CompuCredit Corp. v. Greenwood (2011)
- Docket
- 10-948
- Decided
- 2011-01-01
Summary
Question: Are claims arising under the Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq., subject to arbitration pursuant to a valid arbitration agreement? Conclusion: Yes. In an 8-1 decision, Justice Antonin Scalia held that the disclosure provision of the Credit Repair Organizations Act ("CROA") does not supply consumers with a right to bring an action in a court of law. Rather, it merely imposes an obligation on credit repair organizations to give consumers a specific statement of legal rights described in the statute; the only consumer right it creates is the right to receive this statement. Justice Scalia rejected Greenwood's contention that the CROA overrides the Federal Arbitration Act's ("FAA") requirement that courts enforce arbitration agreements. He cited cases where the Court held that a formulation of a cause of action did not establish a congressional command to override the FAA. Justice Scalia also argued that even if the CROA creates a nonwaivable right to judicial enforcement, this could include a judicial action involving initial adjudication through arbitration. He noted that arbitration agreements were commonplace when the CROA was enacted in 1996, and reasoned that congress would surely have been less obtuse if it intended to override all arbitration agreements with credit repair organizations. Justice Sonia Sotomayer concurred, joined by Justice Elena Kagan. Justice Sotomayer argued that Greenwood and CompuCredit's interpretations of the CROA were equally compelling given the lack of clear congressional intent. Hence, precedent requires that CompuCredit prevails, because the burden of showing congress disallowed arbitration lies with Greenwood. She also, however, rejected the majority's notion that congress must speak so explicitly to preclude arbitration of statutory claims. Justice Ruth Ginsburg dissented, rejecting the majority's formalistic interpretation of the CRO; here, congress' intended target was vulnerable consumers likely to read the words "right to sue" to mean the right to litigate in court. She distinguished the case from other decisions holding that a statutory right of action does not preclude arbitration agreements, noting that the CROA specifically refers to a "right to sue", mandates that consumers be informed of this right, and precludes the waiver of any "right" conferred by the act.