In American Express v. Italian Colors (Amex), the Supreme Court held today that “a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the plaintiff ’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.”  The problem is that the decision leaves the plaintiff with no way to vindicates its rights.  The plaintiff’s maximum recovery would have been $38,000, but to proceed on its own would require an expert report from an economist that would cost between $100,000 and $1,000,000.  The contract’s confidentiality provisions prevent the plaintiff from sharing this expense with other victims.  Thus, the clause effectively precludes any method to vindicate the Sherman Act (not just class actions).  The dissent summed the import of the decision as “[t]oo darn bad.”  It really is.

Author: Matthew S. Wild, Wild Law Group PLLC