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February 6, 2009 10:00 AM

Litigator of the Week: Gary Friedman of Friedman Law Group

Posted by Ben Hallman

We haven't written much about the $2 billion merchant antitrust class action against American Express, but our negligence ends today with our selection of Gary Friedman of the eight-lawyer Friedman Law Group as our Litigator of the Week. Last Friday, the 47-year-old self-described "refugee" from big law (Friedman worked at Skadden, Arps, Slate, Maher & Flom and Sidley Austin before starting his own firm in 1996) won an important ruling from the U.S. Court of Appeals for the Second Circuit that will allow small merchants to join large ones in the case against Am Ex. (Here's a New York Law Journal story about the decision.)

The class action accuses the credit card company of forcing merchants to accept all American Express credit and debit cards as a cost of doing business, but the question before the Second Circuit was much narrower: Should "small" merchants (those that have less than $10 million in Am Ex volume each year) be held to the boilerplate contract they received from the credit card company, which included a mandatory arbitration clause and a class action waiver? Manhattan federal district court judge George Daniels had ruled that the enforceability of the waiver clause was a question to be determined in arbitration, but the appellate panel disagreed, finding that it was up to the courts to decide. The Second Circuit also said that it was unwilling to grant "de facto immunity from antitrust liability by removing the plaintiffs' only reasonably feasible means of recovery."

That's clearly an issue of concern to the appeals court, which noted that contractual class action waivers are increasingly common--and controversial. The judges didn't issue a blanket finding on such provisions in the Am Ex opinion, but Friedman told us the decision nevertheless sets an important precedent. If claimants can prove through careful documentation--as his clients did--that individual litigation would cost more than what they might recover, then courts, he said, are likely to allow suits to go forward despite waiver clauses. "[The circuit court] recognized that these are not dispute resolution clauses that deserve deference," Friedman said. "These are liability avoidance clauses." (Julia Strickland of Stroock & Stroock & Lavan represented American Express at the Second Circuit.)

When Friedman's not plowing through the 20 million pages of discovery or 1,500 deposition transcripts the four-year-old Am Ex class action has generated, he has a pretty interesting caseload. Back in his Sidley Austin days, he told us, he did work for troll-haired boxing promoter Don King. That led to a roster of boxing clients, including Northern Ireland middleweight John Duddy, who is putting his 25-0 record on the line at Madison Square Garden on February 21.

What's the nexus, we wondered, between boxers and merchants suing Am Ex? Believe it or not, there is one! When boxers have legal problems, Friedman told us, it's usually because they're having trouble getting out of their contracts. Who knows? Maybe Freidman's Second Circuit win will someday come in handy for a class of disgruntled practitioners of the sweet science.

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