arbitration agreement did not include class actions.
On appeal, the Supreme Court of Texas held that:
(1) arbitrability of class claims is a “gateway” issue for the court unless the arbitration agreement “clearly and unmistakably” expresses a contrary intent;
(2) “[a] contract that is silent on a matter cannot speak to that matter with unmistakable clarity”; and
(3) an agreement to arbitrate class claims cannot be inferred from silence or ambiguity-an express contractual basis is required.
The Court reasoned that courts must decide whether class claims are appropriate for arbitration, because class claims by their nature usually are not fit for arbitration. Further, the Court explained that, regardless of whether it’s a class action or not, there must be a “clear and unmistakable” intent by both parties to arbitrate because the decision of the arbitrator can only be set aside by courts in very limited circumstances. Lastly, the court emphasized that an agreement to arbitrate cannot be inferred because “arbitration is a matter of consent, not coercion.”
