The Supreme Court’s radical ruling for the proverbial 1%

The latest decision by the Supreme Court about the arbitration of statutory claims will, going forward, preclude court action even when doing so deprives small businesses and many people of any meaningful legal recourse. In rendering such an extreme opinion, the 5-Justice majority – led by Justice Antonin Scalia – went against decades of settled Supreme Court precedent and the submissions of arbitration scholars. Once again, the Supreme Court Justices who have typically been most critical of supposed judicial activism are the ones actually engaging in judicial activism.

At issue in the case, American Express Co. v. Italian Colors Restaurant, was whether an arbitration clause in credit contracts is enforceable such that class action claims of small businesses cannot be pursued against American Express for statutory antitrust violations. The 5-Justice majority ruled in the affirmative. As stated in a prior posting here, this result is not surprising – even as the opinion is shocking in its disregard for the rule of law. Importantly, American Express dramatically impedes those who seek to enforce employment law, civil rights, and consumer protection statutes in court. The opinion also represents a further restriction of class action and collective action litigation, thereby facilitating future corporate impunity as a practical matter.

Some commentators have observed that American Express has transformed the Federal Arbitration Act into the most important law of the land, trumping all other statutes. This is a remarkable departure considering the Supreme Court has long emphasized that a plaintiff in an employment law or civil rights case serves as “a ‘private attorney general,’ vindicating a policy ‘of the highest priority.’” N.Y. Gaslight Club, Inc. v. Carey, 447 U.S. 54, 63 (1980); see also Burlington North and Santa Fe Ry. Co. v. White, 548 U.S. 53 (2006). To the contrary, the 5 Justices signing off on American Express appear to think that keeping aggrieved claimants out of court is a policy of the highest priority. This portends very difficult times ahead for those seeking redress under employment law, civil rights, or consumer protection statues.