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Lamps Plus, Inc. v. Varela

United States Supreme Court
139 S. Ct. 1407 (2019)


Facts

Frank Varela (plaintiff) signed an arbitration agreement when he started working for Lamps Plus, Inc. (defendant). A data breach resulted in a hacker obtaining the tax information of 1,300 Lamps Plus employees. Shortly afterward, somebody filed a fraudulent tax return in Varela’s name. Varela brought a putative class action on behalf of all 1,300 employees whose information was disclosed. Lamps Plus moved to compel arbitration of the claims individually, but the trial court ordered arbitration on a class-wide basis. On appeal, the Ninth Circuit found the arbitration agreement ambiguous as to class arbitration and construed it strictly against Lamps Plus as a contract of adhesion. Accordingly, the appellate court agreed that the contract required arbitration of class claims and affirmed the trial court’s order. Lamps Plus appealed to the United States Supreme Court, arguing that an ambiguous agreement cannot supply the contractual requirement to compel arbitration.

Rule of Law

Issue

Holding and Reasoning (Roberts, C.J.)

Dissent (Ginsburg, J.)

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