U.S. Supreme Court Stifles Class Actions

Employment / Personal Injury / Business

The U.S. Supreme Court of Corporate America is at it again.  After opening the floodgates of corporate contributions into the electoral process, the Supreme Court recently slammed the door on consumers banding together to hold corporations accountable for their misdeeds.

In the 5-4 decision in AT&T Mobility v. Concepcion, the Supreme Court upheld a clause in AT&T’s customer cell phone contracts requiring the customer to individually arbitrate any dispute with the company and prohibiting participation in a class action.  AT&T was marketing cell phones at discount prices, but charging consumers sales tax on the full retail price, a difference of $30.22.  Considering the number of cell phones sold by AT&T, a class action for $30.22 each, plus attorney fees, could have cost it millions.  The likelihood of any individual consumer seeking arbitration over $30.22, however, is practically nil.  Undoubtedly, the consumer will be hard pressed to find a lawyer willing to represent them.

Until the Supreme Court’s decision, some states had laws invalidating individual arbitration clauses.  Now the  Supreme Court says the states may not protect their residents from overreaching corporations.  Corporations are now free to fill their coffers with illegal fees and overcharges knowing that, if caught, they only risk reimbursement of $30.22 to the one knowing, rather than returning millions to many who never knew they had been fleeced. 

Legislation from Congress will be required to undo what the Supreme Court has done.  Don’t expect it anytime soon.

class action law suit, supreme court

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