Jun 282013

Interesting to learn a little more about this case involving AmEx contractee’s restricted right to file for class action arbitration.  From the EastBayExpress.com:

The crux of the argument that Carlson, along with the other claimants in the suit, put forth is that American Express is wielding monopolistic powers by forcing restaurants to pay very high — and often obscure or hidden — fees and then also refusing to allow class-action arbitration. As Justice Elena Kagan pointed out in her dissenting opinion, the most that Italian Colors stood to win from its suit against AmEx was $38,549. However, the cost of putting together an expert report to prove that American Express had violated antitrust laws would have been at least several hundred thousand dollars. “So the expense involved in proving the claim in arbitration is ten times what Italian Colors could hope to gain, even in a best-case scenario,” Kagan wrote.

Despite those numbers, which showed that one-on-one arbitration was essentially untenable for small businesses like Italian Colors, the court ruled that the initial contract — in which restaurant owners agreed never to file a class-action lawsuit — needed to be upheld.