Several merchants signed a binding arbitration agreement with American Express Co. The arbitration agreement included a clause prohibiting class action arbitration. Later, after a serious dispute arose involving a federal statute, the merchants wanted to pursue class action arbitration against American Express arguing that it would be too expensive to pursue the claims individually. Assuming the Federal Arbitration Act applies, how should a court rule on the issue?
A) The court should uphold the agreement prohibiting class action arbitration.
B) The court should strike the whole arbitration agreement because a claim under federal law is involved, and the parties should be required to go to court for any relief.
C) The court should uphold the arbitration agreement itself but strike the provision prohibiting class action arbitration.
D) The court should uphold the arbitration agreement itself and uphold the class action provision but limit any class action proceeding to no more than 20 plaintiffs.
E) The court should uphold the arbitration agreement itself and uphold the class action provision but limit any class action proceeding to no more than 10 plaintiffs.

Question

Quizplus · Accepted Answer

The Federal Arbitration Act supports the enforcement of arbitration agreements as they are written, including provisions that prohibit class action arbitration. The Supreme Court has upheld such agreements, emphasizing the importance of enforcing arbitration agreements according to their terms.

Several Merchants Signed a Binding Arbitration Agreement with American Express