COMPUCREDIT CORP. v. GREENWOOD
CompuCredit marketed a subprime credit card under the brand name Aspire Visa to consumers with low or weak credit scores through massive direct-mail solicitations and the Internet. CompuCredit marketed the card and the cards were issued by Columbus Bank and Trust. Wanda Greenwood and other consumers filed suit against Compucredit and Columbus alleging violations of California's Unfair Competition Law (UCL). The lawsuit claimed that the CompuCredit and Columbus' promotional materials were deceptive because they mentioned the credit card fees in small print, buried in other information and not in proximity to the representation that no deposit was required.
The United States District Court for the Northern District of California denied the credit providers' motion to compel arbitration. The United States Court of Appeals for the Ninth Circuit affirmed. The majority explained that a party must adhere to an agreement to arbitrate claims "unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue." Accordingly, the "burden is on the party opposing arbitration to show that Congress intended to preclude a waiver of judicial remedies."
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?
Legal provision: Credit Repair Organizations Act
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.
NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
COMPUCREDIT CORPORATION, et al., PETITIONERS v. WANDA GREENWOOD et al.
on writ of certiorari to the united states court of appeals for the ninth circuit
[January 10, 2012]
Justice Scalia delivered the opinion of the Court.
We consider whether the Credit Repair Organizations Act (CROA), 15 U. S. C. §1679 et seq., precludes enforcement of an arbitration agreement in a lawsuit alleging violations of that Act.I
Respondents are individuals who applied for and received an Aspire Visa credit card marketed by petitioner CompuCredit Corporation and issued by Columbus Bank and Trust, now a division of petitioner Synovus Bank. In their applications they agreed to be bound by a provision which read: “Any claim, dispute or controversy (whether in contract, tort, or otherwise) at any time arising from or relating to your Account, any transferred balances or this Agreement (collectively, ‘Claims’), upon the election of you or us, will be resolved by binding arbitration . . . .” App. 62.
In 2008, respondents filed a class-action complaint against CompuCredit and Columbus in the United States District Court for the Northern District of California, alleging, as relevant here, violations of the CROA. The claims largely involved the defendants’ allegedly misleading representation that the credit card could be used to rebuild poor credit and their assessment of multiple fees upon opening of the accounts, which greatly reduced the advertised credit limit.
The District Court denied the defendants’ motion to compel arbitration of the claims, concluding that “Congress intended claims under the CROA to be non-arbitrable.” 617 F. Supp. 2d 980, 988 (2009). A panel of the United States Court of Appeals for the Ninth Circuit affirmed, Judge Tashima dissenting. 615 F. 3d 1204 (2010). We granted certiorari, 563 U. S. ___ (2011).II
The background law governing the issue before us is the Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq., enacted in 1925 as a response to judicial hostility to arbitration. AT&T Mobility LLC v. Concepcion, 563 U. S. ___, ___ (2011) (slip op., at 4). As relevant here, the FAA provides:
“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U. S. C. §2.
This provision establishes “a liberal federal policy favoring arbitration agreements.” Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U. S. 1, 24 (1983) . See also, e.g., Concepcion, supra, at __ (slip op., at 4); Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 25 (1991) . It requires courts to enforce agreements to arbitrate according to their terms. See Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 221 (1985) . That is the case even when the claims at issue are federal statutory claims, unless the FAA’s mandate has been “overridden by a contrary congressional command.” Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 226 (1987) . See also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 628 (1985) . Respondents contend that the CROA contains such a command.
That statute regulates the practices of credit repair organizations, defined as certain entities that offer services for the purpose of “(i) improving any consumer’s credit record, credit history, or credit rating; or (ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i).” 1 15 U. S. C. §1679a(3). In its principal substantive provisions, the CROA prohibits certain practices, §1679b, establishes certain requirements for contracts with consumers, §1679d, and gives consumers a right to cancel, §1679e. Enforcement is achieved through the Act’s provision of a private cause of action for violation, §1679g, as well as through federal and state administrative enforcement, §1679h.III
Like the District Court and the Ninth Circuit, respondents focus on the CROA’s disclosure and nonwaiver provisions. The former, which is reproduced in full in the Appendix, infra, sets forth a statement that the credit re-pair organization must provide to the consumer before any contract is executed. §1679c(a). One sentence of that required statement reads, “ ‘You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.’ ” The Act’s nonwaiver provision states, “Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter— (1) shall be treated as void; and (2) may not be enforced by any Federal or State court or any other person.” §1679f(a).
The Ninth Circuit adopted the following line of reasoning, urged upon us by respondents here: The disclosure provision gives consumers the “right to sue,” which “clearly involves the right to bring an action in a court of law.” 615 F. 3d, at 1208. Because the nonwaiver provision prohibits the waiver of “any right of the consumer under this subchapter,” the arbitration agreement—which waived the right to bring an action in a court of law—cannot be enforced. Id., at 1214.
The flaw in this argument is its premise: that the disclosure provision provides consumers with a right to bring an action in a court of law. It does not. Rather, it imposes an obligation on credit repair organizations to supply consumers with a specific statement set forth (in quotation marks) in the statute. The only consumer right it creates is the right to receive the statement, which is meant to describe the consumer protections that the law elsewhere provides. The statement informs consumers, for instance, that they can dispute the accuracy of information in their credit file and that “ ‘[t]he credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information.’ ” 15 U. S. C. §1679c(a). That description is derived from §1681i(a), which sets out in great detail the procedures to be followed by a credit bureau in the event of challenges to the accuracy of its information. Similarly, the required statement informs consumers that they may “ ‘cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed it’ ”—the right created and set forth in more detail in §1679e. And the “right to sue” language describes the consumer’s right to enforce the credit repair organization’s “liab[ility]” for “fail[ure] to comply with any provision of this subchapter” provided for in §1679g(a). 2 Thus, con-trary to the dissent’s assertion, our interpretation does not “[r]educ[e] the required disclosure to insignificance,” post, at 6. The disclosure provision informs consumers of their right to enforce liability for any failure to conform to the statute—information they might otherwise not possess. It is the dissent’s interpretation that effectively reduces a portion of the CROA to a nullity. Interpreting the “right to sue” language in §1679c(a) to “create” a right to sue in court not only renders it strikingly out of place in a section that is otherwise devoted to giving the consumer notice of rights created elsewhere; it also renders the creation of the “right to sue” elsewhere superfluous.
Respondents suggest that the CROA’s civil-liability pro-vision, §1679g (set forth in full in the Appendix, infra), demonstrates that the Act provides consumers with a “right” to bring an action in court. They cite the provision’s repeated use of the terms “action,” “class action,” and “court”—terms that they say call to mind a judicial proceeding. These references cannot do the heavy lifting that respondents assign them. It is utterly commonplace for statutes that create civil causes of action to describe the details of those causes of action, including the relief available, in the context of a court suit. If the mere formulation of the cause of action in this standard fashion were sufficient to establish the “contrary congressional com mand” overriding the FAA, McMahon, supra, at 226, valid arbitration agreements covering federal causes of action would be rare indeed. But that is not the law. In Gilmer we enforced an arbitration agreement with respect to a cause of action created by the Age Discrimination in Employment Act of 1967 (ADEA) which read, in part: “Any person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter.” 29 U. S. C. §626(c)(1). In McMahon we enforced an arbitration agreement with respect to a cause of action created by a provision of the Racketeer Influenced and Corrupt Organizations Act (RICO) which read, in part: “Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit . . . .” 18 U. S. C. §1964(c). And in Mitsubishi Motors we enforced an arbitration agreement with respect to a cause of action created by a provision of the Clayton Act which read, in part: “[A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States . . . and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.” 15 U. S. C. §15(a). Thus, we have repeatedly recognized that contractually required arbitration of claims satisfies the statutory prescription of civil liability in court. See Gilmer, 500 U. S., at 28; McMahon, 482 U. S., at 240; Mitsubishi Motors, 473 U. S., at 637. To be sure, none of the statutes described above contained a nonwaiver provision, as the statute before us does. But if a cause-of-action provision mentioning judicial enforcement does not create a right to initial judicial enforcement, the waiver of initial judicial enforcement is not the waiver of a “right of the consumer,” §1679f(a). It takes a considerable stretch to regard the nonwaiver provision as a “congressional command” that the FAA shall not apply. 3
Moreover, if one believes that §1679g’s contemplation of court suit (combined with §1679f(a)) establishes a nonwaiv-able right to initial judicial enforcement, one must also believe that it establishes a nonwaivable right to initial judicial enforcement in any competent judicial tribunal, since it contains no limitation. We think it clear, however, that this mere “contemplation” of suit in any competent court does not guarantee suit in all competent courts, disabling the parties from adopting a reasonable forum-selection clause. And just as the contemplated availability of all judicial forums may be reduced to a single forum by contractual specification, so also can the contemplated availability of judicial action be limited to judicial action compelling or reviewing initial arbitral adjudication. The parties remain free to specify such matters, so long as the guarantee of §1679g—the guarantee of the legal power to impose liability—is preserved.
