In CompuCredit Corp. v. Greenwood, 10-948, the Court held that pre-dispute agreements to arbitrate claims under the Credit Repair Organizations Act (CROA) are valid and enforceable. Although the CROA requires that consumers be informed of their “right to sue,” the Court held that this is simply “a colloquial method of communicating to consumers that they have the legal right, enforceable in court, to recover damages from credit repair organizations that violate the CROA.” These provisions do not require that the action proceed in court, as opposed to in a arbitration. Furthermore, the statute’s use of terms such as “action” and “court” in its liability provision do not require a judicial forum either. The Court recognized that it was “utterly commonplace” for statutes to use such language. In light of these points, the CROA’s non-waiver provision does not preclude arbitration.
Perhaps most significantly, the Court’s opinion emphasizes that if Congress had meant to prohibit arbitration agreements, it would have spoken much more clearly. Citing several other federal statutes that expressly precluded predispute arbitration agreements, the Court found it “unlikely” that the use of “right to sue” and “action” signaled an intent to do the same in this context.
Linda Coberly is a partner in Winston & Strawn's litigation practice and serves as vice chair of the firm's appellate and critical motions practice group. She is also the author of DRI's Amicus brief filed in this case. Contact Linda at firstname.lastname@example.org.