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July 25, 2012 / Admin

Critical Consumers’ Right Case Gets Supreme Court Review Tomorrow

On November 9, 2010, the United States Supreme Court will hear arguments in AT&T Mobility v Conception. The court will decide whether The Federal Arbitration Act preempts state courts from striking down class action bans in arbitration agreements. Large corporations, such as AT&T, frequently insert in their boilerplate customer agreements, often in fine print, provisions requiring that any dispute arising from the agreement be arbitrated and brought on behalf the individual consumer alone and not as a class action on behalf of other similarly impacted consumers. These big companies know that the amount of a single consumer’s dispute is often less than a couple hundred dollars, that consumers have little time and incentive to litigate their single small claim and no attorney would represent them with such a small amount in dispute. For example, the Concepcions sued AT&T claiming that AT&T represented that that their wireless service included free cellphones but the phones actually came with charges.

The only effective way to recoup small amounts of money owed to many consumers by a corporate wrongdoer is by grouping the claims as a class action. Class actions are the only “big stick” consumers have to fight large corporations and the threat of them deters corporate wrongdoing. Not surprisingly, corporations desperately want to halt class actions. California’s Supreme Court has ruled that class action bans in consumer agreements are unconscionable and unenforceable and the trial court and United States Ninth Circuit Court of Appeals in the Conception’s federal court case ruled similarly. Now the issue is before the United States Supreme Court, known to be conservative and pro-business.

An article by David Lazarus in the November 5, 2010 Los Angeles Times summarizes the issues raise by the case in plain English. SCOTUSblog has a link to all of the briefs. Look for future blogs here on this important case affecting consumer rights.


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