Several Merchants Signed a Binding Arbitration Agreement with American Express

question 67

Multiple Choice

Several merchants signed a binding arbitration agreement with American Express Co.The arbitration agreement included a clause prohibiting class action arbitration.Later,after a serious dispute arose involving a federal statute,the merchants wanted to pursue class action arbitration against American Express arguing that it would be too expensive to pursue the claims individually.Assuming the Federal Arbitration Act applies,how should a court rule on the issue?

• A)The court should uphold the arbitration agreement itself and uphold the class action provision but limit any class action proceeding to no more than 20 plaintiffs.
• B)The court should uphold the arbitration agreement itself and uphold the class action provision but limit any class action proceeding to no more than 10 plaintiffs.
• C)The court should uphold the arbitration agreement itself but strike the provision prohibiting class action arbitration.
• D)The court should strike the whole arbitration agreement because a claim under federal law is involved,and the parties should be required to go to court for any relief.
• E)The court should uphold the agreement prohibiting class action arbitration.

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Definitions:

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government, after deductions and exemptions.

Progressive Tax

A taxation system where the tax rate increases as the taxable income increases, typically placing a higher burden on higher-income earners.

Tax Schedules

Detailed charts or tables provided by tax authorities that outline the rates at which taxes are levied on different levels of income or taxable activities.

Taxable Income

The portion of an individual's or entity's income that is subject to taxation according to governing laws.