A federal judge in Manhattan on Feb. 8 denied a bid by Citigroup Inc. and Discover Bank to dismiss a long-running antitrust suit accusing them of conspiring with American Express and Wells Fargo to impose mandatory arbitration clauses on credit card holders from 1999 to 2003. Citi and Discover are the two remaining defendants in the suit, which plaintiff counsel Berger & Montague filed in 2005. American Express, which continues to face similar claims, was sued separately in 2004.

According to the ruling by Southern District Judge William H. Pauley III in Ross v. Bank of America, 05 Civ. 7116, Wilmer Cutler Pickering Hale and Dorr began hosting meetings in 1999 in which the banks discussed (and allegedly coordinated) their plans to incorporate mandatory arbitration provisions. Judge Pauley (See Profile) saw an e-mail by another lawyer, Alan Kaplinsky of Ballard Spahr Andrews & Ingersoll, as evidence the banks may have collaborated to stave off class actions. In a June 1999 draft e-mail to attendees of a Wilmer Cutler meeting, Mr. Kaplinsky encouraged them to be “well networked” because “the plaintiffs’ bar is engaged in a ‘take no prisoners assault’ on consumer arbitration programs.” Citi and Discovery deny sharing Mr. Kaplinsky’s sentiments or receiving the e-mail, but Judge Pauley concluded that the facts were in dispute.

“While we’re disappointed that our motion for summary judgment wasn’t granted, we’re confident in the outcome of the case,” said David Graham of Sidley Austin, counsel to Citi. “There was absolutely no collusion here, and the evidence will fully demonstrate that.” Robert Sperling of Winston & Strawn, counsel to Discover, declined to comment, as did a bank representative.

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