2nd Cir. Refuses to Enforce Class Arbitration Waiver in Amex Case

NEW YORK - A class arbitration waiver does not bar a class of merchants from arbitrating their claims against American Express Co. because they have proved that enforcement of the waiver would effectively preclude any action seeking to vindicate the statutory rights, a federal appeals court has ruled. In re American Express Merchants' Litigation, No. 06-1871 (2nd Cir.).

The 2nd Circuit U.S. Court of Appeals ruled that the merchants proffered sufficient evidence showing that arbitrating their claims on an individual basis would be prohibitively expensive.

A putative class of merchants sued Amex in the U.S. District Court for the Southern …