American Express, Citigroup, and Discover Financial Services won the dismissal of a lawsuit accusing them of colluding to adopt arbitration clauses that prevent credit card holders from pursuing class action lawsuits in court.
U.S. District Judge William Pauley in Manhattan on Thursday said the plaintiffs had failed to show, after roughly a decade of litigation, that the defendants violated the Sherman Act, a federal antitrust law. Several other banks previously settled similar claims.
The plaintiffs argued that banks and their lawyers held dozens of meetings from 1999 to 2003 to discuss how to adopt mandatory arbitration clauses for cardholders, and that most of the card industry ultimately adopted nearly identical clauses.
Pauley said his decision was a close call, noting that of 10 card-issuing banks that had been part of the litigation, just two had such clauses at the start of the alleged collusion.