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Citi, Discover Can't Shake Credit Card Antitrust Suit Over Arbitration

Posted: February 13, 2012
By: Nate Raymond
Source: The American Lawyer; also in The AmLaw Litigation Daily
Practice Areas: Antitrust, Consumer Protection


A federal judge in Manhattan on Wednesday denied a bid by Citigroup Inc. and Discover Bank to dismiss a long-running antitrust suit accusing them of conspiring with American Express and Wells Fargo to impose mandatory arbitration clauses on credit card holders from 1999 to 2003. And as detailed in the decision, much of the alleged conspiracy unfolded alongside the banks' in-house and outside counsel.

Citi and Discover are the two remaining defendants in the suit, which Berger & Montague filed in 2005. (American Express, which continues to face similar claims, was sued separately in 2004.) As a result of settlement agreements with Bank of America, HSBC, Capital One, and JPMorgan Chase, hundreds of millions of arbitration clauses have been eliminated from those banks' customer agreements, Merrill Davidoff of Berger & Montague told us.

"Obviously they viewed it sensible to settle these cases two years ago," said Davidoff, whose firm also recovered at least $385.6 million in settlements over related claims that the banks manipulated foreign exchange conversion fees. "We think we have a strong case [against Citi and Discover] and we'll take the case to trial."

View the full article here.