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Credit card companies go to trial over arbitration agreement

Customers claim arbitration is not “fair venue”

The arbitration issue is rearing its head again, this time against credit card issuers American Express Co., Discover Financial Services and Citigroup Inc. A trial began on Monday before U.S. District Judge William Pauley, in which the three companies will defend themselves against two antitrust lawsuits filed by cardholders.

The suits allege that the companies were in cahoots, forcing customers to sign arbitration agreements and keeping them from filing class action lawsuits. The cardholders are not seeking damages, but are asking the judge to remove the arbitration clauses from their agreements.

The 2011 Supreme Court case AT&T v. Concepcion gave more power to corporations to require the arbitration of disputes. But in this case, lead plaintiff Robert Ross said he did not believe arbitration was a “fair venue” for customers.

"If the average consumer was aware of the costs they'd have to bear in arbitration, they wouldn't do it," Ross said in his testimony.

Read more at Thomson Reuters.


For more arbitration coverage on InsideCounsel, see below:

5 things to know about Texas arbitration law

Litigation: Arbitration’s legal landscape

Which costs less: Arbitration or litigation?

Litigation: Federal judge strikes down confidential arbitration in Delaware’s Court of Chancery

Litigation: When, why and how arbitration can help obtain better results at lower costs

Goldman Sachs seeks to enforce arbitration in gender discrimination case

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