Italian Colors Restaurant v. American Express Travel Related Services Co.
634 F.3d 187
| 2d Cir. | 2011Background
- This case returns from the Supreme Court and concerns Amex’s arbitration clause with a class action waiver.
- The Card Acceptance Agreement includes an arbitration provision and a prohibition on class actions or representative arbitrations.
- The district court granted Amex's motion to compel arbitration and dismissed antitrust claims.
- The Second Circuit previously held the class action waiver unenforceable because it would bar private antitrust enforcement.
- Stolt-Nielsen v. AnimalFeeds was considered on remand to assess its impact on enforceability, with the panel finding no change in the outcome.
- The court ultimately holds the class action waiver unenforceable because enforcing it would effectively immunize Amex from antitrust liability and deprive plaintiffs of vindicating federal statutory rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the class action waiver enforceable under the FAA given antitrust rights | Amex argues waiver is enforceable | Plaintiffs argue waiver precludes vindicating federal rights | Waiver unenforceable, because it obstructs enforcement of antitrust rights |
| Does Stolt-Nielsen control the outcome | Stolt-Nielsen does not require enforcing the waiver | Stolt-Nielsen limits courts from imposing class arbitration | Stolt-Nielsen does not compel enforcement of the waiver; outcome unchanged |
| May public policy invalidate a contract clause that blocks vindication of statutory rights | Public policy supports invalidating the waiver to permit private enforcement | Public policy cannot override clear contractual terms absent wrong | Public policy supports invalidation of the waiver to allow vindication of statutory rights |
Key Cases Cited
- In re American Express Merchants Litig., 554 F.3d 300 (2d Cir. 2009) (holding class action waiver unenforceable due to antitrust rights vindication concerns)
- Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010) (arbitrators cannot infer class arbitration absent contractual basis; FAA governs)
- Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79 (Supreme Court 2000) (costs alone cannot render arbitration unenforceable without proving prohibitive costs)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (Supreme Court 1991) (statutory claims may be subject to arbitration; court must respect Congress’s intent)