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 serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a…

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a variety of advertising, consumer protection, privacy, and product defect and safety claims, with exposure ranging from millions to billions of dollars. Based on his “proven record,” Andrew has been recognized as an “attorney you want on your side in a bet-the-company case.”

Andrew’s clients include those in the consumer products, life sciences, financial services, technology, automotive, gaming, and media and communications industries. He has consistently helped his clients prevail in litigation in federal and state courts across the country against putative class representatives, government agencies, state attorneys general, and commercial entities.

With a long history of representing companies subject to extensive federal regulation and oversight, Andrew has a unique ability to help courts understand the complex environment that governs clients’ businesses. Clients turn to Andrew because of his successful outcomes at all stages of litigation, his responsiveness and attention to their matters and his deep understanding of their businesses.

Andrew’s recent successes include:

Leading the successful defense of several of the world’s leading companies and brands in class actions accusing them of engaging in deceptive marketing or selling defective products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
Defeating claims against one of the nation’s leading consumer products companies in industry-wide, multidistrict class-action litigation challenging the company’s marketing and advertising of over-the-counter medicine containing allegedly ineffective ingredients, which earned Andrew recognition by American Lawyer as a “Litigator of the Week.”
Delivered wins in multiple nationwide class actions on behalf of leading financial institutions related to fees, disclosures, and other banking practices, including defending several financial institutions accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recognition as a “Class Action Group of the Year.”
Represented several consumer product and life sciences companies from lawsuits seeking economic damages arising out of the sale of products that allegedly caused personal injuries.
Helping several of the world’s most prominent companies from ESG-related claims accusing them of misrepresenting their practices.

Andrew has also achieved favorable outcomes for clients in commercial and indemnification disputes involving contracts, fraud, and other business tort claims. He helps companies navigate contractual and indemnification disputes with their business partners. Additionally, he provides guidance on arbitration agreements and has helped numerous clients avoid multi-district and class-action litigation by enforcing their arbitration agreements.

As a recognized thought leader on issues impacting class action litigation, Andrew regularly contributes to the firm’s blog, Inside Class Actions, and was recently featured in an interview with Litigation Daily on class-action litigation issues. In recognition of his achievements, he has been recognized by The American Lawyer as a Lawyer of the Week, and the Daily Journal recently included him on their list of Leading Commercial Litigators (2025).

Watch: Andrew shares insights on class action litigation, as part of our Navigating Class Actions video series.

 

Photo of Kanu Song Kanu Song

Kanu Song is a litigator who represents clients in the technology and life sciences industries in complex, high-stakes matters, including data privacy class actions, trade secret litigation, copyright and trademark disputes, and actions brought under unfair competition and consumer protection laws. She has…

Kanu Song is a litigator who represents clients in the technology and life sciences industries in complex, high-stakes matters, including data privacy class actions, trade secret litigation, copyright and trademark disputes, and actions brought under unfair competition and consumer protection laws. She has substantive experience in all stages of litigation, including arbitrations and appeals, with a strong track record of success on dispositive motions.

Kanu also maintains an active pro bono practice focused on serving women and children, and assisting individuals and small businesses with intellectual property disputes.