The U.S. Supreme Court has severely limited the ability of ordinary folks to file class action lawsuits against large corporations whose conduct has injured or damaged a number of persons. With this decision, this Court has dealt a crushing blow for the rights of consumers. In a 5-4 split, the High Court’s majority said businesses can block their customers from using class-action arbitration. Five members of the Court said federal laws allowing class-action arbitration override state laws that would invalidate contracts that ban it.
The decision came in a dispute between AT&T Mobility and a California couple who objected to being charged around $30 in sales tax for what they were told was a free cell phone. Many large businesses have required arbitration clauses in consumer contracts to protect them from having to face their customers in court. The Supreme Court’s decision means that corporations won’t have to worry anymore about consumers, or employees joining together and fighting them either in lawsuits or in arbitration. “Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold companies accountable for fraud, discrimination or other illegal practices,” said Deepak Gupta, a Public Citizen lawyer who argued the case.
Sen. Patrick Leahy, chairman of the Senate Judiciary Committee, believes the decision will greatly hurt the rights of consumers to be protected by state laws. Sen. Leahy had this to say after the Court’s opinion was related:
Class actions are an effective way to ensure consumer protection, but today’s opinion by the Roberts court continued to move in a direction that undermines this access to justice for hard-working Americans.
Justice Scalia, who wrote the opinion, was joined by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito. The Court’s four members who dissented were Justices Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan. Justice Breyer said the High Court should not have interfered with the state law, saying:
California is free to define unconscionability as it sees fit, and its common law is of no federal concern so long as the state does not adopt a special rule that disfavors arbitration.
This action by a divided court will go down as one of the most devastating decisions affecting consumers in recent years. Even the Tea Part zealots, who say they believe in the U.S. Constitution, should agree.
Source: Associated Press
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