WASHINGTON, D.C. (June 25, 2013) – The Supreme Court has handed large corporations a significant victory in a decision that represents a further erosion of consumer rights and underscores the need for Congress to take action to prohibit forced arbitration, the North American Securities Administrators Association (NASAA) said today.
Last week, the Supreme Court issued its opinion in American Express Co. v. Italian Colors Restaurant, holding that a group of merchants were bound by individual arbitration agreements with American Express even if a class action is the only way to make the claim economically viable.
The decision, which supported the enforceability of an arbitration agreement’s class action waiver, has sparked mounting outrage among public interest, civil rights and consumer groups.
“The Supreme Court’s ruling effectively invites large corporations to use arbitration agreements to disregard effective vindication of consumer claims through class actions,” said Heath Abshure, NASAA President and Arkansas Securities Commissioner.
“It is disappointing that the Supreme Court would turn a blind eye to the injustice of allowing large corporate interests to deny small businesses and individuals their day in court,” Abshure said. “It is now up to Congress to restore some vestige of consumer protection by prompt remedial legislation to restore the scales of justice to balance.”
To ensure that victims of securities fraud will have recourse, NASAA has urged Congress to explore amending federal law to ensure that all investors, especially those investing small amounts, have a reasonable avenue to seek recovery.
“Arbitration should not be the sole forum available to aggrieved investors. They should be able to seek relief in any forum and not be forced into an expensive arbitration that could foreclose the ability to obtain relief,” Abshure said.
– NASAA –
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Bob Webster | Director of Communications