Sixth Circuit Rejects Class Arbitration Claims Against LexisNexis
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In a case brought by a lawyer who objected to LexisNexis’s billing practices, the U.S. Court of Appeals for the Sixth Circuit ruled Tuesday that the lawyer can’t attempt to bring a class arbitration, even if the governing arbitration contract is unfair. The court relied primarily on the Supreme Court’s June ruling in American Express v. Italian Colors Restaurant, in which the court upheld a ban on class arbitrations that arguably precluded plaintiffs from bringing individual claims.
The Sixth Circuit case was brought by Craig Crockett, a lawyer in Fort Worth, Texas, who complained that LexisNexis should have alerted him when he was about to incur additional fees by using a database outside his plan. He brought an arbitration action in 2010 seeking damages of more than $500 million on behalf of a class. Individually his damages were less than $5,000. The user contract, which required the arbitration of customer disputes, did not address whether class arbitrations were allowed.
Reed Elsevier, which owns LexisNexis, sued Crocket in federal court in Dayton, Ohio, seeking a declaration that the customer agreement didn’t permit class arbitration. The district court granted the company summary judgment.
Sixth Circuit Judge Raymond Kethledge, writing for a unanimous panel, agreed with Crockett that the arbitration agreement between LexisNexis and its customers is a one-sided contract of adhesion. “The clause favors LexisNexis at every turn, and as a practical matter makes it economically unfeasible for Crockett or any other customer to assert … individual claims,” the judge wrote. The court noted that the contract required that all arbitrations take place in Dayton, and that the customer pay his own legal fees even if he wins.
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