Second Circuit Holds Class Action Waiver Unenforceable in American Express Arbitration Agreement Despite the Supreme Court’s Recent Decision in Stolt-Nielsen


In May 2010, the Supreme Court directed the Second Circuit to reconsider its decision in In re American Express Litigation regarding the unenforceability of a class action waiver in light of the Supreme Court’s decision in Stolt-Nielsen, S.A. v. AnimalFeeds Int’l Corp., 130 S. Ct. 1758 (2010). See American Express Company v. Italian Colors Restaurant, 130 S. Ct. 2401 (Mem.) (May 3, 2010) (vacating 554 F.3d 300 (2d Cir. 2009)). On remand, the Second Circuit found its original analysis unaffected by Stolt-Nielsen and held that the class action waiver within the arbitration agreement was unenforceable because “the cost of plaintiffs’ individually arbitrating their dispute with Amex would be prohibitive, effectively depriving plaintiffs of the statutory protections of the antitrust laws.” In re American Express, No. 06-1871 at 3, 18 (2d Cir. March 8, 2011).

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