The Supreme Court’s recent arbitration decisions have not yet killed the antitrust class action.
Yesterday, in a purported class action brought by merchants against American Express, the Second Circuit ruled that American Express could not enforce an arbitration agreement containing a class action waiver provision. The Second Circuit distinguished the Supreme Court’s recent decisions in Concepcion and Stolt-Nielsen. (Concepcion, in particular, had bolstered the enforceability of arbitration provisions, ruling that the Federal Arbitration Act preempts certain state laws.) The Second Circuit found that those cases did not address the issue of whether a class-action arbitration waiver clause is enforceable even if the plaintiffs are able to demonstrate that the practical effect of enforcement would be to preclude their ability to vindicate their federal statutory rights.
In so ruling, the Second Circuit relied upon evidence that showed that the cost of individually arbitrating the merchants’ claims would be prohibitive. (The merchants had alleged that when American Express entered the commodity credit card business, American Express forced merchants to pay “excessive” rates equal to American Express’ more attractive business and personal charge cards by tying the credit and charge cards together.)
The decision is In re American Express Merchants’ Litigation, 2d Circuit Feb. 1, 2012. A petition for certiorari is likely.