AAJ Response to AT&T Mobility v. Concepcion SCOTUS Decision

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For Immediate Release: April 27, 2011

Contact: Michelle Widmann
202-965-3500, ext. 8369
media.replies@justice.org

AAJ Response to AT&T Mobility v. Concepcion SCOTUS Decision

 

Washington, DC The following is a statement from American Association for Justice (AAJ) President Gibson Vance on today’s U.S. Supreme Court ruling in AT&T Mobility v. Concepcion:

“The Supreme Court has allowed major corporations to grant themselves immunity when they cheat consumers or employees.  This decision leaves Americans with practically no recourse to challenge corporate wrongdoing and gives corporations a blueprint to draft forced arbitration clauses to avoid accountability for a wide range of unfair or illegal practices.

“This is a death blow to Americans’ chances for justice when faced with forced arbitration clauses.  This devastating decision has the potential to result in virtually no consumer or employee cases involving small claims being heard anywhere.  Corporations will now be allowed to get away with sweeping wrongdoing, particularly where the damages would be too small to justify pursuing individual claims.

“Many states have deemed provisions banning class actions unconscionable.  This decision preempts state law and further highlights the need for a legislative fix that would end the use of forced arbitration.  It is imperative that Congress pass the Arbitration Fairness Act to protect consumers and employees from these abusive practices.”

The Center for Constitutional Litigation filed an amicus brief on behalf of AAJ, which can be found here.  If you would like to speak to an AAJ spokesperson further about the implications of this decision, please let me know.

Background:

  • Liza and Vincent Concepcion sued AT&T in 2006, alleging that the wireless carrier defrauded millions of customers in California by advertising phones as “free,” then tacking on an undisclosed $30 charge for the phone.
  • If multiplied across all AT&T customers, the $30 charge would amount to millions of dollars in allegedly wrongful gains.
  • AT&T sought to dismiss the case by invoking a forced arbitration clause containing a class-action ban that it had placed in the Concepcion’s contract.
  • Both the California District Court and the Ninth Circuit rejected AT&T’s request, holding that the class-action ban was unconscionable under California law because it would exculpate the company from accountability for wrongdoing.
  • Courts applying the contract law of 20 states have struck down class-action bans for the same reason – because they would function as a “get out of jail free” card for corporate wrongdoing.
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