Kensington Antitrust Advisors Group

The Second Circuit has reaffirmed its decision that a merchant class action challenging the fees that American Express charges merchants to accept its cards can move forward.  The merchants argued that AmEx unlawfully tied the acceptance of its charge cards to acceptance of its credit cards.  Although the merchants are willing to pay a premium to accept the charge cards, they contend that the credit cards should be priced lower.  The district court originally dismissed the case on the ground that many merchants had contracts requiring them to arbitrate claims against AmEx.  The Second Circuit held that the question whether a waiver was valid was a question for the court, not an arbitrator.  The court further held that the waiver was unenforceable because it would effectively strip the merchants of their ability to prosecute their antitrust claims.  The U.S. Supreme Court vacated and remanded the decision, instructing the Second Circuit to reconsider the case in light of the Supreme Court’s decision in Stolt-Nielsen, which held that class arbitration could not be forced on parties that had not agreed to it.  The Second Circuit reaffirmed its earlier decision, holding that Stolt-Nielsen did not require courts to enforce class action waiver provisions.