Corporate Block on Supreme Court Limits Class Action Suits

[The Straight Story]

Corporate Block on Supreme Court Limits Class Action Suits

The five-member pro-business block of the U.S. Supreme Court has ruled in favor of corporations that prefer to force consumers with complaints into arbitration hearings, rather than allowing them to band together in class-action lawsuits in civil court.

In AT&T Mobility v. Concepcion, the court struck down a California law that forbid companies from denying customers the right to sue as a group in court. The issue involved contracts that consumers often accept as part of buying cell phones or other products that stipulate any grievances be handled by an arbitrator. AT&T was accused of defrauding consumers by advertising free cell phones and then charging $30.22 in sales tax and other fees.

The U.S. Ninth Circuit Court had ruled that AT&T’s class action waiver violated California’s Discover Bank rule which, among other things, allowed class action suits instead of arbitration if “it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money.”

AT&T hailed the ruling, saying its arbitration program is “free, fair, easy to use and consumer friendly.” AT&T was backed in this case by several heavy hitters in the big business community, including the American Bankers Association, The Financial Services Roundtable and the U.S. Chamber of Commerce.

http://www.allgov.com/Top_Stories/ViewNews/Corporate_Block_on_Supreme_Court_Limits_Class_Action_Suits_110502