In Re American Exp. Merchants'litigation
667 F.3d 204
| 2d Cir. | 2012Background
- The Card Acceptance Agreement contains a mandatory arbitration clause and a broad class-action waiver.
- Plaintiffs allege Amex used its market power in charge cards to extract supra-competitive merchant discounts and to coerce merchants to accept new products.
- The waiver precludes class or representative actions, effectively blocking private antitrust enforcement against Amex.
- The district court granted Amex's motion to compel arbitration under the FAA and Rule 12(b).
- This court's Amex I held the class-action waiver unenforceable for vindicating federal rights; Amex II remanded after Stolt-Nielsen and Concepcion updates.
- Concepcion clarified FAA preemption in consumer-class actions but did not resolve the vindication-of-rights analysis at issue here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of class-action waiver when it precludes vindicating federal rights | Amex II shows waiver blocks federal antitrust vindication. | FAA requires enforcement of arbitration clauses and their waivers. | Waiver unenforceable; blocks vindication of federal rights. |
| Whether Concepcion/Stolt-Nielsen dictate per se enforceability of class waivers | Concepcion/Stolt-Nielsen do not require per se enforcement here. | These decisions support enforcing arbitration clauses and waivers where applicable. | Not per se enforceable; analysis grounded in vindication of statutory rights. |
| Whether the waiver prevents vindication of statutory rights via arbitration or court | Class waiver makes individual arbitration economically infeasible, defeating statutory rights. | Costs of arbitration are not inherently prohibitive; waiver should stand if valid. | Waiver renders statutory rights effectively unvindicable; unenforceable. |
Key Cases Cited
- Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (U.S. 2000) (burden to prove prohibitive arbitration costs)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (arbitration of statutory claims; vindication threshold)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (U.S. 1991) (statutory claims may be arbitrated if effectively vindicated)
- Stolt-Nielsen S.A. v. AnimalFeeds Intl Corp., 130 S. Ct. 1758 (S. Ct. 2010) (cannot compel class arbitration absent contractual basis)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (S. Ct. 2011) (FAA preempts state rule banning class-action waivers)
- Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (U.S. 1974) (class actions as vehicle for vindicating private rights)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (U.S. 1997) (class actions to overcome small individual recoveries)
- Mace v. Van Ru Credit Corp., 109 F.3d 338 (7th Cir. 1997) (class action mechanism vindicative of small recoveries)