Document ID: ./input/supremecourt_opinions/opinions/10pdf/09-893.pdf
Page Number: 16.0

Cite as:  563 U. S. ____ (2011) 

13 

Opinion of the Court 

toothless  and  malleable  (the  Ninth  Circuit  has  held  that 
damages of $4,000 are sufficiently small, see Oestreicher v. 
Alienware  Corp.,  322  Fed.  Appx.  489,  492  (2009)  (unpub-
lished)), and the latter has no limiting effect, as all that is
required is an allegation.  Consumers remain free to bring 
and  resolve  their  disputes  on  a  bilateral  basis  under  Dis-
cover  Bank,  and  some  may  well  do  so;  but  there  is  little 
incentive  for  lawyers  to  arbitrate  on  behalf  of  individuals
when they may do so for a class and reap far higher fees in 
the  process.  And  faced  with  inevitable  class  arbitration, 
companies would have less incentive to continue resolving 
potentially duplicative claims on an individual basis. 

Although  we  have  had  little  occasion  to  examine  class-
wide  arbitration,  our  decision  in  Stolt-Nielsen  is  instruc-
tive.  In  that  case  we  held  that  an  arbitration  panel  ex-
ceeded  its  power  under  §10(a)(4)  of  the  FAA  by  imposing
class  procedures  based  on  policy  judgments  rather  than 
the arbitration agreement itself or some background prin-
ciple  of  contract  law  that  would  affect  its  interpretation. 
559  U. S.,  at  ___  (slip  op.,  at  20–23).    We  then  held  that 
the  agreement  at  issue,  which  was  silent  on  the  question 
of class procedures, could not be interpreted to allow them
because  the  “changes  brought  about  by  the  shift  from
bilateral  arbitration  to  class-action  arbitration”  are  “fun-
damental.”  Id., at ___ (slip op., at 22).  This is obvious as a 
structural  matter:  Classwide  arbitration  includes  absent 
parties,  necessitating  additional  and  different  procedures
and  involving  higher  stakes.  Confidentiality  becomes
more  difficult.    And  while  it  is  theoretically  possible  to
select  an  arbitrator  with  some  expertise  relevant  to  the 
class-certification  question,  arbitrators  are  not  generally
knowledgeable in the often-dominant procedural aspects of 
certification, such as the protection of absent parties.  The 
conclusion follows that class arbitration, to the extent it is 
manufactured  by  Discover  Bank  rather  than  consensual, 
is inconsistent with the FAA.