Consumers and the lawyers who aim to represent them en masse scored a major victory Tuesday when a federal appeals court held that arbitration clauses may be struck down — under state law — as unconscionable if they prohibit the use of the class action vehicle in cases where a large number of consumers have claims that would individually yield only small sums.
In Homa v. American Express Co., the 3rd U.S. Circuit Court of Appeals revived a suit against American Express after finding that a lower court improperly dismissed the suit on the grounds that the consumers were barred from suing in court or as a class and instead were required to bring individual claims before arbitrators.
