Five members of the U.S. Supreme Court must think that class actions do nothing but bad.
They must believe that Rule 23, which allows class actions, rots the moral fiber of our citizens.
That it stands as an insult to our noble but fragile job-creators, who respond by withholding their business genius and in their just anger simply refuse to put people to work.
That class actions serve no good purpose.
That they do nothing but enrich plaintiffs' lawyers, who by the way are so evil they don't realize their evilness.
Blawgletter says that because today the Five gave another mighty clout to the class action, striking down two of the Court's own precedents barring arbitration agreements that have the effect of frustrating the vindication of federal rights.
The case involved merchants who claimed that American Express abused its monopoly position in charge cards to force the merchants to pay 30 percent more in transaction fees than a competitive price. But the merchants had a problem. American Express had required them to accept a form contract into which American Express had inserted provisions that made recouping the expense of bringing an antitrust claim impossible -- a fact that the merchants proved beyond doubt. Citing the Supreme Court itself, the Second Circuit held that the American Express contract deprived the merchants of the ability to "vindicate" their statutory rights and accordingly struck down the offending provisions, including a ban on class treatment of the merchants' claims.
The majority said fine. We will let Justice Elena Kagan's dissent speak for us:
The Court today mistakes what this case is about. To a hammer, everything looks like a nail. And to a Court bent on diminishing the usefulness of Rule 23, everything looks like a class action, ready to be dismantled. So the Court does not consider that Amex’s agreement bars not just class actions, but “other forms of cost-sharing . . . that could provide effective vindication.” Ante, at 7, n. 4. In short, the Court does not consider—and does not decide—Italian Colors’s (and similarly situated litigants’) actual argument about why the effective-vindication rule precludes this agreement’s enforcement.
As a result, Amex's contract will succeed in depriving Italian Colors of any effective opportunity to challenge monopolistic conduct allegedly in violation of the Sherman Act. The FAA, the majority says, so requires. Do not be fooled. Only the Court so requires; the FAA was never meant to produce this outcome. The FAA conceived of arbitration as a “method of resolving disputes”—a way of using tailored and streamlined procedures to facilitate redress of injuries. Rodriguez de Quijas, 490 U. S., at 481 (emphasis added). In the hands of today’s majority, arbitration threatens to become more nearly the opposite—a mechanism easily made to block the vindication of merito- rious federal claims and insulate wrongdoers from liability. The Court thus undermines the FAA no less than it does the Sherman Act and other federal statutes providing rights of action. I respectfully dissent.
Am. Express Co. v. Italian Colors Restaurant, No. 12-146, slip op. 14-15 (U.S. June 20, 2013) (Kagan, J., dissenting).