Respondents and the dissent maintain that if the CROA does not create a right to a judicial forum, then the disclosure provision effectively requires that credit repair organizations mislead consumers. We think not. The disclosure provision is meant to describe the law to consumers in a manner that is concise and comprehensible to the layman—which necessarily means that it will be imprecise. The required statement says, for example, that the CROA “ ‘prohibits deceptive practices by credit repair organiza tions,’ ” 15 U. S. C. §1679c(a). This is in some respects an overstatement, and in some respects an understatement, of the “Prohibited practices” set forth in §1679b. It would include, for example, deception apart from “the offer or sale of the services of the credit repair organization,” §1679b(a)(4). Yet we would not hold, in order to prevent the required statement from being “misleading,” that a consumer has a right to be protected from deceptive practices beyond those actually covered by §1679b. So also with respect to the statement’s description of a “right to sue.” This is 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. We think most consumers would understand it this way, without regard to whether the suit in court has to be preceded by an arbitration proceeding. Leaving that possibility out may be imprecise, but it is not misleading—and certainly not so misleading as to demand, in order to avoid that result, reading the statute to contain a guaranteed right it does not in fact contain.IV
At the time of the CROA’s enactment in 1996, arbitration clauses in contracts of the type at issue here were no rarity. Quite the contrary, the early 1990’s saw the increased use of arbitration clauses in consumer contracts generally, and in financial services contracts in particular. See Ware, Arbitration and Unconscionability After Doctor’s Associates, Inc. v. Casarotto, 31 Wake Forest L. Rev. 1001, 1001, and n. 3 (1996); J. Shimabukuro, Congressional Research Service Report for Congress, The Federal Arbitration Act: Background and Recent Developments 1 (2002).
Had Congress meant to prohibit these very common provisions in the CROA, it would have done so in a manner less obtuse than what respondents suggest. When it has restricted the use of arbitration in other contexts, it has done so with a clarity that far exceeds the claimed indications in the CROA. See, e.g., 7 U. S. C. §26(n)(2) (2006 ed., Supp. IV) (“No predispute arbitration agreement shall be valid or enforceable, if the agreement requires arbitration of a dispute arising under this section”); 15 U. S. C. §1226(a)(2) (2006 ed.) (“Notwithstanding any other provision of law, whenever a motor vehicle franchise contract provides for the use of arbitration to resolve a controversy arising out of or relating to such contract, arbitration may be used to settle such controversy only if after such controversy arises all parties to such controversy consent in writing to use arbitration to settle such controversy”); cf. 12 U. S. C. §5518(b) (2006 ed., Supp. IV) (granting authority to the newly created Consumer Financial Protection Bureau to regulate predispute arbitration agreements in contracts for consumer financial products or services). 4 That Congress would have sought to achieve the same result in the CROA through combination of the nonwaiver provision with the “right to sue” phrase in the disclosure provision, and the references to “action” and “court” in the description of damages recoverable, is unlikely.* * *
Because the CROA is silent on whether claims under the Act can proceed in an arbitrable forum, the FAA requires the arbitration agreement to be enforced according to its terms. The judgment of the Ninth Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.APPENDIX
Section 1679c provides:
“(a) Disclosure required
“Any credit repair organization shall provide any consumer with the following written statement before any contract or agreement between the consumer and the credit repair organization is executed:
“ ‘Consumer Credit File Rights Under State and Federal Law
“ ‘You have a right to dispute inaccurate information in your credit report by contacting the credit bureau directly. However, neither you nor any ‘credit repair’ company or credit repair organization has the right to have accurate, current, and verifiable information removed from your credit report. The credit bureau must remove accurate, negative information from your report only if it is over 7 years old. Bankruptcy information can be reported for 10 years.
“ ‘You have a right to obtain a copy of your credit report from a credit bureau. You may be charged a reasonable fee. There is no fee, however, if you have been turned down for credit, employment, insurance, or a rental dwelling because of information in your credit report within the preceding 60 days. The credit bureau must provide someone to help you interpret the information in your credit file. You are entitled to receive a free copy of your credit report if you are unemployed and intend to apply for employment in the next 60 days, if you are a recipient of public welfare assistance, or if you have reason to believe that there is inaccurate information in your credit report due to fraud.
“ ‘You have a right to sue a credit repair organization that violates the Credit Repair Organization Act. This law prohibits deceptive practices by credit repair organizations.
“ ‘You have the right to cancel your contract with any credit repair organization for any reason within 3 business days from the date you signed it.
“ ‘Credit bureaus are required to follow reasonable procedures to ensure that the information they report is accurate. However, mistakes may occur.
“ ‘You may, on your own, notify a credit bureau in writing that you dispute the accuracy of information in your credit file. The credit bureau must then reinvestigate and modify or remove inaccurate or incomplete information. The credit bureau may not charge any fee for this service. Any pertinent information and copies of all documents you have concerning an error should be given to the credit bureau.
“ ‘If the credit bureau’s reinvestigation does not resolve the dispute to your satisfaction, you may send a brief statement to the credit bureau, to be kept in your file, explaining why you think the record is inaccurate. The credit bureau must include a summary of your statement about disputed information with any report it issues about you.
“ ‘The Federal Trade Commission regulates credit bureaus and credit repair organizations. For more information contact:
“ ‘The Public Reference Branch
“ ‘Federal Trade Commission
“ ‘Washington, D. C. 20580’.
“(b) Separate statement requirement
“The written statement required under this section shall be provided as a document which is separate from any written contract or other agreement between the credit repair organization and the consumer or any other written material provided to the consumer.
“(c) Retention of compliance records
“(1) In general
“The credit repair organization shall maintain a copy of the statement signed by the consumer acknowledging receipt of the statement.
“(2) Maintenance for 2 years
“The copy of any consumer’s statement shall be maintained in the organization’s files for 2 years after the date on which the statement is signed by the consumer.”* * *
Section 1679g provides:
“(a) Liability established
“Any person who fails to comply with any provision of this subchapter with respect to any other person shall be liable to such person in an amount equal to the sum of the amounts determined under each of the following paragraphs:
“(1) Actual damages
“The greater of—
“(A) the amount of any actual damage sustained by such person as a result of such failure; or
“(B) any amount paid by the person to the credit repair organization.
“(2) Punitive damages
“(A) Individual actions
“In the case of any action by an individual, such additional amount as the court may allow.
“(B) Class actions
“In the case of a class action, the sum of—
“(i) the aggregate of the amount which the court may allow for each named plaintiff; and
“(ii) the aggregate of the amount which the court may allow for each other class member, without regard to any minimum individual recovery.
“(3) Attorneys’ fees
“In the case of any successful action to enforce any liability under paragraph (1) or (2), the costs of the action, together with reasonable attorneys’ fees.
“(b) Factors to be considered in awarding punitive damages
“In determining the amount of any liability of any credit repair organization under subsection (a)(2) of this section, the court shall consider, among other relevant factors—
“(1) the frequency and persistence of noncompliance by the credit repair organization;
“(2) the nature of the noncompliance;
“(3) the extent to which such noncompliance was intentional; and
“(4) in the case of any class action, the number of consumers adversely affected.”
1 The District Court said that petitioners do not dispute that they come within this definition. See 617 F. Supp. 980, 984, n. 2 (ND Cal. 2009). The Ninth Circuit did not address that issue, see 615 F. 3d 1204, 1207, n. 3 (2010), nor do we.
2 Accordingly, when a consumer sues to enforce liability under the CROA, he does so under §1679g(a), not “in light of §1679c,” post, at 4 (Ginsburg, J., dissenting). An action under the CROA need not referto §1679c at all, unless it is based on the company’s failure to provide the statement required under that section. Section 1679g(a) creates the “right” at issue and describes it in detail not contained in §1679c’s summary. When determining the scope of that right, it is therefore §1679g(a)—and not §1679c—that must govern.
3 Gilmer noted that the ADEA had been amended after conclusion of the arbitration agreement in that case to preclude waiver of “rights or claims that may arise after the date the waiver is executed.” 29 U. S. C. §626(f)(1)(C). The Court said in dictum that this provision “did not explicitly preclude arbitration or other nonjudicial resolution of claims,” 500 U. S., at 29.
4 The dissent questions the relevance of these statutes, since they postdated the CROA and since this Court’s intervening decisions compelling arbitration “increasingly alerted Congress to the utility of drafting antiwaiver prescriptions with meticulous care.” Post, at 8. But as the dissent implicitly recognizes, Congress had been “alerted” much before these post-CROA statutes were passed. The CROA itself followed a series of this Court’s seminal decisions compelling arbitration, decisions which held that the FAA had established a “federal policy favoring arbitration,” Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 26 (1991) , and that “[t]he burden is on the party opposing arbitration . . . to show that Congress intended to preclude a waiver of judicial remedies,” Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 227 (1987) . To the extent Congress is ever “stimulated” by this Court’s decisions, post, at 8, there is no reason to think the Congress that enacted the CROA was any less stimulated than subsequent Congresses.
SUPREME COURT OF THE UNITED STATES
COMPUCREDIT CORPORATION, et al., PETITIONERS v. WANDA GREENWOOD et al.
on writ of certiorari to the united states court of appeals for the ninth circuit
[January 10, 2012]
Justice Ginsburg, dissenting.
Congress enacted the Credit Repair Organizations Act (CROA) to protect consumers “who have experienced credit problems”—“particularly those of limited economic means”—against the unfair and deceptive practices of credit repair organizations. 15 U. S. C. §1679(a). Central to the legislation, Congress sought to arm consumers with information needed to make intelligent decisions about purchasing a repair organization’s services. To that end, Congress directed that, “before [execution of] any contract . . . between [a] consumer and [a] credit repair organization,” the organization must make certain disclosures. One of the required disclosures reads:
“You have a right to sue a credit repair organization that violates the [CROA]. This law prohibits deceptive practices by [such] organizations.” §1679c(a).
The Act’s civil-liability provision describes suits consumers may bring in court: individual and class actions for damages (actual and punitive) and attorneys’ fees. A further provision renders void any purported waiver of any protection or right the Act grants to consumers.
