Submitted by Elaine Magliaro, Guest Blogger
Last Wednesday, the Supreme Court handed down its ruling in the case of AT & T Mobility v. Concepcion. The justices split along ideological lines
once again. The 5 to 4 decision came down on the side of corporations—and most likely eliminated the right of citizens to band together to bring class action lawsuits against large corporations.
The Concepcion case involved cellphones and a common type of contract that requires customers to press their claims through arbitration instead of through lawsuits. As reported by Robert Barnes in The Washington Post, these types of contracts “which mandate individual rather than group claims, are becoming standard for companies offering loans, cable service, credit cards and even employment.”
In a November 2010 Mother Jones article titled Consumer Protection’s Citizens United, Stephanie Mencimer wrote: “AT&T v. Concepcion has been called the consumer protection equivalent of Citizens United. At stake is the ability of consumers to stop corporate ripoffs via class action lawsuits, which allow lots of people with small claims to band together and bring a suit large enough to make it worth a lawyer’s time. The case could affect everything from the rights of workers to fight systemic discrimination or wage violations to the ability of cell phone customers to fight the small but lucrative rip-offs that are so common among wireless providers. As a sign of how big a case this is for corporate America, the wireless lobby has hired former Solicitor General Paul Clement, a rock star of the Supreme Court bar, to represent it on an amicus brief in the case. The parties backing AT&T include the Chamber, Comcast, Dell, and DirectTV.”
According to a Think Progress report written by Ian Milhiser about the Supreme Court’s ruling in AT & T Mobility v. Concepcion, Justice Scalia’s opinion in the case will permit corporations “to refuse to do business with anyone who refuses to sign away their right to bring a class action lawsuit if the corporation breaks the law. After Concepcion, it is only a matter of time before nearly every credit card provider, cell phone company, mail-order business or even every potential employer requires anyone who wants to do business with them to first give up their right to file a class action.” As reported by Adam Liptak in The New York Times, businesses will now be able to use standard-form contracts to forbid consumers from banding together in a single arbitration. Liptak wrote: “Though the decision concerned arbitrations, it appeared to provide businesses with a way to avoid class-action lawsuits in court. All they need do, the decision suggested, is use standard-form contracts that require two things: that disputes be raised only through the informal mechanism of arbitration and that claims be brought one by one.”
Milhiser also wrote that the ruling in AT & T Mobility v. Concepcion expands on an abusive practice known as “forced arbitration.” This expansion could allow corporations to force their consumers, workers, and patients to sign away their right to sue the company in a real court.
Amanda Rice reported that the Court held that California state contract law, which provides that class-action waivers in arbitration agreements are unenforceable when certain criteria are met, is preempted by the Federal Arbitration Act. (SCOTUS blog)
In his decision Scalia wrote: “States cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons.” He said that if the case was allowed to proceed as a class action, it would run afoul of a federal law that promotes arbitration.
Writing for the minority, Justice Breyer said that the decision made at the state court level did not violate the federal law that favored arbitration. “Class arbitrations,” Justice Breyer wrote, “are perfectly appropriate ways to resolve claims that are minor individually but significant in the aggregate.” Breyer said he was puzzled by the assertion made by Scalia that there was tension between the goals of arbitrations and class treatment. “Where does the majority get its contrary idea — that individual, rather than class, arbitration is a fundamental attribute of arbitration?”
Breyer said requiring consumers to arbitrate cases on an individual basis could lead parties making claims to abandon small-money cases rather than to go forward with litigation. “What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?”
Would a “rational lawyer” care to answer that question posed by Justice Breyer?
SOURCES
Consumer Protection’s Citizens United (Mother Jones)
Supreme Court Nukes Consumers’ Rights In Most Pro-Corporate Decision Since Citizens United (Think Progress)
The Supreme Court’s One Thousandth Cut Against Consumers (Think Progress)
Supreme Court rules against consumers. Again. (Daily Kos)
A Poor Concepcion of Consumer Rights (Huffington Post)
The AT&T v. Concepcion decision and the final oral argument of the Term. (SCOTUS Blog)
Supreme Court Allows Contracts That Prohibit Class-Action Arbitration (New York Times)
Supreme Court says arbitration agreements can ban class-action efforts (Washington Post)
After AT&T Ruling, Should We Say Goodbye to Consumer Class Actions? (Wall Street Journal)
In the words of the late, great Marvin Gaye, “What’s Goin’ On” in this country.
