Financial Regulatory Report

This posting was written by Victoria Holstein-Childress.

On June 20, 2013, the U.S. Supreme Court issued its much anticipated decision American Express Co. v. Italian Colors Restaurant reflecting its latest views on arbitration agreements. In a 5 to 3 decision (with Justice Sotomayor recused), the Court ruled that a group of merchants were bound by an arbitration agreement that prohibits them from bringing class action claims against American Express, even if the cost of arbitrating antitrust claims on an individual basis is prohibitive. The Court, in an opinion penned by Justice Scalia, concluded that nothing in the Federal Arbitration Act (FAA) allows courts to invalidate a contractual waiver of class arbitration on the ground that the plaintiff's cost of individually arbitrating a federal statutory claim exceeds the potential recovery. For the full analysis of this important development click here.

Victoria Holstein-Childress is a partner in the Financial Industry Group at Reed Smith LLP, resident in the firm’s Washington, D.C. and Los Angeles offices. Victoria focuses on financial services litigation and enforcement matters, and is Chair of the ABA’s Consumer Financial Services Subcommittee of the Consumer Litigation Committee.