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Supreme Court ruling likely to limit class action claims

| Jun 28, 2013 | Civil Litigation |

The nation’s highest court has ruled in favor of American Express in a dispute between prominent financial services firm and a group of merchants in a move that experts say will make it more difficult for class action lawsuits in Oregon and across the country. It is the second recent Supreme Court case to have limited class action lawsuits; the court denied a similar antitrust class action issuing a 5-4 ruling in favor of Comcast in March. Both disputes saw the court’s conservative and liberal Justices divided, though Justice Sonia Sotomayor recused herself in the American Express case.

The case centered around a group of merchants who attempted to sue American Express in 2003 for requiring them to accept its credit cards in order to accept its charge cards, arguing that such a policy constitutes a violation of antitrust law. The merchants contended that an arbitration clause found in their contracts with American Express prohibited them joining together in court and made individual claims too costly to pursue.

The Supreme Court ultimately agreed with American Express’s assertion that the contracts were legal under the Federal Arbitration Act, requiring the plaintiffs to resolve their issues via arbitration rather than civil litigation. American Express praised the ruling, issuing a statement in which it claimed the decision “confirms the viability of the Federal Arbitration Act and prior Supreme Court decision on arbitration.”

While the merchants were disappointed by the verdict, one of their attorneys said the case could potentially prompt lawmakers and federal regulators to evaluate and potentially challenge the validity of the ruling and the Federal Arbitration Act at large. “The Supreme Court may not have the last word on this,” he explained. Dissenting Justice Elena Kagan criticized the decision, arguing that it effectively makes antitrust claims impossible for merchants.

Litigation involving antitrust claims, contractual disputes and similar issues can be extremely complex, making it crucial for parties involved in such cases to consult with an experienced Oregon attorney.

Source: Reuters.com, “Supreme Court clamps down on class actions in merchants’ case” Lawrence Hurley and Andrew Longstreth, Jun. 20, 2013