Arbitration is supposed to be a forum where anyone with a valid legal claim can be heard fairly. At least that’s what the U.S. Supreme Court and pro-business advocates say.
For years, the Supreme Court has been pushing more and more cases into arbitration. Now, the Court’s promise that arbitration is fair is being put to the test: a new case will determine if the Court really means what it said.
In re American Express Merchants Litigation involves a number of small merchants who brought a class action alleging that American Express violated federal antitrust laws by using its monopoly power to force merchants accepting certain charge cards to take all AmEx-branded credit cards — and pay higher fees. AmEx moved to force the case into individual arbitration (with no possibility of a class action).
The plaintiffs proved that it would be impossible for them to pursue these antitrust claims in court or arbitration if they had to go forward on an individual basis. It would cost them hundreds of thousands of dollars to prove each case, even though the claims are worth only about $5,000 apiece.
Up until now, the Court has insisted that arbitration clauses are enforceable only when they allow parties to "effectively vindicate" their substantive rights. But AmEx, backed by the Chamber of Commerce, wants all that to change. They want the Supreme Court to enforce AmEx’s arbitration clause and class action ban even though that would eliminate the small business plaintiffs’ rights under the antitrust laws — and let AmEx keep any money it illegally took.
We just filed an amicus brief objecting to AmEx’s radical position. Our brief explains that if the Court severs the link between arbitration and the opportunity to be heard and obtain justice, then statutes that Congress enacted to protect consumers, small businesses and workers from more powerful corporations will be gutted. If the Supreme Court agrees with AmEx, arbitration will become nothing more than a convenient way for stronger parties to immunize themselves from the law. It will have no arguable legitimacy; it will just be an exercise in power.
Our brief was written by Senior Attorney Paul Bland, Staff Attorney Leslie Bailey, Brayton-Thornton Attorney Spencer Wilson and me. We were joined on the brief by the American Association for Justice and AARP. John Vail of AAJ’s Center for Constitutional Litigation and Julie Nevpau of AARP provided valuable input.
Now, we need action from you:
This case is an outrage. The Supreme Court is considering forcing arbitration on plaintiffs who will never be able to vindicate their rights in that supposedly fair forum. But few peopole know about this case — and there has been very little press about it.
Please forward this to any reporter you think might be interested, as well as to state listservs, your colleagues and friends. If you have a blog, write about it. If you’re on Twitter, tweet about it. Paul Bland did so, and it’s already been re-tweeted many times. Follow Paul here and help us spread the word.
Our clients’ rights will be washed away unless we act. The public — and the Court — need to understand what’s at stake. Thanks so much.
Public Justice and the Public Justice Foundation