On January 30, the United States filed an amicus brief in the U.S. Supreme Court supporting the Respondents in American Express Company v. Italian Colors Restaurant, No. 12-133, an extremely important case involving the Federal Arbitration Act (FAA). As described in more detail in our legal alert issued soon after the Supreme Court agreed to hear the case, the Second Circuit had refused to enforce the class action waiver in American Express’ arbitration agreement with merchants who accept its cards on the basis that the waiver would effectively preclude the plaintiffs from prosecuting their federal antitrust claims. (More information is available in our legal alert on the Second Circuit decision.)
The question presented to the Supreme Court is “whether the Federal Arbitration Act permits courts, invoking the Federal substantive law of arbitrability, to invalidate arbitration agreements on the ground that they do not permit class arbitration of a federal law claim.” Put differently, the Supreme Court is being asked to decide whether there is an exception that should be created to the Supreme Court’s 2011 opinion in AT&T Mobility LLC v. Concepcion which held that the FAA preempted state laws that refuse to enforce class action waivers in consumer arbitration agreements as unconscionable and against public policy. (For more information on Concepcion, see our legal alert.)
The amicus brief was signed by the Solicitor General and several other lawyers in the Department of Justice. The FTC’s Acting General Counsel also signed the brief. This is the first time that the federal government has submitted an amicus brief before the U.S. Supreme Court in a case involving the FAA. I was pleased to see that the CFPB did not sign the brief since that would have raised questions about the CFPB’s impartiality in conducting the arbitration study mandated by Section 1028 of Dodd-Frank.
It might be appropriate for the CFPB to state on the record that the views expressed in the amicus brief are not the CFPB’s views. Otherwise, some might not appreciate the fact that the views of the federal government as reflected in the amicus brief are not the views of the CFPB as an independent agency.