He and his amicus colleagues worry that a ruling for American Express that eliminates the effective vindication rule would erode public confidence in the legitimacy of arbitration and trigger a congressional reaction that would place more restrictions on arbitration.
Stipanowich said what is needed is a policy discussion about the kind of class action framework needed under the law, a discussion apart from arbitration agreements. The Supreme Court's decisions emphasize that arbitration is speedy and economical and it warns of consequences to business if class waivers are not enforced, he said.
"In the business arena today, one of the problems is arbitration is not that way," he said. "Sometimes people want arbitration to look like litigation, but that's because they have the wherewithal to do so. I'm a person who likes arbitration because of the ability to choose processes, to fit a process to the needs of a party. What's different here is it's really one party choosing the system. We can't close our eyes and pretend it's all the same."
The pro-business public interest law firm, the New England Legal Foundation, and other amici supporting American Express, argue that nothing prevents similarly situated parties from pooling their resources to hire a lawyer, fund expert fees and share others costs while proving their claims in individual arbitrations.
"They could do that easier in this case—you have a group of plaintiffs organized already," agreed Pincus. "More generally, through the Internet and social media that's something that could be replicated broadly."
Stipanowich called that a novel and ultimately cumbersome approach. Public Justice's Bland said if American Express wins, there will be no per se defense left against a class action ban in an arbitration agreement.
"If a company drafts a clause that bans class actions and cleanly gets an arbitration agreement formed—and an American Express ruling goes as far as the company is asking—you will see a whole bunch of statutory rights wiped out," he predicted.
Marcia Coyle writes for The National Law Journal, a Daily Report affiliate.
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