In what would have been bigger class action news yesterday had the Supreme Court not issued its decision in Amgen, the Court also heard oral argument in class arbitration case, American Express Co. v. Italian Colors Restaurant, No. 12-133 (click case title for a link to the transcript). The primary issue presented is whether the “federal substantive law of arbitrability” may be invoked to invalidate an arbitration agreement in a case involving federal law claims. The case will test the limits of the Supreme Court’s holding in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (holding that the Federal Arbitration Act preempts state laws prohibiting class arbitration waivers).
It is clear from the questions posed by the Justices that there are certain members of the Court (namely Justice Scalia, author of Concepcion) who remain steadfast in their belief that arbitration agreements that prohibit class claims are enforceable, period, and that there is another faction of the court that has serious doubts about the use of an arbitration agreement to effectively foreclose a litigant from obtaining any meaningful procedure for vindicating his or her rights. Whether this case follows Concepcion in solidifying the enforceability of class arbitration waivers or carves out an exception will likely depend on a few swing votes in the middle.