by Jeremy Leaming
During her featured remarks at the 2013 ACS National Convention, Sen. Elizabeth Warren (D-Mass.) ripped the federal bench, and the Supreme Court in particular, for a pro-corporate trend. Today the high court issued an opinion in American Express Company v. Italian Colors Restaurant that buttresses Warren’s sharp critique.
In the American Express case, the Court’s right-wing justices found that the Federal Arbitration Act (FAA) blocks courts from invalidating contractual waivers of class arbitration, another blow to individuals hoping to band together to hold corporations accountable for malfeasance. A group of merchants who accept American Express cards had lodged a class action against the financial giant arguing that its rate on accepting American Express cards violated federal antitrust laws. The high court led by Justice Antonin Scalia, however, essentially held that a clause in the American Express agreement barring class action arbitration trumped antitrust laws.
Scalia maintained that the FAA was enacted by Congress as a “response to widespread judicial hostility to arbitration” and that its text “reflects the overarching principle that arbitration is a matter of contract. There is no ‘contrary congressional command’ that “requires us to reject the waiver of class arbitration here,” Scalia wrote.
Scalia notes the merchants argued that forcing them to litigate individually would prove too costly, but concluded “the antitrust laws do not guarantee an affordable path to the vindication of every claim.” Later in the opinion, Scalia writes, “But the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.”
As Media Matters’ Senior Counsel & Director of its Courts Matter project Lara Schwartz noted, “In other words, Scalia essentially was saying it’s OK if the rules make it impossible to win as long as they don’t make it impossible to play.
Justice Elena Kagan lodged a dissent, joined by Justices Ruth Bader Ginsburg and Stephen Breyer. (Justice Sonia Sotomayor recused herself in this case). Kagan wrote, that the “owner of a small restaurant (Italian Colors) thinks that American Express (Amex) has used its monopoly power to force merchants to accept a form contract violating the antitrust laws.” But that same agreement with Amex barred the restaurateur from bringing the claim.
“And here is the nutshell version of today’s opinion, admirably flaunted rather than camouflaged: Too darn bad.”