The Court today holds that credit repair organizations can escape suit by providing in their take-it-or-leave-it contracts that arbitration will serve as the parties’ sole dispute-resolution mechanism. The “right to sue,” the Court explains, merely connotes the vindication of legal rights, whether in court or before an arbitrator. That reading may be comprehensible to one trained to “think like a lawyer.” But Congress enacted the CROA with vulnerable consumers in mind—consumers likely to read the words “right to sue” to mean the right to litigate in court, not the obligation to submit disputes to binding arbitration.
In accord with the Ninth Circuit, I would hold that Congress, in an Act meant to curb deceptive practices, did not authorize credit repair organizations to make a false or misleading disclosure—telling consumers of a right they do not, in fact, possess. If the Act affords consumers a nonwaivable right to sue in court, as I believe it does, a credit repair organization cannot retract that right by making arbitration the consumer’s sole recourse.I
CompuCredit marketed a credit card to consumers with weak credit ratings. It did so through massive direct-mail and Internet solicitations, urging recipients to acquire a card under the brand name Aspire Visa, and thereby “rebuild poor credit” and “improve [their] credit rating.” App. 40, Complaint ¶11 (internal quotation marks omitted). Plaintiffs, individuals who applied for and received CompuCredit’s card, sought redress for multiple violations of the CROA.
Their complaint alleged that CompuCredit’s promotional materials told potential customers that no deposit would be required, and that cardholders would receive, upfront, a credit line of $300. In fact, plaintiffs asserted, they were charged an initial finance fee of $29, a monthly fee of $6.50, and an annual fee of $150, assessed immediately against the $300 limit. In the aggregate, plaintiffs calculated, fees charged the first year amounted to $257. CompuCredit’s fee exactions did appear in the promotional materials: in small print, buried amidst other information, and removed from the clearer representation that no deposit would be required. Id., at 40–41, Complaint ¶¶12–13. Far from improving their credit rating, plaintiffs complained, CompuCredit knew that its card, saddled with these fees, “would not provide any meaningful assistance whatsoever with regard to rebuilding credit and improving a credit rating.” Id., at 48, Complaint ¶41(b). Furthermore, plaintiffs stated, CompuCredit did not provide them with the written disclosures of their rights required by the CROA. Id., at 42, Complaint ¶23.
Seeking damages for the alleged violations, along with attorneys’ fees, plaintiffs requested class certification. In the District Court and Court of Appeals, they successfully resisted CompuCredit’s motion to compel arbitration pursuant to a form contract that barred class proceedings. 1 This Court, however, interprets the CROA to permit CompuCredit’s demand that plaintiffs proceed, if at all, before an arbitrator. 2 I read the governing statute differently.II
Three sections of the CROA, considered together, indicate Congress’ intention to preclude mandatory, creditor-imposed, arbitration of CROA claims. See 15 U. S. C. §§1679c(a), 1679g, and 1679f. Before entering into any consumer contract, credit repair organizations must give potential customers a written statement of rights they possess under that Act and related consumer-protection laws. §1679c(a). Congress dictated every word of the required notification. Credit repair organizations must tell consumers, in plain terms, how they may enforce their rights: “You have a right to sue a credit repair organization that violates the Credit Repair Organization Act.” Ibid.
The “right to sue” refers to the claim for relief Congress afforded consumers in §1679g. “Any person” who violates another’s rights under the CROA “shall be liable” for actual damages and attorneys’ fees, and may be liable for punitive damages as well. §1679g(a)(1)–(3). The Act sets out the factors “the court shall consider” in determining the amount of punitive damages “the court may allow” aggrieved consumers to recover, either individually or as a class. §1679g(a)(2) and (b). The liability created here, in §1679g, is precisely what the consumer, in light of §1679c, may sue to enforce.
The Act renders void and unenforceable “[a]ny waiver by any consumer of any protection provided by or any right of the consumer under this subchapter.” §1679f (emphasis added). 3 The rights listed in §1679c(a) rendered nonwaivable by §1679f are the “right to sue” and the “right to cancel [a] contract . . . for any reason within 3 business days from the date [the consumer] signed it.” 4
The question on which this case turns is what Congress meant when it created a nonwaivable “right to sue.” Recall that Congress’ target audience in the CROA is not composed of lawyers and judges accustomed to nuanced reading of statutory texts, but laypersons who receive a disclosure statement in the mail. Recall, as well, Congress’ findings that these individuals are often “of limited economic means and . . . inexperienced in credit matters.” §1679(a)(2). Attributing little importance to this context, the Court construes the right to sue as “the legal right, enforceable in court, to recover damages . . . without regard to whether the suit in court has to be preceded by an arbitration proceeding.” Ante, at 8. I read Congress’ words without that sophisticated gloss: The right to sue, I would hold, means the right to litigate in court.
The Court is quite right in recognizing that consumers “have the legal right, enforceable in court, to recover damages from credit repair organizations that violate the CROA.” Ibid. But the Court is quite wrong, as I see it, to characterize as merely “imprecise,” ibid., Congress’ failure to include the caveat that access to court may be conditioned upon an anterior arbitration. The “right to sue” may well be “a colloquial method of communicating to consumers.” See ibid. But it surely is not colloquially understood by recipients of the required disclosures as the right, not to adjudicate in court, but only to seek, or defend against, court enforcement of an award rendered by the arbitrator chosen by the credit repair organization. Few, if any, credit repair customers would equate the “right to sue,” §1679c(a), with the extremely limited judicial review given to an arbitrator’s award, see, e.g., Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576 –589 (2008).
The Court discounts the references to “action,” “class action,” and “court” in §1679g, the provision that “create[s]” the consumers’ claim for relief. See ante, at 5. Despite similar statutory language, the Court observes, we have enforced arbitration agreements to settle disputes arising under other Acts of Congress. The CROA, however, is distinguished by its disclosure requirements, prime among them, the obligation imposed on the credit repair organization to inform potential customers they “have a right to sue” an organization that violates the Act. §1679c(a). Yet the Court refuses to read this language in concert with §1679g, notwithstanding our frequent acknowledgment that “a statute is to be read as a whole, since the meaning of statutory language . . . depends on context.” King v. St. Vincent’s Hospital, 502 U. S. 215, 221 (1991) (citation omitted). As just explained, I believe Congress meant what an ordinary reader of the disclosure requirement would likely comprehend: A credit repair organization that engages in deceptive practices may be sued in court.
Reducing the required disclosure to insignificance, see ante, at 4–5, the Court’s construction of the CROA scarcely advances the Act’s goals. Congress aimed to ensure prospective customers “are provided with the information necessary to make an informed decision,” and also to “protect the public from unfair or deceptive advertising and business practices.” 15 U. S. C. §1679(b). The Court’s interpretation, however, enables the very deception Congress sought to suppress. Today’s decision permits credit repair organizations to deny consumers, through fine print in a contract, an important right whose disclosure is decreed in the U. S. Code.
This unfortunate result is not compelled by our precedents. The Court cites three decisions for the proposition, by now uncontroversial, that the mere existence of a statutory right of action does not preclude agreements to arbitrate disputes. See ante, at 5–6 (citing Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 28 (1991) ; Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 240 (1987) ; and Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 637 (1985) ). As the Court acknowledges, ante, at 6, none of the statutes at issue in those cases contained a nonwaiver clause analogous to §1679f. Yet the presence of such a clause would not have affected the outcome, the Court maintains; a nonwaiver provision would not have precluded arbitration because the statutes conferred no underlying right to proceed in court.
Precisely the point: The CROA differs from the statutes we have construed in the past in just that respect. The Act does not merely create a claim for relief. It designates that claim as an action entailing a “right to sue”; mandates that consumers be informed, prior to entering any contract, of that right; and precludes the waiver of any “right” conferred by the Act. Neither Gilmer, McMahon, nor Mitsubishi construed a statute of a similar order. 5III
The Court’s final point is that, elsewhere, Congress has spoken with particular clarity in guaranteeing a judicial forum and proscribing arbitration, but here, it did not do so. The two statutes the Court cites as exemplary postdate the CROA’s enactment by 14 and 6 years, respectively. (A third merely delegates regulatory authority over certain arbitration agreements.) See ante, at 9. Notably, these recent statutes were framed following a string of this Court’s decisions compelling arbitration pursuant to contractual stipulations. 6 Our decisions have increasingly alerted Congress to the utility of drafting antiwaiver prescriptions with meticulous care. But the Congress that drafted the CROA was not similarly stimulated, and we cannot fairly assess that enactment in the light of subsequent legislative responses to developments unknown to the CROA’s drafters. Cf. United States v. Price, 361 U. S. 304, 313 (1960) (“[T]he views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.”).
Beyond question, the Federal Arbitration Act, “standing alone,” favors the enforcement of arbitration agreements. McMahon, 482 U. S., at 226. To depart from that rule, however, Congress need not employ “magic words.” See Tr. of Oral Arg. 6. In determining whether the Arbitration Act’s general rule has been displaced by another statutory prescription, it remains our responsibility to examine carefully “the text of the [statute], its legislative history,” and Congress’ “underlying purposes.” Gilmer, 500 U. S., at 26 (citing McMahon, 482 U. S., at 227). See also 14 Penn Plaza LLC v. Pyett, 556 U. S. 247, 258 (2009) (arbitration agreements will be enforced “unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue” (quoting Gilmer, 500 U. S., at 26, in turn quoting Mitsubishi, 473 U. S., at 628)). No “unmistakably clear” statement is necessary to proscribe the arbitration clause CompuCredit seeks to enforce.* * *
The CROA mandates that potential customers shall be told of their “right to sue a credit repair organization” for damages arising from deceptive practices. 15 U. S. C. §1679c(a). But CompuCredit’s adhesion contract provided that consumers would “not have the right to go to court.” App. 61 (capitalization omitted). Congress’ direction must prevail over CompuCredit’s opposing declaration. Accordingly, I would affirm the judgment of the Court of Appeals for the Ninth Circuit.
