Consumers Just Lost Big In Their Fight With Credit Card Companies by Reuters @FortuneMagazine November 19, 2015, 1:56 PM EST E-mail Tweet Facebook Linkedin Share icons The credit card industry won a big legal victory Thursday as a federal appeals court rejected claims by a group of consumers that big issuers colluded to require that disputes be settled in arbitration rather than through class-action lawsuits. By a 3-0 vote, the 2nd U.S. Circuit Court of Appeals in New York upheld a lower court ruling that American Express AXP , Citigroup C , and Discover Financial Services DFS did not violate the Sherman antitrust law in forcing cardholders to submit to arbitration. Consumers argued that card-issuing banks and their lawyers broke the law when they held 28 meetings from May 1999 to October 2003 to discuss how to impose mandatory arbitration clauses in cardholder agreements. In April 2014, U.S. District Judge William Pauley ruled after a five-week bench trial that consumers failed by only a “slender reed” to show collusion, despite “conscious parallel action” among banks to require arbitration clauses. The appeals court that said Pauley’s findings did not constitute “clear error,” and upheld them. “The district court found that the ‘final decision to adopt class action-barring clauses was something the issuing banks hashed out individually and internally’,” the appeals court wrote. “That conclusion is plausible in light of the record viewed in its entirety, and we cannot say that the district court was ‘clearly erroneous’ in reaching this conclusion.” Merrill Davidoff, a lawyer for the cardholders, said his clients disagree with the decision and have not decided whether to appeal. Citigroup and American Express had no immediate comment. Discover did not immediately respond to a request for comment. Arbitration clauses have in recent years become more prevalent in consumer contracts, including for such things as cellphone, cable TV, and Internet service. Companies often prefer them to class-action litigation, which lets consumers pool resources and potentially obtain greater recoveries. In contrast, many consumers may choose not to arbitrate because the chance of success is low and the cost of pursuing individual claims can be prohibitive. Cardholders had sought to force American Express, Citigroup, and Discover to remove arbitration clauses from their cardholder agreements for eight years. In April 2010, Bank of America BAC , Capital One Financial COF , HSBC Holdings HSBC , and J.P. Morgan Chase JPM settled with the cardholders by agreeing to remove their arbitration clauses for 3 1/2 years.