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SCOTUS mulling the future of class-action suits

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Defense and plaintiffs attorneys alike have their eyes on the Supreme Court of the United States, which has before it a case that some say could spell the end to class-action lawsuits in the name of contractual arbitration.

The nation’s highest court is considering AT&T Mobility v. Concepcion, No. 09-893, a case that comes from California and the 9th Circuit Court of Appeals. The issue is whether the Federal Arbitration Act preempts states from allowing class arbitration or litigation as a part of an arbitration agreement. Dozens of amicus parties have filed briefs and the SCOTUS heard arguments today, meaning they’ll likely issue a decision at some point before the term ends in June 2011.

In this case, the consumers  - Liza and Vincent Concepcion - sued the phone giant after entering into a purchase agreement for cell phone service in California, claiming that AT&T fraudulently charged tax on a “free” phone despite advertising otherwise. The Concepcions sued on behalf of a class of consumers who’d also allegedly overpaid, but part of a customer service agreement they’d signed included an arbitration clause that requires the customer and company to arbitrate any disputes arising from the agreement.

When the Concepcions in 2006 filed the suit in the Southern District of California, AT&T argued the suit shouldn’t have been allowed because only arbitration could be used to resolve the dispute. The District Court held that the arbitration clause was unconscionable under that state’s law and wasn’t enforceable because it didn’t allow for class-action litigation, and the 9th Circuit affirmed on the grounds that the Federal Arbitration Act didn’t preempt California law on unconscionability.
Now, the justices are considering the issue and some national legal experts have opined that the justices may rule in AT&T’s favor. As a result, that could lead to significant changes throughout the country.

The National Workrights Institute argues that a court decision in AT&T’s favor could mean that employment cases wouldn’t be able to use class-action litigation and that wide-spread discriminatory practices would become more common because of the arbitration requirements. The Institute’s brief spells out how it fears attorneys wouldn’t be willing to take these and similar cases without the assurance of adequate attorneys’ fees that can come from class-action suits. Similar thoughts are echoed by other groups, such as the NAACP.

AT&T and some amicus parties, such as the Defense Research Institute, argue that the court striking down its arbitration clause would distort contract law and also signal a willingness to interfere with corporate operations. Millions of parties enter into arbitration agreements annually, and this case could determine what might happen with those agreements inside or out of court.
 

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  1. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  2. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  3. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  4. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  5. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

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