U.S. Supreme Court

Supreme Court to Hear Arbitration Case re Consumer Rights Under Credit Repair Law


The U.S. Supreme Court has agreed to hear a new arbitration dispute following a ruling last week siding with AT&T’s effort to enforce a class action waiver in a consumer contract.

The Supreme Court granted cert today in a case based on the Credit Repair Organizations Act, the Associated Press reports. At issue is whether the act allows consumers to sue their credit card company despite a contract requiring arbitration, according to the petition for certiorari (PDF posted by SCOTUSblog).

CROA provides: “You have the right to sue a credit repair organization that violates the Credit Repair Organization Act.” The San Francisco-based 9th U.S. Circuit Court of Appeals had ruled (PDF) that the language was intended to bar arbitration of claims under the law, disagreeing with two other federal appeals courts.

“We conclude that Congress meant what it said in using the term ‘sue,’ and that it did not mean ‘arbitrate,’ ” the appeals court said. “Perhaps the question is, as Alice put it: ‘whether you can make words mean so many different things?’ ”

The defendants, CompuCredit Corp. and Synovus Bank, market and issue a low-rate Aspire Visa card to people with weak credit ratings. The plaintiffs contend they were promised $300 in available credit, but were charged $257 in fees. The case is CompuCredit Corp. v. Greenwood.

In its ruling last week, the U.S. Supreme Court held that the Federal Arbitration Act pre-empted a California common-law unconscionability rule that allowed some consumers to avoid contracts in which they waived their class action rights. The case was AT&T Mobility v. Concepcion.

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