In American Express Co. v. Italian Colors Restaurant, Case No. 12-133, 570 U.S. __ (June 20, 2013), the United States Supreme Court once again held that the Federal Arbitration Act (FAA) does not permit courts to invalidate class action waivers in arbitration agreements on grounds that a plaintiff’s cost of individually arbitrating his claims – this time a federal statutory claim – exceeds the potential recovery. As the Court recognized, its decision in AT&T Mobility LLC v. Concepcion, 563 U.S. __ (2011) “all but resolves this case.” American Express follows on the heels of another arbitration decision issued earlier this month – Oxford Health Plans LLC v. Sutter, No. 12-135, 569 U.S. (June 10, 2013) – in which the Court refused to overrule an arbitrator’s determination that an arbitration agreement permitted class arbitration.
These latest arbitration rulings from the Supreme Court are likely to have a significant impact on many types of litigation, placing a sharper focus on the applicability and impact of arbitration agreements in defining how disputes between parties will be resolved. They also emphasize the importance of carefully drafting arbitration agreements to appropriately reflect the nature of the arbitration proceeding anticipated by the parties.