American Express Co. v. Italian Colors Restaurant

Facts

The respondents, Italian Colors Restaurant and other merchants, accept American Express cards and entered into an agreement with American Express that contained an arbitration clause requiring all disputes to be resolved by arbitration and explicitly prohibiting class arbitration. The merchants brought a class action against American Express for violations of federal antitrust laws, alleging that American Express used its monopoly power in the charge card market to force merchants to accept credit cards at rates approximately 30% higher than fees for competing credit cards, constituting an illegal tying arrangement in violation of the Sherman Act. The merchants sought treble damages under the Clayton Act. American Express moved to compel individual arbitration under the FAA. The merchants submitted evidence that the cost of the expert analysis necessary to prove the antitrust claims would be “at least several hundred thousand dollars, and might exceed $1 million,” while the maximum recovery for an individual plaintiff would be $38,549 when trebled. They argued that enforcing the class-action waiver would effectively prevent them from vindicating their federal statutory rights because the cost of pursuing their antitrust claims individually would far exceed their potential recovery.