On June 20, 2013the Supreme Court announced its decision in American Express Co. v. Italian Colors Restaurant. The question here was whether the Federal Arbitration Act (FAA) permits courts to invalidate a contractual waiver of class arbitration on credit card “swipe fees” if the cost to the plaintiff of arbitrating individually exceeded any possible individual recovery.
In an opinion delivered by Justice Scalia, the Court held by a vote of 5-3 that the FAA does not permit courts to invalidate a contractual waiver of class arbitration on the grounds that a plaintiff’s cost of arbitrating his individual claim exceeds any potential recovery. Chief Justice Roberts and Justices Kennedy, Thomas, and Alito joined the majority opinion. Justice Thomas filed a concurring opinion. Justice Kagan filed a dissenting opinion, which was joined by Justices Ginsburg and Breyer. Justice Sotomayor took no part in the consideration or decision of the case.
To discuss the case, we have Christopher Kratovil, who is a member of Dykema’s Litigation practice in the Firm’s Dallas office.