In a win for large corporations, the U.S. Supreme Court ruled in favor of the forfeiture of the right to sue large corporations that have inserted arbitration clauses into their contracts. In American Express vs. Italian Colors, a class action suit, the Court ruled in favor of American Express in the face of an antitrust suit. American Express had an arbitration clause in its contract. The ruling now legally bars small vendors and consumers from banding together and filing a class action suit in such cases.

Ballard Spahr's Consumer Financial Services Practice Leader Alan S. Kaplinsky explained what the decision means for small businesses and consumers.

"You won't be able to be in a class action in court. You'll either have to resolve your case informally with the company, or you'll have to go to arbitration."

Mr. Kaplinksy also addressed how the decision affects current cases. “It’s very exciting for the industry because the court basically wrote a very broad opinion.” In reference to the opposition of class waivers, he stated, “Those arguments have been swept away. That affects a lot of other cases out there.”

Related Practices

Consumer Class Action Litigation
Consumer Financial Services