In two putative class actions pending in the Eastern District of North Carolina, the Department of Justice has filed statements of interest urging the Court to deny defendants’ motions to compel arbitration of plaintiffs’ claims for violations of the Servicemembers Civil Relief Act.

In Padao v. American Express National Bank, No. 5:22-cv-00145-BO-RN (E.D.N.C.), and Espin v. Citibank, No. 5:22-cv-00383-BO-RN (E.D.N.C.), plaintiffs alleged that defendants American Express and Citibank violated the interest rate cap imposed by the SCRA on certain debts in connection with periods of military service.  Both defendants moved to compel arbitration based on arbitration clauses and waivers of representative proceedings in their credit card agreements.

In statements of interest filed in both cases, the DOJ urged the Court to deny defendants’ motions, contending that Congress amended the SCRA in 2019 to allow servicemembers to enforce their rights under that law on a class or representative basis “in accordance with the Federal Rules of Civil Procedure” and “notwithstanding any previous agreement to the contrary.”  These explicit references to the federal rules and to previous agreements, the DOJ argued, evince Congressional intent to override the Federal Arbitration Act’s mandate to enforce arbitration agreements according to their terms.  Moreover, according to the DOJ, this aspect of the 2019 amendment is not impermissibly retroactive because it introduces only “jurisdictional or procedural changes” and does not affect the parties’ underlying substantive rights.

While Padao and Espin focus on the narrow issue of arbitration agreements involving servicemembers under the SCRA, the DOJ’s filings provide an interesting perspective on arguments that might be made to interpret statutory provisions as conveying a Congressional command contrary to the FAA.

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Photo of Sonya Winner Sonya Winner

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports. She has handled numerous antitrust and consumer disputes, many of them class actions, in state and…

A litigator with three decades of experience, Sonya Winner handles high-stakes civil cases for clients in a wide range of industries, including banking, pharmaceuticals and professional sports. She has handled numerous antitrust and consumer disputes, many of them class actions, in state and federal courts across the country.

Sonya’s cases typically involve difficult technical issues and/or complex legal and regulatory schemes. She is regularly able to resolve cases before the trial phase, often through dispositive motions. But when neither summary judgment nor a favorable settlement is an option, she has the confidence of her clients to take the case all the way through trial and on appeal. Her recent successes have included a cutting-edge decision rejecting a “true lender” challenge to National Bank Act preemption in a class action involving interest rates on student loans, as well as the outright dismissal of a putative antitrust claim against the National Football League and its member clubs asserting an unlawful conspiracy to fix cheerleader compensation.

Sonya has been recognized as a leading trial lawyer by publications like Chambers and the Daily Journal. She is chair of the firm’s Class Action Litigation Practice Group.

Photo of Andrew Soukup Andrew Soukup

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which…

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which were defeated through dispositive pre-trial motions.
Andrew is co-chair of the firm’s Class Action Litigation practice group.

Andrew has helped his clients achieve successful outcomes at all stages of litigation, including through trial and appeal. He has helped his clients prevail in litigation against putative class representatives, government agencies, and commercial entities. Representative victories include:

  • Delivered wins in multiple nationwide class actions on behalf of large financial companies related to fees, disclosures, and other banking practices, including the successful defense of numerous lenders accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recent recognition as a “Class Action Group Of The Year.”
  • Successfully defending several of the nation’s leading financial institutions in a wide variety of litigation and arbitration proceedings involving alleged violations of RICO, FCRA, TILA, TCPA, FCBA, ECOA, EFTA, FACTA, and state consumer protection and unfair and deceptive acts or practices statutes, as well as claims involving breach of contract, fraud, unjust enrichment, and other torts.
  • Successfully defended several of the nation’s leading companies and brands from claims that they deceptively marketed their products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
  • Obtained favorable outcomes for numerous clients in commercial disputes raising contract, fraud, and other business tort claims.

Because many of Andrew’s clients are subject to extensive federal regulation and oversight, Andrew has significant experience successfully invoking federal preemption to defeat litigation.

Andrew also advises clients on their arbitration agreements. He has successfully helped numerous clients avoid multi-district class-action litigation by successfully enforcing the institutions’ arbitration agreements.

Clients praise Andrew for his personal attention to their matters, his responsiveness, and his creative strategies. Based on his “big wins in his class action practice,” Law360 named Mr. Soukup a “Class Action Rising Star.

Prior to practicing law, Andrew worked as a journalist.

Photo of Kanu Song Kanu Song

Kanu Song is a litigator specializing in complex commercial disputes, including intellectual property litigation, class actions, and claims brought under consumer protection and competition laws, such as California’s Unfair Competition Law (B. & P.C. § 17200).

She works with clients in the technology…

Kanu Song is a litigator specializing in complex commercial disputes, including intellectual property litigation, class actions, and claims brought under consumer protection and competition laws, such as California’s Unfair Competition Law (B. & P.C. § 17200).

She works with clients in the technology, entertainment, consumer brands, food, drug, and cosmetic industries through all stages of litigation, with a strong track record of success on early resolution and dispositive motions.