AAI Advises Supreme Court that Arbitration Clauses Must Allow for Effective Vindication of Sherman Act Rights (American Express Co. v. Italian Colors Restaurant, No. 12-133)

The AAI filed an amicus brief in the U.S. Supreme Court today urging affirmance of the Second Circuit's opinion in In re American Express Merchants' Litigation, 667 F.3d 209 (2d Cir. 2012) ("Amex III"). In Amex III, the Second Circuit held that the Supreme Court's prior opinions in Stolt-Nielsen and Concepcion did not alter its conclusion that class plaintiffs could not effectively vindicate their federal Sherman Act claims under the terms of an arbitration clause inserted into American Express's card agreement with merchants, and thus the arbitration clause was unenforceable. Forcing claimants to bring individual claims in bilateral arbitration according to the terms of the arbitration clause, the court held, would preclude effective vindication of claimants' federal Sherman Act rights because the cost of bringing an individual claim would exceed even the largest treble damages award available to any one claimant.

The AAI brief argues that the class action mechanism is integral to effective private enforcement of the federal antitrust laws, and that private enforcement is integral to the effective enforcement of the federal antitrust laws as a whole. When an arbitration clause burdens the exercise of a federal statutory right to the point of preventing resolution of a claim under that right, it serves neither Congress's interest in the speedy and efficient resolution of claims in arbitration, embodied in the Federal Arbitration Act, nor Congress's interest in the private enforcement of the antitrust laws.

The brief was written by AAI Advisory Member Ellen Meriwether, with assistance from AAI Senior Counsel Randy Stutz.

The AAI had previously filed a brief in support of plaintiffs in the Second Circuit. That brief, written by AAI Advisory Board Member Dan Gustafson and his partner Karla Gluek, is available here.