DOJ to SCOTUS: Don’t Enforce Arbitration Agreement Invalidating Statutory Rights
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On January 29, the U.S. Dept. of Justice filed an amicus brief supporting respondents in AmEx III, arguing that to enforce the class arbitration waiver would be to create a large loophole for important federal laws. The Solicitor General has also asked to argue at the hearing on February 27. To my knowledge, DOJ has never previously weighed in on an arbitration case before the U.S. Supreme Court.
The issue in AmEx is whether American Express can enforce its arbitration agreement, which precludes any class or consolidated actions, against a class of plaintiffs who allege antitrust violations. The Second Circuit has held, on remand and on reconsideration, that American Express cannot enforce that arbitration agreement. The court held that the plaintiffs proved it was not economically feasible to pursue their cases on an individual basis and therefore precluding a class action meant precluding the enforcement of their antitrust rights, which is sufficient to invalidate the arbitration agreement under Green Tree Financial Corp. v. Randolph, 531 U.S. 79 (2000).
Read original articleTags: American Express, arbitration agreement
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