As for a bit of background, the purported class was made up of merchants that accept American Express (“AmEx”) cards.  The merchants’ agreement with AmEx contains a clause that requires all disputes between the parties to be resolved by arbitration.  Said agreement also provides “[t]here shall be no right or authority for any Claims to be arbitrated on a class action basis.”  Pretty straight forward. 

Unhappy with AmEx’s fees, the merchants brought a class action against American Express alleging that AmEx used its monopoly power to force them to accept credit cards at rates approximately 30% higher than the fees for competing credit cards.  AmEx moved to compel individual arbitration and the merchants resisted, arguing that the cost of expert analysis necessary to prove their claims would be “at least several hundred thousand dollars, and might exceed $1 million,” while the maximum recovery for an individual plaintiff would be well under $50,000.  The District Court granted the motion compelling individual arbitration, however the Court of Appeals reversed, holding that because the merchants had established that “they would incur prohibitive costs if compelled to arbitrate under the class action waiver,” the arbitration waiver was unenforceable.  In re American Express Merchants’ Litigation, 554 F. 3d 300, 315-16 (CA2 2009).  The Second Circuit sua sponte reconsidered its ruling in light of AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), however, found AT&T Mobility inapplicable because it addressed pre-emption.  The Supreme Court granted certiorari. 

Writing for the majority, Justice Scalia reasoned that so long as the parties’ contract does not enact formal barriers to individualized arbitration of antitrust claims, the fact that the contract practically precludes individual arbitration of such claims, because the cost of arbitration far exceeds the potential recovery, is of no importance to the Court.  Once again, the Court emphasized that if the parties agree to arbitration, to arbitration they will go, irrespective of the fact that a dispute is framed as a class action, irrespective of the nature of the claim, and irrespective of the small amount of money at stake.