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American Express Co. v. Italian Colors Restaurant

Summarized by: 

Date Filed: June 20, 2013
Case #: 12-133
Scalia, J., delivered the opinion of the Court, in which Roberts, C. J., and Kennedy, Thomas, and Alito, JJ., joined. Thomas, J., filed a concurring opinion. Kagan, J., filed a dissenting opinion, in which Ginsburg and Breyer, JJ., joined. Sotomayor, J., took no part in the consideration or decision of the case.
Full Text Opinion: http://www.supremecourt.gov/opinions/12pdf/12-133_19m1.pdf

Arbitration: A contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the cost of individual arbitration of federal claim exceeds the potential recovery.

Petitioner and Respondent entered into a contractual agreement to resolve disputes through arbitration. Additionally, the agreement provided that no claims would be arbitrated on a class action basis. Respondent brought a class action against Petitioner for violations of the federal antitrust laws. Petitioner moved to compel individual arbitration under the Federal Arbitration Act. The lower court granted the motion and dismissed the lawsuits. The Court of Appeals reversed, remanded, and held that due to the prohibitive costs of individual arbitration the class action waiver was unenforceable.

Petitioner appealed the the Supreme Court. The Court vacated, remanded and held that arbitration is a matter of contract. A contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the cost of individual arbitration of federal claim exceeds the potential recovery. Further the Court held that there is no contrary congressional command to reject class action waivers.