Supreme Court Could Give Corporations Blueprint to Cheat Consumers

The U.S. Supreme Court will hear oral arguments fortoday. If it rules in favor of AT&T, corporations will be allowed to use forced arbitration clauses as a tool to wipe out class actions.
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Let's say a wireless company promises you a free phone. You go for it, but then get charged an undisclosed $30. Not free, right? That $30 might not drive you to court. But when you multiply that by the millions of other customers in your position, and consider that the company is actually making hundreds of millions of dollars each year in unlawful gains due to its falsely "free" offer -- you would think there must be some way to hold the company accountable.

Unfortunately, an upcoming U.S. Supreme Court decision could strip you and the rest of the American public of your right to do so.

The U.S. Supreme Court will hear oral arguments for AT&T Mobility v. Concepcion today. If it rules in favor of AT&T, corporations will be allowed to use abusive, take-it-or-leave-it forced arbitration clauses as a tool to wipe out class actions. These are the clauses corporations insert into their contracts stating that all disputes will be resolved not in court but in forced, binding arbitration, according to the terms chosen by the corporation.

Experts nationwide are chiming in about the case and its enormous implications for worker and consumer rights.

•Public Citizen's Deepak Gupta, who will argue Concepcion on the consumers' behalf, notes in the LA Times that if the court decides federal law trumps state law in this case, there's no limit to what corporations could do. They will be given a blueprint to draft forced arbitration clauses that leave employees and consumers with essentially no recourse to challenge corporate wrongdoing in court.

•Brian T. Fitzpatrick, associate professor of law at Vanderbilt Law School and a visiting professor of law at Fordham Law School, writes in the San Francisco Chronicle that the case could be the most important in years, and that a ruling in favor of AT&T would a "terrible mistake": "There is a reason we create the class action device 40 years ago: sometimes businesses inflict injuries too small to sue over. How many people will sue when someone cheats them out of $100? How many lawyers will take a case worth $1,000? Not many. But, if people don't sue, businesses know they can cheat people out of small amounts with impunity."

•Bonnie Robin-Vergeer, the attorney for the DC Legal Aid Society, U.S. Public Interest Research Groups argues that "if the Court accepts AT&T's position, businesses could effectively strip consumers of their right to pursue small claims in any forum because, for small individual claims, class-wide proceedings often offer the only effective means for consumers to obtain redress and to force businesses to halt illegal practices."

If the court deals such a lethal blow to employee and consumer rights, it would further highlight the need for a legislative fix that would end these abusive forced arbitration clauses in the first place.

The Arbitration Fairness Act of 2009, which has been introduced in both the House and Senate, would ban forced arbitration in employment, consumer, franchise and civil rights disputes. If the Supreme Court rules the wrong way in Concepcion, it will be up to the newly elected Congress make it right.

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