Second Circuit Refuses To Review Decision That Class Action Waiver In Arbitration Agreement Is Unenforceable

The Second Circuit has refused to grant enbanc (full court) review of its earlier decision barring the enforcement of class action waiver provisions in business arbitration agreements involving federal statutory claims. The court's May 29, 2012 denial means that its earlier decision, In Re American Express Merchants' Litigation, 667 F.3d 204 (2d Cir. 2012) (Amex III), remains the law of the Second Circuit.   

In Amex III, the Court of Appeals invalidated a class action waiver provision in the parties' arbitration agreement, finding that the "substantial upfront expenditures" required by individual proceedings would effectively bar the plaintiffs from vindicating their rights under federal antitrust law.  The case arose from two consolidated class actions filed by merchants and supermarkets doing business with American Express (Amex).  Plaintiffs claimed that the provision in Amex's Card Acceptance Agreement, requiring them to accept all Amex credit and debit cards,