Those of us who have been following the Supreme Court’s decisions on class actions and arbitration over the past few years may have been a bit surprised when the Court recently upheld an arbitrator’s decision to compel class arbitration in Oxford Health Plans LLC v. Sutter. Oxford Health bucked a trend of decidedly defendant-friendly decisions on issues relating to the interplay between class actions and arbitration. Today, the Court moved back into more familiar territory in deciding American Express Co. v. Italian Colors Restaurant (“Amex III“).
The holding in Amex III, as summarized in the syllabus, is that “[t]he FAA does not permit courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.” Thus, just is it had held that state law of unconscionability could not be used to invalidate a class arbitration waiver in AT&T Mobility LLC v. Concepcion, the Court’s holding today limits the use of federal law to invalidate arbitration provisions that preclude class actions.
Will Amex III finally be the case to end class actions as we know them? Concepcion hasn’t, so I doubt Amex III will either.