667 F.3d 204
2d Cir.2012Background
- This case is AMEX’s challenge to a mandatory class-action waiver in the Card Acceptance Agreement with merchants.
- The district court compelled arbitration, ruling the waiver enforceable and that antitrust claims were arbitrable.
- On appeal, Amex II held the class-action waiver was unenforceable because enforcement would prevent vindication of federal antitrust rights.
- Stolt-Nielsen and Concepcion later informed the analysis, but did not compel class arbitration here.
- The court held that the waiver effectively precludes vindication of statutory rights, so the arbitration clause is unenforceable and the case should proceed in district court or as a judicial class action.
- The decision remands to deny Amex’s motion to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of class-action waiver when it precludes federal rights | Amex II argues waiver blocks antitrust remedies; undermines statutory rights | Green Tree/Mitsubishi framework permits enforcement if rights can be vindicated | Waiver unenforceable; cannot preclude statutory rights on record facts. |
| Role of Concepcion/Stolt-Nielsen in determining class-arbitration rights | Concepcion requires per se enforcement of FAA rights; class waivers should be favored | Neither case mandates per se enforceability; issue depends on vindication of federal rights | Concepcion/Stolt-Nielsen do not require per se enforceability; analysis hinges on vindication of statutory rights. |
| Standard for proving prohibitive arbitration costs under Green Tree | Evidence shows costs would preclude individual arbitrations | Plaintiffs must show likely costs; record here supports that but not conclusively | Green Tree burden applies; record demonstrates prohibitive costs to vindicate rights, supporting invalidating waiver. |
| Impact of Stolt-Nielsen on class-wide arbitration when clause is silent | Stolt-Nielsen precludes imposing class arbitration absent contractual basis | Stolt-Nielsen does not address every waiver scenario; record-based decision required | Stolt-Nielsen controls; cannot compel class arbitration where clause is silent. |
| Remand posture and next steps if class arbitration unavailable | Without class arbitration, plaintiffs cannot vindicate antitrust rights | Arbitration could be option if waiver valid | Arbitration clause unenforceable; remand to deny motion to compel arbitration. |
Key Cases Cited
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (arbitration may resolve statutory claims where rights can be vindicated)
- Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (2000) (prohibitive arbitration costs burden on movant to prove likelihood of costs)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (statutory rights may be vindicated through arbitration when forum is adequate)
- Amex I (In re American Express Merchants’ Litig.), 554 F.3d 300 (2009) (class waiver unenforceable; vindication of federal rights key)
- Amex II (In re American Express Merchants’ Litig.), 634 F.3d 187 (2011) (reaffirms right-to-vindicate analysis; courts must assess on record)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758 (2010) (FAA governs; cannot compel class arbitration absent contract-based basis)
- Concepcion v. AT&T Mobility LLC, 131 S. Ct. 1740 (2011) (FAA preemption of state-law rules; class arbitration as to be consensual)
- Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) (class actions essential to vindicate small-damage claims)
- Reiter v. Sonotone Corp., 442 U.S. 330 (1979) (private suits supplement federal enforcement of antitrust laws)
- Northern Pac. Ry. Co. v. United States, 356 U.S. 1 (1958) (definition and elements of tying arrangements)