In an 8-1 vote, the U.S. Supreme Court concluded in CompuCredit Corp. v. Greenwood that an agreement providing for arbitration of claims under the Credit Repair Organizations Act (“CROA”), 15 U.S.C. § 1679 et seq., was enforceable. In so doing, the Court reversed the U.S. Court of Appeals for the Ninth Circuit, which had held that including “You have the right to sue” in the CROA’s mandatory pre-contract disclosures set out in section 1679c (a) evidenced a “clear ” right to bring CROA claims in court, and could not be waived under the CROA’s non-waiver provision in section 1679f (a).
Justice Scalia, writing for a six-justice majority, explained that section 1679c(a) merely sets out the disclosures but does not create any rights itself other than the right to receive the disclosure: “The only consumer right it creates is the right to receive the statement, which is meant to the describe the consumer protections that the law elsewhere provides.” Instead, the right to sue for alleged violations of the CROA is created by section 1679g, which provides “the mere formulation of the cause of action in this standard fashion.” Like similar provisions in the ADEA, RICO Act, and the Clayton Act, it therefore does not create a right to bring CROA claims in court (i.e., a judicial forum, as opposed to an arbitral forum). And, because section 1679g does not create a right to enforcement in a judicial forum, section 1679f (a)’s non-waiver provision does not apply. (A contrary reading, the Court notes, would also prohibit forum-selection clauses because section 1679g contains no limitation on the judicial tribunal that could hear the claim.)
Finally, the CROA was enacted in 1996, when arbitration clauses in consumer contracts were “no rarity” and after the Court had issued several “seminal decisions” on the FAA “establish[ing] a federal policy favoring arbitration.” But, notwithstanding that context (and in contrast to other statutes), neither section 1679g nor section 1679f (a) evidenced a clear and express Congressional intent to preclude arbitration of CROA claims.