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You are here: Home / Arbitration / Court Decisions / Arbitration Process Issues / SUPREME COURT ENFORCES ARBITRATION OF CREDIT REPAIR ORGANIZATIONS ACT CLAIMS

SUPREME COURT ENFORCES ARBITRATION OF CREDIT REPAIR ORGANIZATIONS ACT CLAIMS

February 13, 2012 by Carlton Fields

The United States Supreme Court reversed a Ninth Circuit Court of Appeals decision that affirmed a “right to sue” under the Credit Repair Organizations Act (CROA). A putative class of cardholders brought CROA violation claims against CompuCredit, which issues Visa cards to individuals with poor credit scores seeking to repair their credit. The cardholder agreement contained an arbitration provision. When the cardholders brought suit in California federal court, CompuCredit moved to compel arbitration. The trial court denied the motion to compel, citing language in CROA requiring companies to provide a disclosure to consumers that includes the sentence, “You have a right to sue a credit repair organization that violates the [Act].” The Ninth Circuit affirmed. In an 8-1 decision authored by Justice Scalia (Justices Sotomayor and Kagan in a separate concurrence, Justice Ginsburg dissenting), the Supreme Court reversed, holding that the cited language did not unambiguously provide a right that supersedes the strong public policy embodied in the FAA of enforcing arbitration agreements. CompuCredit Corp. v. Greenwood, No. 10-948, 565 U.S. —-, 132 S.Ct. 665 (Jan. 10, 2012).

This post written by John Pitblado.

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Filed Under: Arbitration Process Issues, Week's Best Posts

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