In a November 5, 2013 opinion, Reed Elsevier, Inc. v. Crockett, the US Court of Appeals for the Sixth Circuit held that the district court was the correct entity to decide whether an arbitration agreement permits classwide arbitration. The court found that the arbitration agreement did not permit classwide arbitration, and affirmed the district court's decision to grant summary judgment to the plaintiff.

The defendant in this action entered into an adhesion contract with LexisNexis, a subsidiary of the plaintiff, for access to certain legal databases for a fixed fee. The contract contained an arbitration clause stating that any dispute related to Lexis' charges would be decided by arbitration in the city where Lexis is located. The clause contained no mention of classwide arbitration. The defendant subsequently complained that his law firm was being charged additional fees for using a database outside of his subscription plan without any warning that the additional fees were being incurred. The defendant filed a complaint with the American Arbitration Association on behalf of himself and two different classes. Lexis then sued Crockett in federal district court in Ohio, seeking a declaration that the arbitration clause did not authorize class arbitration. The district court agreed with Lexis, and granted its motion for summary judgment. On appeal, the defendant argued in part that the arbitrator, rather than the district court, should decide whether an arbitration agreement authorizes classwide arbitration and that thearbitration clause was unconscionable because it did not provide for class arbitration.

The Sixth Circuit upheld the district court's decision. The court focused on the difference between "subsidiary questions," which are questions that the parties agreed to arbitrate and should be decided by an arbitrator, and "gateway questions," which are questions that the parties did not agree to arbitrate and should be decided in the courts. The circuit court found that the Supreme Court strongly indicated that classwide arbitrability is a gateway question, and should therefore be decided in the courts.

The defendant also argued that the if the arbitration clause did not permit classwide arbitration, it was unconscionable. The court swiftly dismissed this argument, citing the Supreme Court case American Express Co. v. Italian Colors Restaurant, which held that the absence of a class-action right does not render an arbitration agreement unenforceable (133 S.Ct. 2304 (2013)).

Practitioners should note that the Sixth Circuit will consider the question of whether an arbitration agreement provides for classwide arbitration to be a gateway question, properly decided by the court. Practitioners should further note that in light of the Supreme Court's Italian Colors decision, an arbitration agreement does not need to provide for classwide arbitration in order to be enforced.

Reed Elsevier, Inc. v. Crockett, 734 F.3d 594 (6th Cir. 2013).