Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003)

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GREEN TREE FINANCIAL CORP., nka CONSECO FINANCE CORP. v. BAZZLE et al., in a representative capacity on behalf of a class and for all others similarly situated, et al.

certiorari to the supreme court of south carolina

No. 02-634. Argued April 22, 2003—Decided June 23, 2003

The Bazzle respondents and the Lackey and Buggs respondents separately entered into contracts with petitioner Green Tree Financial Corp. that were governed by South Carolina law and included an arbitration clause governed by the Federal Arbitration Act. Each set of respondents filed a state-court action, complaining that Green Tree's failure to provide them with a form that would have told them of their right to name their own lawyers and insurance agents violated South Carolina law, and seeking damages. The Bazzles moved for class certification, and Green Tree sought to stay the court proceedings and compel arbitration. After the court certified a class and compelled arbitration, Green Tree selected, with the Bazzles' consent, an arbitrator who later awarded the class damages and attorney's fees. The trial court confirmed the award, and Green Tree appealed, claiming, among other things, that class arbitration was legally impermissible. Lackey and the Buggses also sought class certification and Green Tree moved to compel arbitration. The trial court denied Green Tree's motion, finding the agreement unenforceable, but the state appeals court reversed. The parties then chose an arbitrator, the same arbitrator who was later chosen to arbitrate the Bazzles' dispute. The arbitrator certified a class and awarded it damages and attorney's fees. The trial court confirmed the award, and Green Tree appealed. The State Supreme Court withdrew both cases from the appeals court, assumed jurisdiction, and consolidated the proceedings. That court held that the contracts were silent in respect to class arbitration, that they consequently authorized class arbitration, and that arbitration had properly taken that form.

Held: The judgment is vacated, and the case is remanded.

351 S. C. 244, 569 S. E. 2d 349, vacated and remanded.

Justice Breyer, joined by Justice Scalia, Justice Souter, and Justice Ginsburg, concluded that an arbitrator must determine whether the contracts forbid class arbitration. Pp. 450-454.

(a) Green Tree argues that the contracts are not silent—that they forbid arbitration. If the contracts are not silent, then the state court's

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