Decade-Old Arbitration Lawsuit Dismissed
Saturday, April, 12, 2014
A lawsuit filed nearly ten years ago alleging that various credit cards companies and banks, including Citibank and American Express, colluded to force credit card holders to settle disputes through arbitration has been dismissed in Federal Court.
The suit alleged that between 1999 and 2003, the credit card companies violated the Sherman Antitrust Act by meeting to discuss how to force their customers into a uniform arbitration process that was beneficial to the companies, and that the nearly identical arbitration clause language adopted by these companies was a direct result of these meetings. However, after ten years of litigation a Federal Judge ruled finally that there was insufficient evidence that the companies colluded in violation of the law. The judge noted, however, that the decision was very close and hinged on the fact that two of the named defendants in the suit had similar arbitration language prior to 1999.
The litigants had not sought any damages, but had asked the court to order the companies to remove the clauses form their credit card agreements and to ban them from introducing any similar clauses for a period of eight years. Several other banks in similar suits have settled on these claims, usually without admitting any wrongdoing, and this decision seems to confirm that arbitration clauses are here to stay in credit card agreements.