1 The contract signed by cardholders did not itself require arbitration. Rather, it incorporated by reference an “enclosed insert” providing that all disputes would be resolved by arbitration at the discretion of CompuCredit or the cardholder. App. 61–63.
2 CompuCredit’s form contract specified that arbitration was to occur under the auspices of the National Arbitration Forum (NAF). In 2009, after the Attorney General of Minnesota filed an action alleging that NAF had engaged in numerous violations of consumer-protection laws, NAF entered into a consent decree barring it from handling consumer arbitrations. See Press Release by Lori Swanson, Attorney General of Minnesota (July 19, 2009).
3 Section 1679f(a), omitted from the Court’s statutory appendix, ante, at 11–14, provides in full: “Any waiver by any consumer of any protection provided by or any right of the consumer under this subchapter— “(1) shall be treated as void; and “(2) may not be enforced by any Federal or State court or any otherperson.”
4 Two provisions, although described by §1679c(a) as consumer “right[s],” are not rendered nonwaivable by §1679f because they are not “right[s] . . . under this subchapter.” Rather, the “right to dispute inaccurate information in your credit report” and the “right to obtain a copy of your credit report” referred to in §1679c(a) are rights conferred elsewhere in the U. S. Code. See §1681i(a), §1681j. Section 1679f also makes nonwaivable the “protection[s] provided . . . under this subchapter” (emphasis added); these protections include the prohibition of cer-tain business practices, see §1679b, and the provision, in writing, of certain contractual terms and conditions, see §1679d.
5 “[I]f one believes [the CROA] . . . establishes a nonwaivable right to initial judicial enforcement,” the Court states, “one must also believe that it establishes a nonwaivable right to initial judicial enforcement in any competent judicial tribunal.” Ante, at 7. In Sportin’ Life’s words, “it ain’t necessarily so.” While there is good reason to believe Congress cared about the institutional location of consumers’ suits under the CROA, there is no reason to think Congress sought to disturb the personal jurisdiction and venue rules that determine in which court a civil action may be brought.
6 See Brief for American Association for Justice as Amicus Curiae 12, and n. 5 (listing arbitration decisions since the CROA’s enactment).
SUPREME COURT OF THE UNITED STATES
COMPUCREDIT CORPORATION, et al., PETITIONERS v. WANDA GREENWOOD et al.
on writ of certiorari to the united states court of appeals for the ninth circuit
[January 10, 2012]
Justice Sotomayor, with whom Justice Kagan joins, concurring in the judgment.
Claims alleging the violation of a statute, such as the Credit Repair Organizations Act (Act), 15 U. S. C. §1679 et seq., are generally subject to valid arbitration agreements unless Congress evinces a contrary intent in the text, history, or purpose of the statute. See Gilmer v. Interstate/Johnson Lane Corp., 500 U. S. 20, 26 (1991) . I agree with the Court that Congress has not shown that intent here. But for the reasons stated by the dissent, I find this to be a much closer case than the majority opinion suggests.
The Act creates a cause of action in its liability provision, see §1679g(a), denominates the cause of action a “right to sue” in the mandatory disclosure statement, §1679c(a), and then provides that “right[s]” may not be waived, §1679f(a). Those for whom Congress wrote the Act—lay readers “of limited economic means and . . . inexperienced in credit matters,” §1679(a)(2)—reasonably may interpret the phrase “right to sue” as promising a right to sue in court. And it is plausible to think that Congress, aware of the impact of its words, intended such a construction of the liability provision.
But while this interpretation of the Act is plausible, it is in my view no more compelling than the contrary construction that petitioners urge. As the majority opinion notes, the disclosure provision does not itself confer a cause of action, and the liability provision that does is materially indistinguishable from other statutes that we have held not to preclude arbitration. In my mind this leaves the parties’ arguments in equipoise, and our precedents require that petitioners prevail in this circumstance. This is because respondents, as the opponents of arbitration, bear the burden of showing that Congress disallowed arbitration of their claims, and because we resolve doubts in favor of arbitration. See id., at 26. Of course, if we have misread Congress’ intent, then Congress can correct our error by amending the statute.
I add one more point. The majority opinion contrasts the liability provision of the Act with other, more recently enacted statutes that expressly disallow arbitration. I do not understand the majority opinion to hold that Congress must speak so explicitly in order to convey its intent to preclude arbitration of statutory claims. We have never said as much, and on numerous occasions have held that proof of Congress’ intent may also be discovered in the history or purpose of the statute in question. See ibid. (“If such an intention exists, it will be discoverable in the text of the [statute], its legislative history, or an ‘inherent conflict’ between arbitration and the [statute’s] underlying purposes”); Shearson/American Express Inc. v. McMahon, 482 U. S. 220, 227 (1987) (“If Congress did intend to limit or prohibit waiver of a judicial forum for a particular claim, such an intent ‘will be deducible from [the statute’s] text or legislative history,’ or from an inherent conflict between arbitration and the statute’s underlying pur-poses” (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614, 628 (1985) ; citation omitted)). I agree with the dissent that the statutes the majority opinion cites shed little light on the thoughts of the Congress that passed the Act. But the Act’s text is not dispositive, and respondents identify nothing in the legislative history or purpose of the Act that would tip the balance of the scale in favor of their interpretation.
ORAL ARGUMENT OF MICHAEL W. McCONNELL ON BEHALF OF THE PETITIONERS
Chief Justice John G. Roberts: We will hear argument next in case 10-948, CompuCredit Corporation v. Greenwood.
Mr. McConnell: Mr. Chief Justice, and may it please the Court:
This Court has consistently rejected the argument that Federal statutes that both create a right to sue and also bar waiver of rights under the statute are sufficiently explicit to override the strong Federal policy in favor of arbitrability expressed in the Federal Arbitration Act.
In two of those cases, Gilmer and Piette, the Court construed a statute the relative language of which is virtually indistinguishable from that and the credit repair organization fact that we have before us today.
Those cases involve the ADEA.
Both the ADEA and CROA, as I will call it, create a cause of action for aggrieved parties to bring actions for damages.
And both statutes explicitly bar waiver of quote "any right under the statute".
Justice Sonia Sotomayor: Well, that statute didn't have as this one has a disclosure requirement that says you have a right to sue.
Mr. McConnell: And that's the sole distinction between the two statutes.
Justice Sonia Sotomayor: Well, but it's a meaningful one.
Mr. McConnell: So the -- first of all the disclosure statute is a -- describes in layman's terms, gives a quick description of an operative civil liability section which is set out in 1679(g) and which tells us exactly what Congress had in mind in creating a cause of action.
And when you look at the language of the actual operative provisions in (g), it's almost as if Congress deliberately went out of its way to use language that would not preclude arbitration.
That language provides that a person who violates the statute shall be liable to the persons to whom--
Justice Elena Kagan: Suppose it said something different, Mr. McConnell.
Suppose the disclosure provision didn't exist at all but that instead of the liability provision you had a provision that simply said: any person injured by a violation of this act will have a right of action or will have a right to sue under this statute.
And then you had the waiver provision that you have in this statute.
Is that enough?
Mr. McConnell: --Justice Kagan, I think that would be exactly the same.
Because a cause of action and a right to sue are the same thing.
They mean the same thing and this Court has consistently since Mitsubishi held that just because Congress creates a cause of action which is a right to sue does not preclude arbitration.
Justice Ruth Bader Ginsburg: Mr. McConnell, you started with the notion that the disclosure provision, the statute is meant to apply to ordinary people and if an ordinary person not schooled in the law read
"you have a right to sue. "
wouldn't they understand that to mean: I have a right to sue in court?
Mr. McConnell: Well, Justice Ginsburg, in the ADEA context, the government itself, the EEOC sends discriminated against workers a right-to-sue letter that tells them they have a right to sue.
But this Court has twice said that does not preclude arbitration.
And that's because a right to sue is simply a cause of action.
It doesn't actually -- that doesn't mean that exclusively a right to be in court.
It gives you rights which may be vindicated, and there are various ways in which they can be vindicated.
And the Federal Arbitration Act provides that the -- that this Court or that the courts must enforce private contractual agreements that provide for the vindication, even of statutory rights through arbitration.
Justice Samuel Alito: Can you imagine any statutory language that would eliminate the right, the ability of the parties to enter into an arbitration agreement other than language that expressly prohibits the waiver of the right to sue in court in favor of arbitration?
Mr. McConnell: Yes, Justice Alito, I can imagine it.
Now Congress has to date has not used it.
Congress knows perfectly well how to bar arbitration.
They have done it in a number of statutes.
In fact, in the very Congress that enacted CROA, there were three different statutes that were proposed that would have eliminated arbitration for particular statutory schemes.
None of them were adopted.
But Congress is perfectly aware of how to do this.
I don't think they have to use the magic words "no arbitration", but they certainly have to do something considerably more direct than this.
Here they've created a statute that provides that there must be liability and creates a cause of action, and then they tell people in a separate disclosure provision -- by the way, added very late in the drafting process, right -- simply to tell people that they have what is colloquially known for laymen as a right to sue.
Now, we lawyers call things causes of action.
We call on things like the right to bring a civil action in a court of competent jurisdiction.
That is lawyers' language.
But when ordinary people talk about that, they think that's a right to sue.
But a cause of action and a right to sue are exactly the same thing.
Justice Elena Kagan: Mr. McConnell, the cases that you cite in support of your position rest on a distinction between procedural rights and substantive rights, which you invoke here.
