Supreme Court to Hear Goldman Sachs Bankruptcy Arbitration Case

The US Supreme Court granted Goldman Sachs Bank USA’s petition for review in an order issued November 6. The appeal concerns whether customers can be required to arbitrate claims alleging that a lender continued collection efforts after they filed for bankruptcy.

Apple Card customers Rhea Brown and Kevin Maze brought a proposed class action alleging that Goldman Sachs Bank USA continued efforts to collect balances on their cards after they sought bankruptcy protection.

Filing for bankruptcy generally triggers an automatic stay covering most creditor collection activity.

Goldman asked for the disputes to be handled through arbitration under provisions in the customers’ credit card agreements. However, a divided Fourth US Circuit Court of Appeals rejected the request in March 2026.

The majority said arbitration would weaken centralized bankruptcy proceedings and bankruptcy courts’ ability to enforce automatic stays.

Circuit Judge Robert King dissented, arguing that the majority had “needlessly created a circuit split with the Second Circuit,” which permitted arbitration in a comparable 2006 case.

Goldman subsequently asked the Supreme Court to resolve the disagreement between the appellate courts. The bank argues that lower courts lack clear guidance on how federal arbitration law applies to bankruptcy disputes.

Brown and Maze maintain that bankruptcy judges must retain the ability to enforce automatic stays and award damages when creditors violate them.

The American Bankers Association has backed Goldman’s appeal, warning that the conflicting decisions create “significant real-world problems” affecting hundreds of thousands of debtor-creditor relationships each year.

The outcome could clarify when banks can enforce arbitration clauses in disputes over alleged collection activity during bankruptcy. It could also affect the wording of credit agreements and banks’ handling of customers seeking bankruptcy protection.

A ruling is expected before the Supreme Court’s current term concludes in mid-2027.