Compucredit Corp. v. Greenwood
565 U.S. 95
| SCOTUS | 2012Background
- Respondents applied for and obtained an Aspire Visa card marketed by CompuCredit and issued by Columbus Bank & Trust (now Synovus).
- They signed form contracts that included an arbitration clause for disputes arising under the account.
- In 2008 respondents sued in the Northern District of California alleging CROA violations and other claims; the district court denied arbitration and a Ninth Circuit panel affirmed.
- CROA imposes disclosures (including a statement that the consumer has a right to sue) and a nonwaiver provision; it also provides a private right of action and enforcement mechanisms.
- The Supreme Court held that the FAA requires arbitrating CROA claims according to the contract terms because CROA’s text does not clearly override arbitration.
- The case was remanded for proceedings consistent with this opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does CROA preclude arbitration of CROA claims? | Respondents argue CROA's disclosure and nonwaiver prohibit waiver of judicial remedies. | Petitioners contend FAA requires enforcement of arbitration unless Congress clearly overrides it, and CROA lacks such a command. | Arbitration must be enforced; CROA does not preclude arbitration. |
| Does the CROA disclosure create a nonwaivable right to sue in court? | CROA’s “right to sue” disclosure suggests a court-right that cannot be waived. | The disclosure is descriptive; it does not create a nonwaivable court right beyond arbitration. | No, the disclosure does not create a nonwaivable right to sue in court; arbitration may proceed. |
Key Cases Cited
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (arbitration upheld for statutory rights unless congressional command to the contrary)
- McMahon v. Shearson/American Express Inc., 482 U.S. 220 (1987) (arbitration generally allowed unless Congress clearly disallows waiver of judicial remedies)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (arbitration upheld for cartel/antitrust claims with framework for arbitration)
- Gilmer, 500 U.S. 20 (1991), Gilmer v. Interstate/Johnson Lane Corp. (1991) (contextual reference on enforceability of arbitration under FAA)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA policy favoring arbitration and limits on state-law defenses)