But where does that distinction itself come from?
Because, it seems very atextual in nature, that distinction, which does appear in the cases.
But when Congress talks about rights, why should we think of rights as limited to substantive rights rather than also procedural rights?
Mr. McConnell: First of all, only our waiver argument depends upon those particular cases; we have a second argument.
But nonetheless, I think this comes from the very long tradition, at least back to the 1980s in Mitsubishi, of understanding that arbitration is a choice of a forum, but it must vindicate the substantive rights of the particular statute.
So this is the way courts have talked about the relationship between arbitration and the substantive statute.
So you look at the statute and you see what are the prohibitions, what are the substantive rights and so forth, and the arbitrators enforce all of those, but that the term rights does not include -- it does not mean that there is an exclusively judicial forum, just that whoever is the decisionmaker is going to enforce exactly the same set of substantive rights which are in the statute.
But Justice Kagan, even if that were not persuasive, Congress is perfectly aware that that's the way that this Court had been interpreting the words, because Gilmer, which interprets the very words 5 years, before enactment of this statute.
And we know Congress was aware of Gilmer, because the very same Congress that passed CROA also considered a bill considered a bill, considered and rejected, a bill that would have reversed the decision in Gilmer.
So Gilmer and the very question of -- of arbitration was before this Congress, and they knew that the word "any rights" was interpreted, interpreted by this Court, the way that it was in Gilmer, and they used precisely the language that was interpreted that way in Gilmer.
And so at this point there's a vocabulary.
It's like there is a glossary, Congress is using it, and even if it may not be, you know, fully textual, as you say, that's -- that's the way Congress now addresses the matter.
Justice Ruth Bader Ginsburg: But the -- the act in Gilmer did not designate court action or right to sue as a right within the non-waivable provision.
Mr. McConnell: That's true, Justice Ginsburg and the question is does it matter.
I would say anyone looking at the ADEA's language, which says that an aggrieved person may bring a civil action in court, anyone would say that that is a right to sue.
It is surely a right.
And indeed when this Court interpreted that statute in Piette, this Court called it a right -- a right to a judicial forum.
Three times in the opinion, the Court refers to that as a "right".
And the fact that our statute here refers to a right to sue, rather than a right to bring a civil action, seems -- certainly against the backdrop -- recall, please, that the question here is whether Congress has explicitly abrogated the -- specifically disavowed, specifically barred the use -- the arbitrability of the -- of the contract, and that all doubts are supposed to be resolved in favor of arbitrability, and the -- the statutes must be interpreted with a healthy regard for the policy in favor of arbitrability.
Considering this, and considering the paltry basis in the text for -- for that conclusion, I don't see how the Ninth Circuit's decision can be withstood -- could be upheld.
Chief Justice John G. Roberts: Do you think a -- the word "lawsuit" typically describes an arbitration proceeding?
If you're subject to an arbitration, would you say, I'm in a lawsuit?
Mr. McConnell: I do not think so.
Chief Justice John G. Roberts: Well, why doesn't a right to sue refer to a lawsuit?
Mr. McConnell: It refers to a cause of action, Your Honor, and we can call that a lawsuit, too.
Often that's another layman's term for a cause of action, but this Court has held I don't know how many times, I believe it's at least six times since -- since Mitsubishi, that just because Congress creates a cause of action and says that it will be in court, that does not mean that -- that that does not preclude arbitration, that that creates a cause of action.
And I think the -- the underlying logic of this is that the existence of a cause of action or of a right to sue, which I many suggest is a synonym for cause of action, is -- is not inconsistent with arbitration; it's the precondition for arbitration.
If there were not a cause of action, there would be nothing to arbitrate, right?
So in every case in which there is a legal arbitration, there is a cause of action.
It might arise from contract, it might arise from a statute, but in every single arbitration there is a cause of action.
If this Court were to interpret--
Justice Ruth Bader Ginsburg: You know, if this were written to be read by and understood by lawyers, I think you would have a stronger argument.
But this is meant for consumers, and they read
"You have a right to sue, and that right is not waivable. "
"A right to sue, they are not going to think about cause of action. "
"They don't know what cause of action is. "
"But they do know that a right to sue is a right to bring a lawsuit. "
Mr. McConnell: --Justice Ginsburg, again, if that is so, it would apply to other cases in which the language "right to sue" is used.
For example, the EEOC's right to sue letters, what could be more explicit than that?
But this Court has held several times that just because the EEOC sends a right to sue letter doesn't mean that Congress--
Justice Ruth Bader Ginsburg: Is that in -- is that in the statute?
Or is it just a colloquial--
Mr. McConnell: --It's in the regulations, Your Honor.
Justice Ruth Bader Ginsburg: --Yes, but Title VII doesn't say "right to sue".
It's a name that the agency uses, but it's not -- it's not in the statute.
The statute doesn't say you have a right to sue.
Mr. McConnell: Well, what the statute says is you may bring a suit in court.
And so, if this Court -- I do not see how the Court can say that the right -- that the language "the right to sue" is different from a right of action.
It certainly -- it is the same thing.
Chief Justice John G. Roberts: One way you could do it is that the right to sue is more familiar colloquially.
If somebody, you know, hits your car and you jump out angrily and you say -- you can say: I'm going to sue you.
You are not likely to say: I'm going to bring a cause of action against you.
Mr. McConnell: We have -- there is no reason to think that when Congress appended a disclosure provision toward the end of the drafting of this statute and simply used a colloquial version of cause of action so that ordinary people would understand that they intended to change the meaning of the operative provision.
The operative provision tells us, I think very clearly, what Congress meant, and then in this sort of quick shorthand, colloquial way, they are telling people, yes, they have an action, but just like they have an action -- persons have an action under the Sherman Act, they have an action under RICO, they have an action under the ADEA and they have an action under the Truth in Lending Act.
In all of these cases people have a right to sue, but this Court has held that arbitration vindicates the cause of action.
Justice Anthony Kennedy: In the standard arbitration agreement, if Smith and Jones agree to arbitrate and Jones then brings suit in court, and that action is then stayed pending arbitration, has there been a breach of the arbitration agreement simply by bringing the suit?
Mr. McConnell: I don't--
Justice Anthony Kennedy: I mean, doesn't that happen rather often?
Mr. McConnell: --It does happen rather often.
I'm not sure what the -- I would say no.
What I would say is that the -- is that the question of arbitrability has been put before the court and the court will decide whether to enforce the arbitration clause or not.
Justice Anthony Kennedy: And of course the suits are brought after arbitration to enforce the arbitration award.
Mr. McConnell: Exactly, Exactly.
So in this sense, it's not that the cause of action goes away.
It's not the -- the cause of action is not being waived.
It's simply being vindicated in a different way, in a way which Congress in the Arbitration Act has told us is perfectly appropriate, just as appropriate as a -- as a vindication in Court, and that we should leave it to -- and that the -- a contract between the parties to decide which of the forums for vindication of their rights would be used should be enforced.
Justice Ruth Bader Ginsburg: But this is not what the parties decide.
These are take it or leave it contracts.
So the consumer doesn't really elect arbitration.
It's just presented as part of the terms that the consumer can take or leave and not negotiated.
Mr. McConnell: That is an argument against arbitration that this Court has rejected several times.
Justice Ruth Bader Ginsburg: It's a question of whether we take that into account in -- in determining what
"You have a right to sue. "
Mr. McConnell: Well, Justice Ginsburg, Congress -- that's a policy question and Congress has given us an answer.
Recently, by the way, Congress has indicated a slightly different answer which will affect cases like this in the future.
As part of the Dodd-Frank regulatory reform bill, Congress required the new Consumer Financial Protection Bureau to conduct a serious study of the use of arbitration procedures in consumer financial matters to find out whether things like what you refer to, Justice Ginsburg -- the -- the types of contracts and so forth are fair to consumers.
So we'll get an authoritative answer to this, and Congress then vested this new bureau with authority either to outlaw arbitration awards or to require conditions or to reform them.
But in the meantime, the policy that Congress has set is the policy in the Federal Arbitration Act, which is one of a -- a strong policy in favor of enforcing arbitration contracts.
Justice Elena Kagan: Except if Congress indicates otherwise and--
Mr. McConnell: Unless Congress has indicated otherwise.
Justice Elena Kagan: --And I guess the problem here is that there is this language in this disclosure provision which is meant, you know, truly to inform consumers about -- about their rights and about where they are going to end up resolving their disputes, and it says you have a right to sue, and you are asking us essentially to read that language as: You have a right to bring a claim in court, but it's probably going to end up in arbitration because of the nature of your form contract.
And that seems a very different kind of statement to consumers.
Mr. McConnell: Justice Kagan, I do not see how it would be any different from a consumer who reads any of the statutes that this Court has held are subject to arbitration.
If, for example, in the Truth in Lending Act, which this Court interpreted in the Green Tree case that as part of the arbitration contract it was required to send the consumer a copy of the statute.
The consumer would read in the statute that there is a cause of action, that they can bring suit in court to enforce their rights under the Truth in Lending Act.
They would read that statute and they would draw exactly the same conclusion that they do from the shorthand layman's language of "a right to sue".
But again, even if that were so, I think as a matter of -- of how -- statutory interpretation, that a disclosure provision cannot change the meaning of the operative section.
The operative section which creates the rights and liabilities here is 1679g, and not even Respondents seriously claim that that section is -- shows congressional intent to prevent arbitrability.
And that seems -- the fact that there is a disclosure provision that uses more informal language instead of the lawyers' language used in 1679g does not change the meaning of the statute.
