Distribution, Competition, and Antitrust / IP Law

American Express Can’t Enforce Arbitration Agreement Antitrust Class Action Waiver

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.

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About Howard Ullman

Antitrust, competition, and IP law enthusiast.


  1. Howard,

    I’ll have to read the case, but this is the sort of narrowing of Concepcion that I expected. A lot of people were concerned that consumers wouldn’t have recourse because Concepcion allows companies to opt out of class actions, but the arbitration agreement in Concepcion was gold-plated. As I recall, the Supreme Court noted in its opinion that the consumer would be better off under AT&T Mobility’s arbitration regime than in a class action.

    I did a brief post on my Contracts Guy blog about it last year; AT&T Mobility: Is Class Arbitration Dead?


  1. […] for the third time Wednesday. I found the case yesterday via a post on Howard Ullman’s My Distribution Law […]

  2. […] American Express Can’t Enforce Arbitration Agreement Antitrust Class Action Waiver.  Discussing the Second Circuit case refusing to enforce an American Express arbitration agreement […]

  3. Joe P Pantel says:

    Joe P Pantel

    American Express Can’t Enforce Arbitration Agreement Antitrust Class Action Waiver | My Distribution Law

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