Antitrust Law
Credit Card Cos. Can Be Sued for Forcing Arbitration, 2nd Circuit Says
Posted Apr 25, 2008, 10:15 am CST
By Martha Neil
Updated: A class action by credit card holders over mandatory arbitration provisions imposed by credit card issuers can proceed to trial, a federal appeals court has ruled.
The New York City-based 2nd U.S. Circuit Court of Appeals decision today overturns a district court ruling that the cardholders did not have a viable case, Reuters reports.
By alleging that the defendant banks and co-conspirators "illegally colluded to force the cardholders to accept mandatory arbitration clauses in their cardholder agreements," the plaintiffs adequately alleged antitrust claims, the appeals court said in its opinion (PDF), a copy of which was provided by the Wall Street Journal Law Blog.
Related coverage:
Creditcards.com: "Credit card arbitration: What it is, how it works"
San Francisco Chronicle: "S.F. sues credit card service, alleging bias"
Wall Street Journal (sub. req.): "San Francisco Sues Provider of Arbitrators"
Updated at 5:10 p.m., central time, to provide copy of opinion and link to Wall Street Journal Law Blog post.