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U.S. Supreme Court rejects claim that class waiver in arbitration clause fails to effectively vindicate federal statutory rights

June 21, 2013
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Published in American Express Co. v. Italian Colors Restaurant

(June 20, 2013, No. 12-133) 

Extending its recent string of pro-arbitration decisions, the U.S. Supreme Court ruled that an arbitration clause containing a waiver of the right to proceed on a classwide basis is valid and enforceable in a lawsuit asserting federal antitrust claims, even if it is uneconomical to proceed with the claims on an individual basis.

The Supreme Court reaffirmed that arbitration clauses must be rigorously enforced according to their terms, including where they foreclose class proceedings, and that this principle applies to federal statutory claims unless they contain a contrary congressional command. The Court held that federal antitrust laws do not embody any congressional command against class waivers in arbitration clauses.

The Court also clarified the “vindication” principle. The Court has previously suggested that under this principle arbitration clauses need not be enforced if they operate as prospective waivers of a party’s right to pursue federal statutory claims. The Court explained that this principle is limited to provisions forbidding the assertion of statutory claims in arbitration and may also prohibit filing or administrative fees so excessive as to preclude access to the arbitral forum. The Court held that the vindication principle is not violated by a class waiver requiring individual arbitration, including where the expense involved in proving a claim on an individual basis renders it uneconomical to proceed in the absence of a class action.