Unless there are further questions, I will reserve the remaining part of my time for rebuttal.
Chief Justice John G. Roberts: Thank you, counsel.
ORAL ARGUMENT OF SCOTT L. NELSON ON BEHALF OF THE RESPONDENTS
Mr. Nelson: Mr. Chief Justice, and may it please the Court:
The Credit Repair Organizations Act provides consumers with what it explicitly denominates a right to sue, and then it says that any right of the consumer under the statute is non-waivable.
As this Court has said--
Justice Sonia Sotomayor: Does that mean that there is a violation of the statute the minute one of these organizations asks someone to sign an arbitration clause?
A $1,000 penalty for the mere asking?
Mr. Nelson: --There is -- there is a technical violation in asking, because in 1679f not only are waivers made unenforceable, but it is -- it is prohibited to ask someone to waive their rights.
However, that does not mean that you actually have a cause of action to go in and sue somebody for that, because, remember, under 1679g, what you can sue for is your money back.
If somebody's asked you for a waiver and you didn't sign the contract and you didn't pay them any money -- or your damages; somebody asked you for a waiver and you never signed up with them, you don't have any damages; and then punitive damages in addition, which -- you know, the general rule about punitive damages is you get them on top of actual damages if you have actual damages.
So, yes, it's a technical violation.
If a company engaged in a pattern or practice of it, the FTC could quite rightly go in and get an injunction against that.
But it's not a case where there would be some onerous penalty imposed on a company merely for asking for a waiver.
Justice Sonia Sotomayor: Well, doesn't that reading, however, make suspect your claim that Congress would have intended -- without any discussion in the legislative history -- and our case law has said you have to read the intent to bar arbitration both from the language of the statute, its context, and its history.
I just don't see any history here that supports your reading.
Mr. Nelson: Well, Justice Sotomayor, I want to take that in two parts, because the first was -- was tied to the -- the attempt to procure a waiver and whether that calls into question whether Congress really could have meant this.
It's sort of an unusual provision to say not only can you not waive rights, but it's a violation even to ask somebody to waive them.
But that's no more unusual with respect to the right to sue than with respect to any other right under this statute.
For example, the right to cancel after 3 days.
Everybody would concede, I think, that that's a non-waivable right under the clear language of this statute.
It's an unusual and perhaps onerous provision to say that if somebody just suggested that you waive that right to cancel and you never actually waived it, they still violated the statute.
But you know, that's what Congress wrote here, because in this statute, it was concerned with an industry that it saw as overreaching pervasively in relation to the people that it was -- it was trying to sign up for its services.
And that's why Congress wanted a very strong prohibition of waiver of rights that even attempted -- that even extended to attempt.
Now, as to the--
Justice Elena Kagan: Well, Mr. Nelson, but your friend Mr. McConnell says quite rightly that the rules in this area have been fairly clear, that Congress knew it had to make especially clear that it wanted to void arbitration agreements.
So if that's the case, why didn't Congress do what it has the done in a thousand other statutes -- or maybe that's an overstatement, but a number of other statutes -- which is to say so?
Mr. Nelson: --First of all, the rules -- the rules are not that Congress has to be especially clear in this context.
And in fact, the Court has said over and over in the line of cases starting with Mitsubishi, McMahon, Rodriguez de Quijas and Gilmer that what has to be discernible -- and this also gets back to Justice Sotomayor's question -- it merely has to be discernible from the text or the legislative history or the structure and policies of the Act that -- that there's an intent to preclude waiver of the right to judicial remedies.
That's not an unmistakable plain statement of rule; it's not a requirement of explicitness in the sense of explicitly using the term "arbitration".
As even my friend stated, there is no requirement of magic words.
What this Court said, what it told Congress in the years leading up to this statute is, you have to express a discernible intent to preclude waiver of the right to judicial remedies.
Justice Antonin Scalia: Right.
And -- and you don't need a magic word, but it seems to me you need something more than a provision dealing with what you have to tell to the people who -- who accept these contracts.
I mean it's not in the substantive part of the statute.
It's in the part of the statute that tells you what provisions of the -- of the act you have to notify the consumer of.
It's a very strange way for Congress to say, "no arbitration".
By putting this language in a section that has nothing to do with the rights under the act.
It is intended to be a summary of the rights under the act.
Mr. Nelson: Justice Scalia, I think it's not a strange way at all but a very direct way in the context here.
Remember in Gilmer, what the Court was dealing with was a statute that as amended in an amendment that actually wasn't before the Court in Gilmer said you can't waive any right under the statute.
But that then raises the question, well, what do we mean by rights under this statute.
And the Court concluded there and reinforced in Piette that it interpreted that to mean substantive rights.
In the absence of a textual indication, that when Congress used the words "rights" in this statute it was intending to protect the procedural right to go to court.
Here we have something very different.
Congress creates a cause of action which, as my friend says, colloquially someone could call that a right if they wanted to.
But the cause of action says you can obtain this liability, the Court will determine that you obtain it through an action.
That certainly gives you an entitlement to go to court.
But Congress then goes further and it denominates that one of the rights under this statute, one of only two rights under this statute that are so-called.
Justice Antonin Scalia: Do you think Gilmer would have come out differently with regard to one of the procedural rights involved in that case if the statute had happened to refer to procedural right as a right?
Procedural rights are rights, aren't they?
Mr. Nelson: Yes, they are definitely rights, and--
Justice Antonin Scalia: And so if the statute in Gilmer had referred to one of the procedural rights in passing as a right, do you think that one would have been nonwaivable?
Mr. Nelson: --I think that if Congress had expressly denominated something in that statute as a right--
Justice Antonin Scalia: But procedural rights are rights.
To denominate it as a right is--
Mr. Nelson: --Well, but the question is does any right refer to both procedural and substantive rights.
Justice Antonin Scalia: --Exactly.
Mr. Nelson: Which is what this Court held did not in Payette.
When Congress -- you know, it does matter what words Congress uses and "rights" is a word that can have a lot of meanings.
This is a statute--
Justice Antonin Scalia: But you're saying -- in answer to my question you're saying that just because the statute refers to procedural rights as rights, just as we do.
All of a sudden, simply because the statute uses our normal language, procedural rights are elevated to the level of substantive rights and can't be waived.
That can't be right.
Mr. Nelson: --I think if Congress makes clear in the statute that what it means when it's talking about rights includes procedural rights and then it has a provision that says: any right under this statute is not subject to waiver, that creates a very strong inference that Congress meant what it said.
But in fact--
Justice Antonin Scalia: You are effectively referring to a procedural right as a right creates any inference at all.
It is a right.
Mr. Nelson: --It is a right, and when Congress has said -- I mean many of these statutes such as Title VII and FELA don't say that rights are nonwaiverable.
This statute is a unique statute in its phrasing.
It has a nonwaiver provision applicable to any right, and it has a list of rights.
That's pretty unusual.
Justice Ruth Bader Ginsburg: What else is nonwaivable besides the three days to back out?
Mr. Nelson: Well the other thing that this statute makes nonwaivable besides rights is protections, which is a phrase that hasn't been tied to anything defined in the statute.
But I think that, for example, all of the prohibited practices listed in section 1679(b) which are at pages 4A to 5A of the red brief, those would be nonwaivable.
You couldn't waive your right not to have the credit repair organization make false statements to you.
You couldn't waive your right under 1679 b (B) not to have to make a payment in advance to a credit organization.
You can't waive the right to the disclosures provided for in 1679(c) or the protection provided by those disclosures.
And 1679(d) requires written contracts and specifies those terms.
Those would all be subject to the provision in the statute that says you can't waive any protection or any right provided by the statute.
Justice Elena Kagan: Do you know, Mr. Nelson, whether this statute is unique in this sense: Do you know of any other statute that arguably voids arbitration agreements without saying that they are voiding -- that it's voiding an arbitration agreement?
Mr. Nelson: No.
There's a -- sort of a pending disagreement, perhaps, over whether the Magnus and Moss Warranty Act does have some very specific language in that statute about informal dispute resolution mechanisms and the manner in which that has been interpreted in agency regulations.
So this is really the only statute that I'm aware of that uses this formulation.
But you remind me of your earlier question which I never got to finish answering about the thousands of other statutes that say specifically that you can't enforce arbitration agreements.
In fact there are very few such statutes.
There were none at the time this statute was enacted.
The first one appeared six years later.
The only time that there has been any number of them is in the 2010 Dodd-Frank Act which came after what I would say is a lengthy period of considerable attention that had been paid by advocates before Congress to the issue of arbitration that I think led to the desire to use as sort of a belt and suspenders approach in those statutes.
But what we have here in 1996 that had never before been a statute that prohibited the enforcement specifically of an arbitration agreement in those terms.
And as Mr. McConnell said, there were some proposals, unenacted proposals that had been floated at that time.
But I think the one thing that is clear is that we don't learn how Congress does things by looking at things that it didn't do.
And that's all those unenacted proposals were.
Justice Ruth Bader Ginsburg: Would your position of right to a lawsuit, would that extend to a post-dispute genuinely bargained for right to arbitrate?
Mr. Nelson: No, I think not, Justice Ginsburg, and for this reason: The Court has always differentiated between post dispute settlements of claims and pre-dispute waivers, and has not considered agreements to settle, absent very special either statutory language such as in the ADEA which does apply a waiver provision to some types of settlements, and in the Fair Labor Standards Act where there's a very specific policy reason for prohibiting certain kinds of settlements.
But generally the Court has not considered the settlement of a case to be a waiver of the right to bring a case.
And that primarily came in the FELA cases that we cited in our briefs.
