"In American Express v. Italian Colors Restaurant, American Express (Amex) entered into agreements with Italian Colors Restauran
t and other merchants that accept American Express credit cards. The agreement required that all disputes be settled through arbitration and prohibited class actions. The merchants filed a class action antitrust claim against Amex, arguing that they should be allowed to bring the claim as a class because the cost of expert analysis to prove the case exceeded the maximum recovery available to an individual merchant plaintiff. How did the U.S. Supreme Court decide?
U.S Supreme Court ruled in favor of American Express (Amex)
Explanation:
The sequence of decisions is reproduced as follows;
1.The trail court ruled in favor of Amex
2. On petition to federal court by the other party, the federal court reversed and overturned the decision of trial court and decided that the clause was not forcible because of the exorbitant cost structure and scenario.
3.U.S Supreme again ruled in favor of Amex where U.S supreme court upheld that Federal Arbitration Act does not allow the judiciary to null and void a contractual relinquishment of the legal rights based merely on the grounds that Italian colors restaurant's dispute resolution costs exceed any potential amounts to be recovered.
