433 F.Supp.3d 395
E.D.N.Y2020Background
- Plaintiffs are two merchant classes: (1) merchants that accept Amex cards and are parties to Amex Card Acceptance Agreements (the "Amex Class"); and (2) merchants that do not accept Amex cards and have no contract with Amex (the "Non-Amex Class").
- Plaintiffs challenge Amex's CAA non‑discrimination / "Anti‑Steering" provisions, alleging they restrain interbrand competition and cause supracompetitive merchant fees across card networks. Plaintiffs seek monetary and injunctive relief (federal Sherman Act and state claims for California subclasses).
- Amex moved to compel arbitration of claims by merchants bound to the CAA and moved to dismiss all claims by the Non‑Amex Class for lack of standing and for failure to state a claim.
- The operative CAA (2018 form) contains a broad arbitration clause that disallows class or representative proceedings and prohibits market‑wide injunctive relief via arbitration; all Amex Class members are bound.
- The court granted Amex’s motion to compel arbitration for the Amex Class (following Supreme Court precedent upholding similar Amex arbitration provisions) and dismissed all claims by the Non‑Amex Class for lack of antitrust standing under federal law and for failure to state California antitrust/UCL claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of CAA arbitration clause / class‑action waiver | Plaintiffs: classwide relief is necessary to vindicate statutory rights; arbitration clause forecloses market‑wide injunctive relief and thus violates "effective vindication" doctrine | Amex: FAA requires enforcing written arbitration agreements; clause bars class/representative actions and is enforceable | Court: compelled arbitration; Italian Colors controls—class waiver enforceable and effective‑vindication exception not shown |
| Relevance of Lamps Plus decision | Plaintiffs: Lamps Plus supports denying arbitration because of class arbitration issues | Amex: Lamps Plus irrelevant because CAA affirmatively bars class arbitration | Court: Lamps Plus irrelevant; CAA does not permit class arbitration |
| Federal antitrust standing for Non‑Amex merchants | Plaintiffs: Non‑Amex merchants suffered higher merchant fees as a market‑wide effect and thus have standing | Amex: Non‑Amex merchants are too remote (indirect/umbrella purchasers); efficient‑enforcer factors not met | Court: Dismissed Non‑Amex claims—plaintiffs lack antitrust standing (directness, efficient‑enforcer factors weigh against them) |
| California law (Cartwright Act and UCL) claims by Non‑Amex Subclass | Plaintiffs: California standing broader than federal; Non‑Amex subclass can sue under state law | Amex: State claims fail for same remoteness/standing reasons | Court: Dismissed California claims as well—under analogous factors and California law the Non‑Amex injury is too remote; UCL claim falls with underlying antitrust claims |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (class‑action waivers in arbitration enforceable under FAA)
- Italian Colors Restaurant v. American Express Co., 570 U.S. 228 (Supreme Court upholding Amex arbitration clause precluding class arbitration in antitrust case)
- Lamps Plus, Inc. v. Varela, 587 U.S. _ (2019) (class arbitration may be compelled only if the arbitration agreement clearly authorizes it)
- Ohio v. American Express Co., 138 S. Ct. 2274 (Supreme Court defining relevant two‑sided market and affirming reversal in government challenge to Amex rules)
- Gelboim v. Bank of America Corp., 823 F.3d 759 (2d Cir. 2016) (antitrust standing / efficient‑enforcer framework)
- 10 Dental Supplv, Inc. v. Henry Schein, Inc., 924 F.3d 57 (2d Cir. 2019) (application of efficient‑enforcer factors; speculative damages and remoteness)