The Federal Arbitration Act (FAA) declares that contractual arbitration provisions “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”1 In well over a dozen decisions since the mid-1980s, the Supreme Court has affirmed that the FAA creates “a body of federal substantive law of arbitrability” and evinces a “national policy favoring arbitration” requiring courts to “enforce agreements to arbitrate according to their terms.”2 Although arbitration agreements containing express limitations on available statutory remedies are vulnerable to challenge, the Supreme Court has never ruled that otherwise valid agreements may be denied enforcement because individual arbitration will make certain statutory challenges more difficult.
Nevertheless, the U.S. Court of Appeals for the Second Circuit inIn re American Express Merchs. Litig. (Amex III) invalidated for the third time a class action waiver in a mandatory arbitration agreement on the ground that enforcing its provisions would effectively foreclose plaintiffs from vindicating their federal statutory rights.3 The defendants filed their petition for writ of certiorari on July 30, 2012, and the plaintiffs’ response will be due on Sept. 18.
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