http://www.commondreams.org/view/2011/05/05-0On April 27, 2011, the Supreme Court of the United States once again ruled in favor of big business. In the highly anticipated case of AT&T Mobility v. Concepcion, the Roberts led conservative block of the Supreme Court ruled 5-4 that federal law trumps state law in allowing companies to use arbitration clauses to prohibit consumers from joining class actions against the companies.
The case involved a California couple, Vincent and Liza Concepcion, who were charged $30.22 sales tax on the full retail price of a cellphone that was advertised as “free.” They filed a lawsuit against AT&T for deceptive practices on behalf of a class of consumers who had also overpaid. But the couple, along with their fellow plaintiffs, had signed a contract with AT&T that contained a “mandatory arbitration clause” which required them to settle any disputes through arbitration (a private legal proceeding) and barred them from seeking class-action treatment with other consumers, whether through arbitration or in a lawsuit brought in a traditional court.
Initially, both a federal district court and the Ninth Circuit Court sided with the Concepcions, saying it was unfair under a 2005 California Supreme Court ruling, for contracts to ban class-action litigation. However, this was overturned by the recent Supreme Court decision, which says federal law, specifically the Federal Arbitration Act of 1925, trumps state law.
Aside from the fact that the conservative Justices who purport to be staunch defenders of “states rights” abandoned their principles for corporate interests, this ruling has chilling implications for future corporate accountability. Corporations are now free to legally bar victims of their abuse from collectively suing in a court of law if the abused have signed a contract that includes a mandatory arbitration clause, regardless of state laws to the contrary. This could literally render companies immune from class actions and overall accountability.
More at the link --