U.S. Supreme Court Ruling In American Express Case Upholds Class Action Arbitration Waivers

On June 20, 2013, the U.S. Supreme Court ruled, by a 5-to-3 margin, that a group of merchants was bound by an arbitration agreement that prohibits them from bringing class action claims against American Express, even if the cost of arbitrating antitrust claims on an individual basis is prohibitive. American Express Co. v. Italian Colors Restaurant, No. 12–133 (June 20, 2013) ("American Express"). The Court, in an opinion penned by Justice Scalia, concluded that nothing in the Federal Arbitration Act (FAA) allows courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff's cost of individually arbitrating a federal statutory claim exceeds the potential recovery.