Supreme Court grants certiorari in important arbitration case

Yesterday the Supreme Court granted the petition for a writ of certiorari in American Express Co. v. Italian Colors Restaurant, No. 12-133, 2012 WL 3096737 (U.S. Nov. 9, 2012), to decide the following question presented:  “Whether the Federal Arbitration Act permits courts, invoking the ‘federal substantive law of arbitrability,’ to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal lawclaim.”  American Express filed the petition seeking relief from the Second Circuit’s decision in In re American Express Merchants’ Litig., 667 F.3d 204 (2d Cir. 2012), in which the court held that a pre-dispute arbitration clause containing a class action waiver in a credit card customer agreement was unenforceable because it precluded plaintiff merchants from vindicating their federal statutory rights under the federal antitrust laws.  The Second Circuit’s decision was the third time the Court had found the arbitration clause unenforceable, this last time even after a review of the case in light of the Supreme Court’s April 2011 decision in AT&T Mobility v. Concepcion (discussed many times on this and many other blogs).  The Second Circuit’s efforts to carve out an exception to AT&T Mobility under the “vindicating rights” doctrine are squarely on the line.  Since the “vindicating rights” doctrine seemed one of the only valid “loopholes” to AT&T Mobility, the American Express decision will surely be the most important arbitration law case coming out of hte Court this term.

I am sure my fellow Indisputably bloggers will have more to say on this in the coming days.

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