American Express Co. v. Italian Colors Restaurant, No. 12-133; U.S. Supreme Court; opinion by Scalia, J.; concurrence by Thomas, J.; dissent by Kagan, J.; decided June 20, 2013. On certiorari to the U.S. Court of Appeals for the Second Circuit.
An agreement between petitioners, American Express and a subsidiary, and respondents, merchants who accept American Express cards, requires all of their disputes to be resolved by arbitration and provides that there "shall be no right or authority for any Claims to be arbitrated on a class action basis." Respondents nonetheless filed a class action, claiming that petitioners violated § 1 of the Sherman Act and seeking treble damages for the class under § 4 of the Clayton Act. Petitioners moved to compel individual arbitration under the Federal Arbitration Act (FAA), but respondents countered that the cost of expert analysis necessary to prove the antitrust claims would greatly exceed the maximum recovery for an individual plaintiff. The district court granted the motion and dismissed the lawsuits. The second circuit reversed and remanded, holding that because of the prohibitive costs respondents would face if they had to arbitrate, the class-action waiver was unenforceable and arbitration could not proceed. The circuit stood by its reversal when this court remanded in light of Stolt-Nielsen S.A. v. Animal Feeds International Corp., 559 U.S. 662, which held that a party may not be compelled to submit to class arbitration absent an agreement to do so.
