Feb 8 (Reuters) - A federal judge refused to dismiss
an antitrust lawsuit accusing Citigroup Inc and Discover
Financial Services of conspiring to force credit card holders to
agree to mandatory arbitration clauses in their cardholder
agreements, and refusing to issue cards to people who did not
Citigroup and Discover are the final defendants facing
claims over arbitration clauses in the decade-old, nationwide
case overseen by U.S. District Judge William Pauley in
Bank of America Corp, Capital One Financial Corp and
JPMorgan Chase & Co are among other card issuers that have
Citigroup spokeswoman Emily Collins and Discover spokesman
Jon Drummond declined to comment.
Another part of the litigation accuses card issuers of
conspiring to fix foreign currency conversion fees.
Pauley said it was premature to dismiss the collusion claims
over arbitration clauses, citing among other factors "each
defendant's decision to adopt an arbitration clause that roughly
mirrored those used by its competitors."
He also noted the defendants' frequent attendance between
1999 and 2003 at meetings with rivals to discuss arbitration,
and said the "voluminous record" in the case "could suggest that
defendants used the meetings to concoct a conspiracy to adopt
arbitration clauses and boycott consumers who rejected them."
Pauley separately rejected the cardholders' request for a
ruling that Discover has failed to provide any pro-competitive
justification for its conduct.
In recent years, the U.S. Supreme Court has in a series of
rulings made it easier for companies to enforce mandatory
arbitration to resolve customer disputes.
But last week, Carlyle Group LP dropped its plan to require
shareholders to resolve claims through arbitration, after the
U.S. Securities and Exchange Commission said it would not
approve the private equity firm's initial public offering with
such a provision.
The case is In re: Currency Conversion Fee Antitrust
Litigation, U.S. District Court, Southern District of New York,
(Reporting By Jonathan Stempel)
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