Elaine,
I hope the Senate has more sense.
rafflaw,
Regarding Massachusetts: I don’t have a clue. I was shocked when I read the news. The bill hasn’t passed in the state Senate yet.
Elaine,
I think you are right. The Republicans will stop at nothing to make sure Elizabeth Warren doesn’t get to do her job. Between the filibusters and the judges that were installed during the Bush years, we will be paying for it a long time. The Democrats need to remember how to use the filibuster when they get the chance.
BTW, this off topic, but what is up with the Legislature in Massachusetts voting to curtail the bargaining rights of public employees? What happened there in a Democrat controlled House??
After Arbitration Ruling, Watch Warren’s Consumer Bureau
Apr. 27 2011
By Daniel Fisher
Forbes
http://blogs.forbes.com/danielfisher/2011/04/27/after-arbitration-ruling-watch-warrens-consumer-bureau/
Excerpt:
Corporate attorneys best not gloat too much over the Supreme Court’s decision in AT&T vs. Concepcion today. The decision reaffirms the power of the Federal Arbitration Act to squelch consumer class actions. But a lawyer who’s crafted many of the arbitration contracts at the core of the case says consumer advocates will have another chance to overrule the court before the Obama administration’s new Consumer Finance Protection Bureau.
**********
I’m not so sure consumer advocates will get the chance. I heard Elizabeth Warren talking about the Consumer Finance Protection Bureau on The Daily Show a few nights ago. She said the Republicans are trying to defund and defang the new bureau.
I stand with Blouise, SWM and Elaine on this. One of they ways that the Plutocracy has outsmarted those opposed has been to focus on packing the courts with pinpoint accuracy. This hampered FDR and other Presidents of good will. I grew up when the Warren Court held sway and so my opinion of judicial fairness was skewed by those glorious years. The Plutocracy took notice and things have definitely changed.
Swarthmore mom
1, April 30, 2011 at 1:32 pm
Bush’s nomination of Roberts and Alito will have a lasting impact on society for decades. Court appointments are yet another reason to vote for Obama over his republican opponents.
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You know I’m with you on this … and ready to defend the stance!
Why blame the Court? Congress passed the law at issue and Congress can change it.
Sorry,heres link for Family Care situation here in Jersey.
http://www.nj.com/news/index.ssf/2011/04/nj_looking_to_feds_for_permiss.html
The democrats have had control of the white house only 10 out of the last 30 years. The courts are packed with pro-corporation republican judges.
Elaine M.:
“Our rights are being whittled away faster and faster…at both the state and national level”
A perfect example.
N.J. plans to seek federal approval to reduce parent eligibility for FamilyCare health insurance
Published: Friday, April 29, 2011, 8:35 PM Updated: Saturday, April 30, 2011, 8:35 AM
“http://www.nj.com/news/index.ssf/2011/04/nj_looking_to_feds_for_permiss.html”
Now heres the smack in the face:
Federal government demands N.J. re-pay $271M for commuter tunnel Gov. Christie canceled
Published: Saturday, April 30, 2011, 12:24 AM Updated: Saturday, April 30, 2011, 8:38 AM
http://www.nj.com/news/index.ssf/2011/04/federal_government_orders_nj_t.html
“The Christie administration hired the Washington law firm Patton Boggs in December to help clear the state of its debt obligations, and it has paid the firm over $800,000 in legal fees. The law firm did not respond to several requests for comment.”
Elaine,
Great job. It seems obvious that the purpose of the Roberts Court is to make sure that corporations get their fair piece of the rights pie. Unfortunately for the rest of us, corporations are very hungry pie eaters.
eniobob,
Our rights are being whittled away faster and faster…at both the state and national level.
