/* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman"; mso-ansi-language:#0400; mso-fareast-language:#0400; mso-bidi-language:#0400;}

A panel of federal judges last week ruled that American Express Co. cannot bar merchants from bringing antitrust class-action claims against the company. The 2nd U.S. Court of Appeals in New York on Jan. 30 struck down a clause in AmEx's contracts requiring merchants to resolve disputes through arbitration. The ruling is a victory for merchants and "a real blow" to AmEx, K. Craig Wildfang, a partner with the Minneapolis-based law firm of Robins, Kaplan, Miller & Ciresi LLP, tells CardLine. Wildfang is one of the chief litigators in a long-running antitrust case against AmEx on behalf of merchants. "AmEx has tried to use clauses in its contracts with merchants requiring arbitration and no class-action lawsuits for settling disputes, making it impossible for individuals and businesses to challenge unlawful conduct in court." In a 36-page ruling for a three-judge panel, Judge Rosemary Pooler reversed a lower-court decision upholding AmEx's "mandatory arbitration clause" that blocked merchants from bringing claims as a group. The ruling reinstates the case against AmEx by a group of small merchants claiming that AmEx forced them to pay excessive fees on credit cards marketed to students and young adults. "We are somewhat disappointment with the decision but encouraged that the court found the arbitration clause may be enforced in other circumstances," says an AmEx spokesperson. "We will continue to review the decision and consider our options."

 

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry