Posted by Social Science Research Network
Antitrust Arbitration and Merger Approval– Mark A. Lemley (Stanford Law School) & Christopher R. Leslie (University of California)
Abstract: In a string of recent opinions, the Supreme Court has made it harder for consumers to avoid arbitration clauses, even when businesses strategically insert provisions in them that effectively prevent consumers from being able to bring any claim in any forum. In American Express Co. v. Italian Colors Restaurant, an antitrust case, the Court held that class-action waivers embedded in mandatory arbitration clauses were enforceable even when they had the effect of making it economically irrational for the victims of antitrust violations to pursue their claims.
Courts have long considered antitrust claims to be too complex and too important to trust to private arbitrators. By the 1980s, the Supreme Court permitted federal statutory rights, including antitrust claims, to be arbitrated so long as the plaintiffs could effectively vindicate their rights in the alternative forum. In 2013, the Supreme Court in Italian Colors fundamentally weakened the Effective Vindication Doctrine when it held that arbitration clauses that precluded class actions and classwide arbitration were enforceable even when they effectively prohibited all individual plaintiffs from bringing a case.
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