Nal,
I had planned to write up a post about Ayn Rand and Paul Ryan–but you beat me to the punch last weekend.
That said, I still may work on the post. I think it’s really interesting finding out where a lot of our legislators–both state and national–are getting their ideas for budgets and bills. Until several weeks ago, I had never heard about ALEC (American Legislative Exchange Council)–and I had no idea how ubiquitous the tentacles of the Koch Brothers were.
Swarthmore mom,
I read a report some months ago about the Roberts Court and how often it rules in favor of corporations.
Here’s a link to one article on the subject:
Justices Offer Receptive Ear to Business Interests
By Adam Liptak
http://www.nytimes.com/2010/12/19/us/19roberts.html
Excerpt:
WASHINGTON — Almost 40 years ago, a Virginia lawyer named Lewis F. Powell Jr. warned that the nation’s free enterprise system was under attack. He urged the U.S. Chamber of Commerce to assemble “a highly competent staff of lawyers” and retain outside counsel “of national standing and reputation” to appear before the Supreme Court and advance the interests of American business.
“Under our constitutional system, especially with an activist-minded Supreme Court,” he wrote, “the judiciary may be the most important instrument for social, economic and political change.”
Mr. Powell, who joined the Supreme Court a year later in 1972 and died in 1998, got his wish — and never more so than with the court led by Chief Justice John G. Roberts Jr.
The chamber now files briefs in most major business cases. The side it supported in the last term won 13 of 16 cases. Six of those were decided with a majority vote of five justices, and five of those decisions favored the chamber’s side. One of the them was Citizens United, in which the chamber successfully urged the court to guarantee what it called “free corporate speech” by lifting restrictions on campaign spending.
The chamber’s success rate is but one indication of the Roberts court’s leanings on business issues. A new study, prepared for The New York Times by scholars at Northwestern University and the University of Chicago, analyzed some 1,450 decisions since 1953. It showed that the percentage of business cases on the Supreme Court docket has grown in the Roberts years, as has the percentage of cases won by business interests.
The Roberts court, which has completed five terms, ruled for business interests 61 percent of the time, compared with 46 percent in the last five years of the court led by Chief Justice William H. Rehnquist, who died in 2005, and 42 percent by all courts since 1953.
Those differences are statistically significant, the study found. It was prepared by Lee Epstein, a political scientist at Northwestern’s law school; William M. Landes, an economist at the University of Chicago; and Judge Richard A. Posner, who serves on the federal appeals court in Chicago and teaches law at the University of Chicago.
OS gets all the credit… Sorry for hijacking your newly posted thread Elaine M.:
http://www.dailykos.com/story/2011/04/30/971631/-UPDATED:-Anonymous-Hits-Chamber
Elaine, good post, good topic. Now I’ve got to scrap my Concepcion post and get to work on another. 🙂
There is a scene in the movie Soylent Green where a young boy is being shown a tree,and he’s being told thats what a tree looked like back in the day,and you get the feeling that this is a further example of our rights being put in the history books also.
OT… maybe…
OS brought this to my attention in another thread, citing a Daily Kos article:
http://www.metafilter.com/103035/Anonymous-hits-the-US-Chamber-of-Commerce
Anonymous hits the US Chamber of Commerce
April 30, 2011 8:38 AM
Last night at midnight, more than a gigabyte of internal memos from the US Chamber of Commerce and two other conservative think-tanks were leaked to the Internet. Although no announcement has been posted to the semi-official Anonymous web site, the archive contains a README file crediting the hacker/cracker/griefer collective.
Anonymous’ scrapes with the Chamber of Commerce started back in February, when leaked documents from the security firm HBGary implicated the CoC in a proposed smear campaign against progressive journalists. Meanwhile, The Mackinac Center for Public Policy and the American Legislative Council have appeared recently on the blue for their involvement in Wisconsin and Michigan’s budget battles.
end of posting on metafilter
Bush’s nomination of Roberts and Alito will have a lasting impact on society for decades. Court appointments are yet another reason to vote for Obama over his republican opponents.