A proposed class action against the credit card companies for allegedly conspiring with each other to limit the resolution of cardholder complaints was revived by the Second Circuit, which uses the opportunity to remind us about standing, a legal doctrine which can kill any good lawsuit.

The case is Ross v. Bank of America, decided on April 25. The plaintiffs claim that, in violation of the antitrust laws, the credit card companies illegally conspired with each other to force cardholders into accepting arbitration as the only dispute resolution method in the event a dispute arises regarding credit accounts.

The arbitration clauses also prohibit class actions. Companies generally like arbitration clauses because arbitration is a less expensive means to resolve disputes than lawsuits. Plaintiffs and their lawyers generally think that arbitrations favor the defendant and pre-arbitration discovery, if any exists, is not as far-reaching as pre-trial discovery.

The district court dismissed the Complaint for lack of standing because the plaintiffs were complaining about the arbitration clauses before any of them actually had disputes with the credit card companies. The Court of Appeals (Parker, Leval and Sotomayor) reversed.

The Second Circuit holds that the trial court misunderstood what the lawsuit was about.

Read More from the Second Circuit Civil Rights Blog

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