Supreme Court Upholds Class Action Waivers In Arbitration Agreements

Jerrold Ganzfried is a Partner & John Stanton is Senior Counsel in our Washington, D.C. office .

Last week, the United States Supreme Court decided American Express v. Italian Colors Restaurant and affirmed the right of parties to agree to class action waivers in arbitration contracts.

The underlying dispute between the parties involved alleged antitrust violations stemming from American Express' "Honor All Cards" contract, which required participating restaurants to accept both American Express credit and debit cards — the latter of which carried higher fees. The plaintiffs claimed the contract imposed an unlawful tying arrangement in violation of federal antitrust law. The contract also contained an arbitration clause that: (1) required all disputes between the parties to be resolved by bilateral arbitration, and (2) said no claims could be arbitrated on a class action basis.