WASHINGTON – Last week the U.S. Supreme Court sided with
American Express on arbitration, ruling 5 to 3 (American Express v. Italian Colors Restaurant)
that the retailers were bound by an agreement to handle disputes through
individual arbitration, even if banding together in class action was the only
way to make such a challenge economically feasible, according to The Washington
Post.
“We consider whether a contractual waiver of class arbitration
is enforceable under the Federal Arbitration Act when the plaintiff’s cost of
individually arbitrating a federal statutory claim exceeds the potential
recovery,” wrote Justice Scalia.
Experts say that the case makes it clear that a majority of
the high court will make it hard to pursue class-action arbitration claims,
writes the Post. “The Supreme Court took another big step down the road of
permitting companies to use arbitration agreements to entirely insulate
themselves from class-?action liability,” Brian Fitzpatrick, a law professor
and class-action expert at Vanderbilt University, told the newspaper, adding,
“The writing is on the wall now more clearly than ever: There is little future
for consumer and employment class actions, and even shareholder class actions
may not survive.”
The U.S. Chamber of Commerce praised the decision, saying
that it preserves the availability of arbitration — “a fair, efficient, and
economical method of alternative dispute resolution.” The Chamber said the
Supreme Court “again upheld the right of contracting parties to agree to
resolve their disputes through a system that is more accessible to consumers
and businesses than the judicial system.”