In In Re: American Express Merchants’ Litigation (No. 06-1871-cv), a two judge panel of the Second Circuit breathes new life into arguments to strike arbitration clauses. The court held that, because of the allegedly prohibitive costs for pursuing antitrust claims on an individual basis, forcing the plaintiffs to pursue their claims in arbitration would prohibit them from effectively vindicating their federal claims. The court therefore held that the arbitration agreement at issue was unenforceable. Continue reading this entry
Tag Archives: Arbitration
Supreme Court In CompuCredit Corp. v. Greenwood Gives Another Victory to Proponents of Arbitration
Posted in Class ActionsFollowing on the heals of its pro-arbitration decision in Concepcion from earlier this year, the United States Supreme Court ruled today that a federal statute that provides for a private right of action and even for class actions, but is silent as to whether these claims can proceed in arbitration, does not trump the Federal Arbitration Act. See CompuCredit Corp. v. Greenwood, 566 U.S. __ (2011).
As the U.S. Supreme Court has stated on numerous occasions, there is “a liberal federal policy favoring arbitration.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). In CompuCredit Corp. v. Greenwood, No. 10-948 (U.S. Jan. 10, 2012), the Court trotted out that old refrain again today, holding that the fact that a federal statute provides for a private right of action—while silent on the issue of whether claims under the statute can be pursued in arbitration—does not mean that the plaintiffs can get out of their agreement to arbitrate with the defendant. The plaintiffs were unhappy with the agreement for a credit card they entered into. They argued that the Credit Repair Organizations Act (CROA), 15 U.S.C. § 1679 et seq., specifically provided a requirement for the defendant to disclose to consumers that “You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.” 15 U.S.C. § 1679c(a). The CROA also provides that “Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter—(1) shall be treated as void; and (2) may not be enforced by any Federal or State court or any other person.” 15 U.S.C. § 1679f(a).
United States Supreme Court Holds Class Actions Waivers In Arbitration Agreements Are Enforceable
Posted in Class ActionsThe United States Supreme Court issued a much awaited decision today that will dramatically impact class action litigation across the country. In a 5-4 decision, in AT&T Mobility LLC v. Concepcion, No. 09-893 (April 27, 2011), the Court held that arbitration agreements in standard form contracts that waive the right to pursue a class action are enforceable, and that the Federal Arbitration Act, 9 U.S.C. § 1, et seq., preempts a California court ruling to the contrary.
The Ninth Circuit Analyzes Procedure for Review of Arbitration Awards
Posted in Real Estate Settlement Procedures ActIn Johnson v. Wells Fargo Home Mortgage, Inc., the Ninth Circuit addressed issues regarding a district court’s review of an arbitration award, as well as the substantive merits of the plaintiff’s Real Estate Settlement Procedures Act (“RESPA”) claims. 2011 WL 505016 (9th Cir. Feb. 15, 2011). The plaintiff, Wes Johnson, brought suit against Wells Fargo Home Mortgage, Inc. (“Wells Fargo”) alleging, inter alia, claims for violation of RESPA for Wells Fargo’s improper reporting to credit reporting agencies of Johnson’s delinquencies on two mortgage loans, which he secured as part of his business of purchasing undervalued properties and then refurbishing, renting, and selling them. The parties stipulated to binding arbitration. The arbitrator found in favor of Johnson awarding him damages. Wells Fargo then moved the district court to vacate the award. The district court directed that the appeal of the award should be heard directly by the appellate court, and without reviewing the award, confirmed it.