Following 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).