Sheppard Mullin Financial Institutions Law Blog

Does the National Bank Act preempt state law banning age discrimination in employment? No, according to the Ninth Circuit, so long as state law does not contradict the federal age discrimination statute. Kroske v. U.S. Bank Corp., 05 C.D.O.S. 10798 (Dec. 23, 2005).

If California residents sue a Delaware bank and its credit card servicing company for alleged unlawful practices, and the underlying cardholder agreements contain a Delaware choice of law provision and a "hidden" clause prohibiting class-wide arbitration, should California nonetheless compel the name plaintiffs to arbitrate on an individual basis?

Answer: No, according to the First District Court of Appeal in Klussman v. Cross Country Bank, 05 C.D.O.S. 10602 (Dec. 15, 2005).

Assume that a California resident signs a cardholder agreement with a Delaware bank that includes an arbitration clause prohibiting class-wide arbitration. If the California resident sues the bank in a putative nationwide class action, can the bank enforce the agreement and compel arbitration on an individual basis?

Answer: Yes, according to the Second District Court of Appeal in Discover Bank v. Superior Court, 05 C.D.O.S. 10291 Dec. 7, 2005).