Posted: February 10, 2012
By: Allison Frankel
Source: Thompson Reuters News and Insight
Practice Areas: Antitrust, Consumer Protection
Litigation over arbitration clauses is as ubiquitous as Marc
Jacobs frocks at Lincoln Center during New York's Fashion Week.
(Not a fashionista? Then let's just say we here at On the Case
can't stop writing about plaintiffs trying to get around mandatory
arbitration clauses.) But rarely do we stop to think about how such
clauses became standard in consumer contracts.
An order issued Wednesday by U.S. District Judge William Pauley
of Manhattan federal court tells the story -- or, at least,
plaintiffs' version of the story -- of how arbitration clauses
ended up in the contracts governing all those credit cards in your
wallet. Pauley seems to believe it's an important tale. He refused
to grant a motion for summary judgment by Citigroup and Discover,
who asked him to dismiss class action claims that credit card
companies engaged in collusion to make arbitration clauses the
industry standard. If lead class counsel Merrill Davidoff
of Berger & Montague continues to have things
go his way, the post-trial outcome could be a removal of the
credit-card arbitration clauses altogether.
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