But I think it was significant that in Wilko v. Swan, where the Court said we are going to interpret the securities act not to allow waivers of the right to sue, the Court said of course this wouldn't apply to something that came post dispute.
And in McMahon v. Rodriguez de Quijas, what the Court disagreed with WILKO v. Swan about was whether the right to sue under that particular statute was nonwaivable.
But it favorably commented on the notion that of course, even if it were, it wouldn't bar a post dispute agreement to arbitrate a claim as a way of settling an actually pending dispute.
And that's why I think that when Congress enacted this statute, it would have been acting against that backdrop and would not have -- no one would have thought that a settlement agreement is a waiver of a right to sue.
A settlement agreement is a resolution of the right to sue.
Justice Ruth Bader Ginsburg: Another argument that is made, and perhaps to your position, is that the statute says that any waiver of any protection or right may not be enforced by any court or any other person.
And the suggestion is "any other person" must contemplate an alternate dispute method that doesn't involve court, court or any other person.
Mr. Nelson: Well I don't think that it necessarily contemplates an alternative dispute mechanism, because I think, for example, that would bar -- when someone goes to court to compel arbitration, they are enforcing an arbitration agreement by bringing an enforcement action.
So that would bar them from doing that.
So "any other person" doesn't necessarily mean arbitrators.
But even to the extent that it comprehends arbitrators and maybe even one might have thought was principally applicable to them, you've got to realize that this statute, what it prohibits is only the waiver of the consumer's ability to arbitrate her CROA claim.
It doesn't bar a credit repair organization from requiring a consumer to arbitrate the credit repair organization's breach of contract action.
And in fact, most -- well over 99 percent of the consumer arbitrations that were handled by the arbitration forum that was designated in this contract were collection actions brought by a company that says this consumer owes me some money.
So that's kind of the norm.
That's the general run of arbitration cases.
And if a credit repair organization were to initiate an arbitration against a consumer, that wouldn't violate the nonwaiver provision; but if the consumer then defended and said, wait a second, this contract is void because I never got the right to cancel, the provision would quite clearly prevent the arbitrator in that circumstance from saying, you waived the right to cancel.
Chief Justice John G. Roberts: What about the argument that the consumer retains the right to sue since they can go into court with their complaint, but it's simply the rule that the court will apply is that you have to proceed to arbitration?
Mr. Nelson: Well, I think it's -- it would be a remarkably crabbed notion of having a right to sue that meant you could file a complaint that was mandatorily subject to decision elsewhere.
And second, and this goes to Justice--
Chief Justice John G. Roberts: But that's frequently -- that's frequently the way these issues come up.
I mean, people--
Mr. Nelson: --Certainly.
Chief Justice John G. Roberts: --You cannot be forced to arbitrate either under the agreement or any other provision, they will bring their complaint in court, and then there will be a judicial resolution of whether or not the proceeding should go to arbitration.
Mr. Nelson: But -- but all that has been resolved in that -- in that suit is not the plaintiff's claim under CROA, which is what he has a right to sue on, all that's resolved is the issue of whether he has a contractual obligation to arbitrate which he has breached by going into court.
And -- and this goes to Justice Kennedy's question.
Under the FAA, you can compel arbitration when someone has filed a complaint that is in breach of an agreement to arbitrate.
So they -- they don't actually have a right to sue.
You can't stop them from going and filing a complaint, but once they do, you come in and say, no, you have no right to -- to proceed on the merits with this claim in court.
And in fact that's -- that's exactly what the arbitration--
Justice Anthony Kennedy: Can you -- can you get -- can you get damages in the arbitration for the cost of attorney's fees to go to the court to say that you had to go to the arbitration?
Mr. Nelson: --No, I don't think you would generally have that entitlement under any -- any rule of law that is -- that is normally applicable in American courts.
However, if your -- if your arbitration agreement provided for that, I'm afraid I can't point to any decision that would make it unenforceable, much as I would regret that result.
So, you know, I think in a -- in a real sense the consumer has no right to -- right to sue merely because they can run into court and -- and then be compelled to arbitrate.
And that's exactly why this Court in every one of its decisions enforcing arbitration agreements, or not, has referred to the arbitration agreement as a waiver of the right to proceed judicially.
It's used that phrase over and over again in McMahon, Rodriguez de Quijas, Mitsubishi, and -- and Gilmer itself.
The -- the common recognition of all those cases is that the arbitration agreement is a waiver of the person's right to proceed in court.
Chief Justice John G. Roberts: You agree, I take it, that you would lose if the statute said
"you have a cause of action? "
Mr. Nelson: Yes.
I -- you know, a cause of action I don't think would -- would do it for us.
In fact, that's exactly what the ADEA says, the section that creates a judicial remedy is headed "Cause of Action".
And so, you know, the question again is "right" is a word that -- that can be used in many senses.
It's -- it's a word sort of like jurisdiction, it gets thrown around loosely.
But when Congress says a right is non-waivable, it's referring to something specific, and the question is what is it referring to in a statute that uses the term "right" and uses it to describe the -- the ability to go to court.
And -- and again, that right to sue language is important in two ways, because it not only specifies that the 1679(g) remedies are a right for purpose of this statute, but it says something about the nature of the right.
It's a right to sue.
It's not just a right to get those damages, to get your money back.
And sue, as -- as I -- I think my friend agrees--
Justice Antonin Scalia: Well -- well I guess it goes farther than that, your argument does, it seems to me.
Your argument is the waiver, the non-waiver of rights provision would normally be read to mean non-waiver of substantive rights, but the notice given to the consumer here which refers to the procedural right to sue as a "right" eliminates that presumption.
So I presume, therefore, that your position is that all procedural rights under this statute cannot be waived.
Because, I mean, that's what we are talking about, what does right mean--
Mr. Nelson: --Justice Scalia--
Justice Antonin Scalia: --when it says rights are not waived?
And our prior case law says ordinarily that means only substantive rights; but here in this statute, it refers to the right to sue which is certainly is a procedural right as a right.
So I presume all the other procedural rights in this statute likewise cannot be waived.
Mr. Nelson: --Well, I -- I'm not really sure there are other procedural rights in the statute.
Justice Antonin Scalia: Oh, there are -- none.
Mr. Nelson: I mean, unless -- the right to cancel within 3 days I suppose could be called a procedure in one sense, although it's -- it's -- I think it -- it probably would -- would generally be categorized as a substantive right.
But as far as procedural rights of the consumer, they are set forth in 1679(g) and they are the right to bring an action either on an individual or class basis for the damages and attorney fees specified in that section.
And that's what I think is being referred to as the right to sue.
Now if there were something else in the statute that one might arguably call a right and arguably call procedural -- I mean, it's hypothetical because I don't think it's there -- but I -- I would not jump to the conclusion that it was a right if it was not comprehended by "right to sue".
Because I think what that statement "right to sue" makes non-waivable is the right to sue.
It's not just any procedural thing in this statute that one might loosely call a right.
Justice Anthony Kennedy: Suppose the case were reversed.
The liability section says you have a right to sue, and the disclosure section says you have a right to sue and go to arbitration.
What result then?
Mr. Nelson: Well--
Justice Anthony Kennedy: It seems to me that under your -- well, I will let you answer.
Mr. Nelson: --Well, Justice Kennedy, let -- let me divide it up.
If the liability section said you had a right to sue and there were no disclosure -- disclosure section at all, I would say that's -- that's plenty good enough.
If -- if the disclosure section says, you have a right to sue or to go to arbitration, I think you would have to then say sensibly what is Congress talking about when it's -- when it's referring to this, and you would have to read them together.
And I would have a hard time standing up here and saying that a statute that told people "right to sue or arbitrate" meant right to sue only and foreclosed arbitration.
And -- and, you know, I think -- I think that really would be a very different matter.
Justice Elena Kagan: Mr. Nelson, you just said if the liability section said you have a right to sue that's okay, but if it says you have a cause of action that's not okay.
But the right to sue is really just a colloquial way of expressing the first, so why should we draw the line between those two things?
Mr. Nelson: Well, when you say "colloquial", I'm not -- I don't want to take offense with you, but I think that that's selling it a bit short.
This -- this is a statute where Congress prescribed a notice, prescribed it in statutory terms, did it so people would have an understanding of what their rights were, and did it in a way that no reasonable consumer would understand meant oh, this non-waiverable right is not really to sue in the way that I would ordinarily understand the word, and even that way that courts use it, but actually to -- to do something else.
So I -- I don't think it's colloquial in -- in a disparaging sense.
What it is, is something that is designed to convey a clear meaning, and the clear meaning that it conveys is that you have a right to go to court.
Now, of course, even a disclosure that you have a right to go to court wouldn't be enough to get you over the hump if you didn't also have a provision that made that right non-waiverable.
But again, here, what you have is both.
And -- and in doing that, in writing that statute, Congress was doing exactly what the Court had told it, it didn't do in Gilmer, it didn't do in McMahon, it didn't do in Mitsubishi.
It created a right to a judicial remedy that is not subject to waiver.
Unless the Court has any further questions, I will--
Chief Justice John G. Roberts: Thank you, counsel.
Mr. McConnell, you have ten minutes remaining.
REBUTTAL ARGUMENT OF MICHAEL W. McCONNELL ON BEHALF OF THE PETITIONERS
Justice Sonia Sotomayor: Actually, Mr. McConnell, can we go to the issue of class action?
If we buy your argument that procedural and substantive rights are different, is it your position that you could seek a waiver of the class action even though this statute expressly contemplates class actions?
Mr. McConnell: Actually, Justice Sotomayor, I think this statute specifically does not require -- it contemplates but does not require our -- class actions.
