Network Capital Funding Corp. v. Papke
Annotate this CasePlaintiff-respondent Network Capital Funding Corporation filed a declaratory relief action alleging its arbitration agreement with defendant-appellant Erik Papke required Papke to arbitrate his wage and hour claims on an individual basis rather than the classwide basis he sought in his pending arbitration proceeding. According to Papke, the broad language in the parties’ arbitration agreement required the arbitrator, not the court, to decide whether the agreement authorized class arbitration. The trial court denied Papke’s petition, concluding it must decide whether the arbitration agreement authorized class arbitration, and in doing so found this particular agreement did not allow class arbitration. Papke appealed. After review, the Court of Appeal agreed with the trial court: "[d]eciding whether the parties’ arbitration agreement authorizes class arbitration does not simply determine what arbitration procedures the parties agreed to use, but rather whose claims the parties agreed to arbitrate. Supreme Court precedent requires courts to decide whose claims are covered by an arbitration agreement unless the parties clearly and unmistakably agree to have the arbitrator decide that question. Because Papke’s and Network Capital’s arbitration agreement does not clearly and unmistakably designate the arbitrator to determine whether the agreement authorizes class arbitration, we conclude the trial court properly decided that question." Furthermore, the Court concluded the trial court properly determined Papke’s and Network Capital’s arbitration agreement did not authorize class arbitration.
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