In Re American Exp. Merchants'litigation
667 F.3d 204
2d Cir.2011Background
- Plaintiffs allege antitrust violations by Amex tied to the Card Acceptance Agreement requiring arbitration and prohibiting class actions.
- The agreement includes a New York choice-of-law provision and a mandatory arbitration clause.
- The district court compelled arbitration, holding the clause broadly applicable to the dispute and the class waiver for arbitrator resolution.
- The Second Circuit previously held the class action waiver unenforceable to vindicate statutory rights under antitrust laws.
- The Supreme Court vacated and remanded after Stolt-Nielsen, prompting reconsideration of whether a class waiver can be enforced when it precludes statutory rights vindication.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the class action waiver is enforceable under the FAA | Amex waiver strips private antitrust remedies | Waiver should be enforceable as a contractual term under FAA | Waiver unenforceable; would effectively bar statutory rights |
| Impact of Stolt-Nielsen on class arbitration and contract enforceability | Stolt-Nielsen does not permit enforcing waivers that block vindication of rights | Stolt-Nielsen supports rigid contractual construction to limit class arbitration | Stolt-Nielsen does not compel enforcing a waiver that blocks statutory rights |
| Whether costs of individual arbitration render the class waiver void under Randolph | Costs make individual arbitration prohibitive, undermining private rights | Costs argument is speculative and not shown to defeat arbitration | Record shows prohibitive costs for individual arbitration; waiver invalidates enforceability |
Key Cases Cited
- Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (U.S. 2000) (costs not enough to invalidate arbitration absent proof of likely costs)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (U.S. 1991) (statutory claims may be subject to arbitration; ADEA permits arbitration)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (public policy may bar arbitration where it precludes statutory remedies)
- Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (U.S. 1974) (private class actions may vindicate antitrust rights)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (U.S. 1983) (FAA provides body of federal substantive law of arbitrability)
- In re American Express Merchants' Litigation, 554 F.3d 300 (2d Cir. 2009) (class action waiver unenforceable to vindicate statutory rights under antitrust law)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (U.S. 1991) (statutory claims may be subject to arbitration)