Alert May 06, 2008

Federal Appeals Court Rules Credit Card Customers Have Standing to Sue Over Arbitration Agreements

The Second Circuit recently held that credit card customers have constitutional standing to sue credit card issuers for violations of federal antitrust law when those issuers impose mandatory arbitration agreements. Plaintiffs’ complaint alleged that credit card issuers violated federal antitrust law by conspiring to force customers to sign arbitration agreements. The Court held that plaintiffs alleged more than hypothetical injuries if forced to arbitrate in the future, but also sufficiently alleged present injuries, including the “reduction in choice and diminished quality of credit services.” The Court found the allegation of such present injuries sufficient to create constitutional standing, thus making the claims ripe for adjudication. The Court did not address whether the plaintiffs had standing to sue under federal antitrust law. Click here for a copy of Ross v. Bank of America, No. 06-4755 (2d Cir. Apr. 25, 2008).