Yesterday, the district court for the Southern District of New York released its much-anticipated decision following a bench trial in Ross v. American Express, No. 04 Civ. 5723 (Apr. 10, 2014) (click here for a copy of the decision). In these consolidated class actions, the plaintiffs alleged that credit card issuers collusively adopted arbitration agreements with class action waivers in violation of the antitrust laws. The court issued a 92-page opinion finding in favor of the defendants. The findings of fact chronicle a fascinating, behind-the-scenes history of how and why some of the largest companies in America cooperated in an effort to use arbitration clauses with class action waivers.
Ultimately, the court concluded that although there was consciously parallel behavior among the alleged conspirators (which is not illegal under the antitrust laws and which is expected in an oligopolistic market like the credit card industry), the plaintiffs failed to demonstrate an agreement among the defendants to implement and maintain arbitration clauses. An agreement is critical for a section 1 violation of the Sherman Act. In dicta, the court noted that because the defendants had failed to submit pro-competitive justifications for their behavior, their conduct would have been an illegal, unreasonable restraint on trade if the plaintiffs had established the existence of an agreement.