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Jul 11, 2013 by |

Supreme Court Arbitration Decision Undermines Antitrust Laws

ATTORNEY NEWSLETTER

In a recent case, the U.S. Supreme Court said that take-it-or leave-it arbitration clauses could be used to prevent small businesses from pursuing their claims for abuse of monopoly power under the antitrust laws.  Prior to this ruling, the U.S. Supreme Court has said that arbitration clauses should only be enforced when a party could effectively vindicate its statutory rights.  The five conservative justices on the court voted together and said that arbitration clauses should be enforced even when they make it impossible for parties to actually vindicate their statutory rights. 

In this case, the plaintiffs alleged that American Express used its monopoly power over its charge card to force them to accept American Express credit cards, thus paying higher rates than they would for other credit cards.  American Express is accused of using its monopoly power over one product to increase the price of another product to higher rates than it could charge in a competitive market.

Since the arbitration clause, and its ban on class actions, was enforced in this case this means that none of the small businesses in the case can enforce their rights under antitrust laws.

The conservative voting block on the U.S. Supreme Court has effectively made arbitration clauses a mechanism to block the vindication of meritorious federal claims and insulate wrongdoers from liability.  The end result of this majority opinion is that arbitration clauses can now be used to shield companies from any possibility of class action liability.

Evans Law Firm, Inc. handles consumer fraud class actions, insurance and banking fraud, consumer product liability, elder abuse, and personal injury cases.  If you think that you have witnessed or are the victim of financial fraud by an insurance company, bank or individual then, contact Evans Law Firm, Inc. at 415-441-8669 for a free and confidential consultation, or email info@evanslaw.com

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