US: Plaintiffs come up short in credit card arbitration fight

A federal judge awarded the dismissal of a lawsuit against major credit card issuers accused of illegally colluding to prevent consumers from bring class actions against the companies, say reports.

US District Judge William Pauley said cardholders did not adequately show American Express, Citigroup and Discover Financial Services colluded to adopt arbitration clauses in their contracts with customers. Those clauses required legal disputes to be settled in arbitration and barred customers from forming a class action against a card issuer.

The plaintiffs accused the three of holding meetings between 1999 and 2003 in which a total of 10 issuers discussed such arbitration clauses.

But the lawsuit was dismissed, despite Judge Pauley acknowledging “conscious parallel action” between the companies.

”It was only by a slender reed that plaintiffs failed to demonstrate that the lawyers who organized these meetings had spawned a Sherman Act conspiracy among their clients,” the judge wrote in his ruling. The decision follows a non-jury trial last year.

The case failed to repeat the outcome seen in 2010 when card issuers Bank of America, Capital One, HSBC Holdings and JPMorgan Chase settled with cardholders and agreed not to use arbitration clauses in their contracts for more than three years.

Full Content: Reuters

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