The U.S. Supreme Court likely ignited an intense battle in state and federal courts with its decision Tuesday that class arbitration may not be imposed on parties who have not agreed to it.

“The sword of Damocles is hanging over class arbitration now,” said F. Paul Bland of Public Justice, a Washington-based public interest law firm. “I think you are about to see a huge battle begin for what the implications of the case are. Consumer and employee advocates are going to take a view very, very different from what you’re going to see from the defense bar.”

Bland predicted that “within a week” defendants in more than 100 class action arbitration cases will seek supplemental briefing to argue that all state laws that have been used to strike down bans on class arbitrations are now pre-empted by the high court’s ruling in Stolt-Nielsen S.A. v. AnimalFeeds International Corp.

“We have already received notice in one of our cases that the defendant wants supplemental briefing to make that argument,” said Bland, who filed an amicus brief on behalf of Public Justice and Public Good in the high court case, supporting AnimalFeeds.

Seth Waxman, a Washington partner at Wilmer Cutler Pickering Hale and Dorr, argued the case on behalf of Stolt-Nielsen and other shipping companies. Nina Pillard of Georgetown University Law Center represented AnimalFeeds before the justices.

Hugh Verrier, the White & Case chairman and counsel to Stolt-Nielsen, said the ruling’s impact will be felt in future antitrust arbitration cases as well as in other areas of the law.

“Class arbitration is one of the most hotly contested legal issues of the new decade,” said Verrier in a statement. “This decision is another cutting-edge legal victory by our antitrust group.”

A number of potential class arbitrations are now under way and could be affected by the decision, said Archis Parasharami, co-chairman of Mayer Brown‘s consumer litigation and class action practice. “In an amicus brief we filed with the Court, we pointed out that, in most of those cases, the defendant was referred to a potential class arbitration despite the fact that the arbitration agreement did not expressly authorize, or in some cases expressly precluded, class arbitration,” said Parasharami, whose firm’s amicus brief on behalf of CTIA-The Wireless Association supported Stolt-Nielsen. “Defendants in those cases now have a compelling argument that the class arbitrations to which they have been subjected are ultra vires.”

via Law.com – High Court Ruling May Fuel Battle Over Class Arbitration.