After years of ambiguity about the enforceability of contract clauses mandating arbitration and waiving class action rights in domestic antitrust cases, the U.S. Supreme Court has finally brought clarity to the situation. In June 2013 the court decided American Express v. Italian Colors Restaurant, holding that arbitration clauses and waivers of class action rights are enforceable in domestic antitrust cases.
Regardless of whether one agrees with the court’s conclusion, the American Express decision clearly demonstrates the power of the conservative/pro-business majority consisting of Reagan/Bush high court appointees and signals that wherever possible the high court will favor that determinations be made in arbitration rather than through the clogged court system. This article traces the history of arbitration and waiver of class action clauses in the U.S. Court of Appeals for the Second Circuit and discusses the stated and hidden reasons behind the enforceability of such clauses.
