In Re American Exp. Merchants'litigation
681 F.3d 139
2d Cir.2012Background
- This is the Second Circuit case In re American Express Merchants' Litigation, Italian Colors Restaurant et al., appealing from antitrust actions against American Express related to card acceptance and arbitration provisions.
- The court's long-standing arbitration-class-action waiver issue centers on whether arbitration can vindicate federal statutory antitrust rights rather than proceeding in court.
- Amex I held a class-arbitration waiver in arbitration agreements to be at odds with federal antitrust law due to prohibitive litigation costs.
- On remand, Amex II reaffirmed the panel’s stance, and Amex III subsequently held the class-action waiver unenforceable on vindication grounds.
- The panel’s denial of rehearing en banc prompted dissents arguing that the FAA requires enforcing arbitration clauses, and that Amex III misreads Concepcion and related precedents.
- This opinion documents the deliberations and concurring/dissenting views following the denial of rehearing en banc.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Amex III is compatible with the FAA | Amex III vindicates federal statutory rights | FAA requires enforcing arbitration clauses | Amex III incompatible with the FAA |
| Whether the panel erred in treating Green Tree dicta as controlling | Green Tree dicta supports vindicating rights via class action | Green Tree dicta is non-controlling or dicta | Green Tree dicta treated as dicta and not controlling |
| Whether Concepcion overrides Amex III’s approach | Concepcion does not overrule vindication analysis | Concepcion preempts state-law-based limitations on arbitration | Concepcion does not overrule the Amex III approach, per dissenting views (debated) |
| Whether the case should be reviewed en banc | There is a circuit split and important questions warrant en banc review | Rehearing en banc is not warranted | En banc review warranted (or at least should be considered) per dissenters) |
Key Cases Cited
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (arbitration vindicates federal statutory rights when feasible)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (vindication-rights principle for statutory claims in arbitration)
- Green Tree Fin. Corp. Alabama v. Randolph, 531 U.S. 79 (2000) (costs of arbitration; dicta on vindicating rights)
- Concepcion v. AT&T Mobility LLC, 131 S. Ct. 1740 (2011) (FAA preempts state-law obstacles to class waivers; broad FAA policy)
- 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009) (arbitration can enforce statutory rights)
- Coneff v. AT&T Corp., 673 F.3d 1155 (2012) (circuit split on FAA preemption and vindication claims)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758 (2010) (class-action arbitration requires contract basis; limits class arbitration absent agreement)
- Amex I, In re American Express Merchants’ Litigation, 554 F.3d 300 (2009) (class-action waiver conflicts with federal antitrust law due to costs of individual arbitration)
- Amex II, In re Am. Express Merchants’ Litig., 634 F.3d 187 (2011) (on remand, reaffirmed concern about enforceability of class waivers in arbitration)
- Amex III, In re Am. Express Merchants’ Litig., 667 F.3d 204 (2012) (class-action waiver unenforceable under vindication-of-rights analysis; narrow scope)