If you look at -- at 1679b(a)(2)(B), which is the class action provision that is on page 59(a) of the appendix to the -- to the petition, all that it says is that in the case of a class action, here is how we would -- here's how the damages, the punitive damages, would be calculated.
It does not say that there must be class actions.
It doesn't make that a non-waiverable right at all.
Justice Sonia Sotomayor: So your answer to me is that is waiverable.
That is not a right contemplated by the right to sue.
Mr. McConnell: Actually, my answer to you is that it's not a right to begin with--
Justice Sonia Sotomayor: You have to meet--
Mr. McConnell: --Whether waiverable or not.
Justice Sonia Sotomayor: --But -- you have to meet the prerequisites of a class action before you are entitled to seek one.
But your position is that's not a protected right?
Mr. McConnell: May I -- if we were to hypothesize that the statute did provide that there shall be class provisions, which this does not -- I think this statute is agnostic on that, but the hypothetical statute were class actions are contemplated, I would not argue that that is necessarily waiverable.
What I would argue is -- is that that could be vindicated through arbitration, that there can be, as this Court discussed just last term in Concepcion, there can be class arbitration proceedings--
Justice Ruth Bader Ginsburg: But you -- but this arbitration agreement precludes class action, doesn't it?
Mr. McConnell: --Yes, it does.
And again, this statute does not require that there be class proceedings, I am only addressing a hypothetical statute that did.
Justice Sonia Sotomayor: Unless -- unless we read the disclosure requirement of a right to sue to mean that you are entitled to bring your action in court, with whatever protections, procedural and substantive protections that entails.
Mr. McConnell: Yes, and that seems to me just a further reason not to interpret a disclosure provision with a layman's language as importing, you know, very specific legal notions.
I think this simply means -- right to sue simply means cause of action.
And it's -- each of the rights I should point out in the disclosure provision is -- has its actual textual home elsewhere.
None of them are created in the disclosure provision.
Each of them is created elsewhere, either in this statute or another.
To find out exactly what they entail, you look to the substantive provisions.
Here, you would look to 1679g, and you would see that class actions are possible, but not required under this particular statute.
Chief Justice John G. Roberts: Could you in an agreement waive the provisions of 1679g(b) that specify what a court shall consider in awarding punitive damages?
Mr. McConnell: I don't think so, Mr. Chief Justice.
Most lower courts create the right to punitive damages as a substantive right which would not be waiverable.
Chief Justice John G. Roberts: Now, what -- what if you don't want your arbitrator to consider those four requirements?
Could you waive particular aspects?
I mean, that tells you that -- first of all, it says, of course, "the Court shall consider" but I take it your position is when they say "the Court", they mean the Court or arbitrator?
Mr. McConnell: It means the decisionmaker.
Many statutes of course refer to things that courts might do, even though those statutes can be vindicated in arbitration.
Title VII for example has several provisions in which it says if the Court determines this, then it may do that, for example, issuing injunctions and so forth.
I -- when you import the substantive provisions of a statute into an arbitration proceeding, everything that would be substantively available from a court becomes available from the arbitrator, and that's the way I would read the punitive damages section here.
I note, by the way -- if I might just respond to a few of the points made by my friend in response to questions -- begin with Justice Sotomayor's interesting question about the fact that the statute appears to make even offering a waiver, offering an arbitration clause, a violation; it's actually even worse than that for two reasons.
One is that under their reading, a settlement is surely just as much a waiver as an arbitration is.
Now, they say, well, oh, well, it only means post-dispute waivers, but that is not what this statute says.
This statute is about all waivers.
In contrast to other statutes previously enacted, like the ADEA, which distinguish between pre-dispute and post-dispute waivers, this one does not.
So their position suggests that even a settlement offer is a violation of this statute.
Justice Ruth Bader Ginsburg: Well, Mr. Nelson just said no, that his position does include that fact.
And I asked him about post-dispute and he brought up settlement as well.
He said that their interpretation does not exclude settlement, in which the Plaintiff agrees--
Mr. McConnell: Well, Justice Ginsburg, that was his answer, but what that tells us is that he is he is not giving us a plain language meaning of the statute, which is all that they have.
Their entire position is based upon a plain language reading of the statute.
Remember the way the Ninth Circuit begins its opinion by quoting Alice in Wonderland.
It's -- it's all about plain language, but they do not offer us a plain language interpretation of this statute.
In order to avoid absurd consequences like making settlement offers a violation of the statute, they have to create exceptions, unspecified exceptions, to the text.
It would be much easier simply to follow the rules of construction that this Court had announced before this statute was enacted, and against which Congress operated.
Chief Justice John G. Roberts: Well, one of those rules of construction is that you don't read statutes when -- to the extent they lead to absurd results.
I think you can still say follow the plain language, but that doesn't mean you go so far as to say you can't enter into a settlement.
Mr. McConnell: I think it's easier though simply to assume that Congress was using words in the way that this Court used them in Gilmer just a few years before, that that's a much more straightforward way of reading the statute.
Justice Antonin Scalia: I'm not sure that a settlement is a waiver anyway.
It's a vindication.
You vindicate your right to a settlement.
I don't know that you waive it.
Mr. McConnell: Just as I think you can say that when you go to arbitration, you vindicate the substantive rights of the statute as well, and indeed this Court has used that very language in Mitsubishi with respect to -- to arbitration.
The -- just a couple of other small points.
My friend points out that this is the first statute in -- that at the time of this statute in 1996, that there had been no statute that explicitly barred arbitration, which is historically true but I think not particularly revealing.
It was only in '85 in Mitsubishi and then '91 in Gilmer that Congress became aware that it needed to do this in statutory causes of action.
And in -- by 1996, they were considering bills that explicitly avoided arbitration clauses.
They weren't enacted, but this is for political reasons.
Remember the political composition of Congress in 1996.
It is not surprising that statutes voiding arbitration agreements become more common when the political composition of the Congress changes.
This is fundamentally a political choice, and ought to be -- we ought to respect the choices that Congress has made.
Unless there are further questions, I will waive the remainder of my time.
Chief Justice John G. Roberts: Thank you, counsel.
Mr. McConnell: Unless it's an un-waivable right.
Chief Justice John G. Roberts: You have no right to time before the Court.
Thank you, counsel.
The case is submitted.
Chief Justice John G. Roberts: Justice Scalia has our opinion in Case 10-948, Compucredit Corporation versus Greenwood.
Justice Antonin Scalia: This is another case from the Ninth Circuit.
The respondents are individual who applied for and received a credit card marketed and issued by the petitioners.
In their applications, respondents agreed to resolve any claims against petitioners by binding arbitration.
In 2008, they filed a class action complaint against petitioners in Federal District Court alleging, as relevant here, violations of the Credit Repair Organizations Act.
That Act regulates the practices of credit repair organizations, which are defined as certain entities that offer services for the purpose of improving a consumer's credit record, credit history or credit rating.
The claims in the case largely involve petitioners' allegedly misleading representation that the credit card could be used to rebuild poor credit and their assessment of multiple fees upon opening of the accounts which greatly reduced the advertised credit limit.
The District Court denied petitioners' motion to compel arbitration of the claims, concluding that Congress intended claims under the Credit Repair Organizations Act to be nonarbitrable.
The Ninth Circuit affirmed.
We granted certiorari and now reverse.
The background law governing the issue before us is the Federal Arbitration Act.
It requires courts to enforce agreements to arbitrate according to their terms.
That is the case even when the claims at issue are federal statutory claims unless the FAA's mandate has been overridden by a contrary congressional command.
We hold that the Credit Repair Organizations Act contains no such override.
The Act does not expressly forbid arbitration but respondents point to the Act's disclosure provision, which sets forth a statement that the credit repair organization must provide to the consumer before any contract is executed.
One sentence of that required statement, and -- and it's verbatim, in the statute reads as follows, "You have a right to sue a credit repair organization that violates the Credit Repair Organizations Act.
Respondents maintain that this provision gives consumers the right to sue in a court of law and because the Act also prohibits the waiver of any rights that it provides, the arbitration agreement, which waived the right to bring an action in a court of law, cannot be enforced.
The disclosure provision creates only a right for consumers to receive a specific statement set forth in the statute, describing in layman’s terms and does necessarily incompletely the consumer rights that the law elsewhere provides.
It purports to be not a creation of rights but a summary of rights created under other provisions.
The right to which the right to sue language refers is contained in the Act's civil liability provision which gives consumers the right to enforce a credit repair organization's "liability" for failure to comply with the Act.
Respondents point out that that provision, the one that does create the right, uses terms such as "action", "class action" and "court", terms that call to mind judicial proceedings, but arbitration awards are enforced and can be challenged in court.
The fact that ultimately consumers under the Act have a right to go to court does not establish that they have a right to initial judicial enforcement displacing the provisions of the Federal Arbitration Act.
We have held that similar provisions in other statutes do not preclude arbitration agreements.
At the time of enactment of the Credit Repair Organizations Act in 1996, arbitration clauses in contracts of the type at issue here were no rarity.
Quite the contrary, the early 1990's saw the increased use of arbitration clauses in consumer contracts generally and in financial services contracts in particular.
Had Congress meant to prohibit these very common provisions, it would have done so in a manner much more direct than what respondents suggest.
Because the Credit Repair Organizations Act is simply silent on whether claims under the Act can proceed in an arbitrable form, the Federal Arbitration Act requires the arbitration agreement here to be enforced according to its terms.
The judgment of the Court of Appeals is reversed and the case is remanded for further proceedings.
Justice Sotomayor has filed an opinion concurring in the judgment, in which Justice Kagan joins.
Justice Ginsburg has filed a dissenting opinion.