The U.S. Supreme Court Knocks Out Yet Another Class Action Lawsuit in American Express v. Italian Colors Restaurant

On June 20th the U.S. Supreme Court issued yet another decision in a series of decisions which has made it harder for plaintiffs to pursue class action lawsuits against businesses. In American Express v. Italian Colors Restaurant, 570 U.S. ___ (2013), the Supreme Court dismissed a class-action lawsuit against American Express over the card fees it charges.  An Oakland, CA eatery called Italian Colors Restaurant was seeking to team up with other merchants in its suit.  They argued that damages by any individual business would be belittled by the legal costs of battling American Express alone.  American express replied that according to the contract they had signed with the card issuer, the merchants had to bring their claim individually through arbitration.  Justice Scalia determined that the contract must stand. He stated that the fact that it is not worth the expense involved to prove a case doesn't eliminate plaintiff’s legal rights. The American Express decision is the third class action decision which works in the favor of businesses plagued by class action lawsuits such a collection agencies and credit reporting agencies. The decision represents a trifecta win considering the 2011 decision Dukes v. Wal-Mart in which the Supreme Court knocked out a gender discrimination class action lawsuit because the Plaintiff could not establish required class elements, and the recent decision in Comcast v. Behrend, in which the Court ruled subscribers alleging anti-competitive practices couldn't proceed as a class action because there was no good way to determine class members' monetary damages.

Although these decisions show the court recognizing problems with lawyer-driven class actions that often don’t provide effective remedies for plaintiffs, they don’t end the prospect of class action liability in all situations.  Feel free to contact Joe Messer at (312) 334-3440 or to see how you can take advantage of the case law developed in these decisions to avoid class action liability for your business.