Berger & Montague as lead counsel for the cardholder classes
has obtained final approval of settlements reached with four of the
nation's largest credit card companies, Chase, Bank of America,
Capital One and HSBC. The lawsuit alleges that six major
credit card banks, and one arbitration provider, unlawfully
colluded to require cardholders to arbitrate disputes, including
debt collections, and to preclude cardholders from participating in
any class actions.
The settlements remove arbitration clauses nationwide from the
so-called "cardholder agreements" for over 100 million credit card
holders. This victory for consumers and small businesses
comes after nearly five years of hard-fought litigation, including
obtaining a decision by the Court of Appeals reversing the District
Court's order dismissing the case, on claims that the defendant
banks unlawfully acted in concert to require cardholders to
arbitrate disputes, including debt collections, and to preclude
cardholders from participating in any class actions. Each of
the settling banks has agreed to drop their arbitration clauses and
class action bans until at least late 2013. This achievement
will aid consumers and small businesses in their ability to resist
unfair and abusive credit card practices. Berger &
Montague continues to litigate this case against card issuer
defendants Citibank and Discover, as well as a related case against
American Express, Ross, et al. v. American Express Co., et
al., No. 04-cv-5723 (S.D.N.Y., Pauley, J.), in the same
court.
In June 2009, the National Arbitration Forum (or "NAF") was
added as a defendant. Berger & Montague has also reached
a preliminary settlement with NAF. Under that agreement, NAF
will cease administering arbitration proceedings involving business
cards for a period of three and one-half (3.5) years, which relief
is in addition to the requirements of a Consent Judgment with the
State of Minnesota, entered into by the NAF on July 24, 2009.