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Greg Webb
Greg Webb
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Consumer Arbitration Clauses: U.S. Supreme Court Ruling Favors Big Business

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This week, the U.S. Supreme Court handed down a decision (5-4) consistent with their usual ideological views that customers "bound by arbitration in a contract" have to abide by the contract even when state law permits a class-action suit for claims resulting from the deal. The Federal Arbitration Act says states can’t discriminate against arbitration. In Justice Scalia’s opinion, if a state were able to block an arbitration agreement, there would be little to prevent states from "declaring all agreements for dispute resolution are ‘unconscionable’." (USA Today, Joan Biskupic, 04/28/2011). Despite Justice Scalia’s opinion, this writer tends to agree with Deepak Gupta of Public Citizen, that this decision hurts "people who seek "to hold companies accountable for fraud, discrimination or other illegal practices." The origin of this case stemmed from two consumers, Vincent and Liza Concepcion, bringing a class-action lawsuit against AT&T Mobility alleging fraud (under California law) because the company charged them $30 in state taxes for what was supposed to be a ‘free’ phone."

While most mobile phone bill charges are murky at best (this writer recommends everyone check their bills immediately upon receipt each month), I believe Vincent and Liza are real champions for consumer rights. Unfortunately, I am not surprised that the High Court rulling came down in favor of AT&T.