PHILADELPHIA, Dec. 15 /PRNewswire/ -- Berger & Montague,
P.C. announces a tentative settlement with Bank of America, N.A.
and a related company in a 4-year-old lawsuit accusing Bank of
America and other credit card companies of unlawfully colluding to
require cardholders to arbitrate disputes, including debt
collections. The settlement is subject to court approval. The
lawsuit remains pending against Capital One, Citibank, Discover,
HSBC and the National Arbitration Forum in the United States
District Court for the Southern District of New York, as Ross, et
al. v. Bank of America, N.A., et al., No. 05-cv-7116 and was
brought as a part of In re Currency Conversation Fee Antitrust
Litigation, MDL No. 1409, also in the same court. A prior tentative
settlement was announced with Chase in November.
Under the tentative settlement, Bank of America will drop the
arbitration clause and class action ban from its consumer and small
business credit card agreements for at least 3-1/2 years beginning
in 2010. Bank of America will also immediately stop enforcing the
existing arbitration clauses against cardholders. Bank of America
further agrees not to "contract, combine or conspire" with any
other credit card company concerning arbitration. Finally, Bank of
America will make a payment toward statutory attorneys' fees, costs
and expenses. Plaintiffs will release Bank of America from
liability for placing arbitration clause in its cardholder
agreements. Bank of America will not be released for claims
stemming from actual arbitration proceedings.
Bank of America and Chase deny all wrong-doing.
The lawsuit had accused Bank of America, Capital One, Chase,
Citibank, Discover, HSBC and others of having secretly met or
consulted some 30 times for the purpose of requiring cardholders to
arbitrate all disputes with credit card companies in violation of
the antitrust laws. Arbitration is an out-of-court dispute
procedure where cases are heard, often in secret, by private
arbitrators. Consumer advocates criticize credit card arbitration
as biased and lacking many safeguards found in court proceedings
that protect consumers from over-reaching by businesses. One
purpose of the conspiracy, according to the lawsuit, was to prevent
class actions from being brought against these card issuing banks.
The lawsuit was initially dismissed by the district court but
subsequently reinstated by the Court of Appeals. The lawsuit is a
class action brought on behalf of the cardholders of the defendant
credit card companies. In June, the case was amended to add the
National Arbitration Forum as a defendant.
Other counsel for plaintiffs include Coughlin Stoia Geller
Rudman & Robbins LLP, Hulett Harper Stewart LLP and Scott +
Scott LLP, all of San Diego, California
CONTACT: Berger & Montague, P.C. Merrill G. Davidoff,
1622 Locust Street
Philadelphia, Pennsylvania 19103