Another Arbitration Case Going to the Supreme Court
The U.S. Supreme Court is hearing another case regarding the enforceability of mandatory arbitration agreements and class action bans following its devastating decision in AT&T v. Concepcion in 2011. This one involves a suit by merchants over whether they must accept all American Express cards or only the traditional Amex cards that require full payment at the end of the month. The liberals on the Court are a vote down because Justice Sotomayor participated in the decision at the Court of Appeals and will not participate in the Supreme Court case. Not good.
Mandatory arbitration agreements and bans on class action bans often prevent consumers, including Kentucky consumers from vindicating their rights when businesses do wrong by them. The question in this case is whether the cost of arbitration or an individual action (when compared to the dollar amount at stake in the case) is enough to invalidate a mandatory arbitration provision or a provision banning class actions in a contract.
The merchants told the Supreme Court that the most any of them could hope to recover in damages is $38,549, far less than what it would cost to marshal the evidence to prove their case.