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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. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  2. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  3. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

  4. I am sorry to hear this.

  5. I tried a case in Judge Barker's court many years ago and I recall it vividly as a highlight of my career. I don't get in federal court very often but found myself back there again last Summer. We had both aged a bit but I must say she was just as I had remembered her. Authoritative, organized and yes, human ...with a good sense of humor. I also appreciated that even though we were dealing with difficult criminal cases, she treated my clients with dignity and understanding. My clients certainly respected her. Thanks for this nice article. Congratulations to Judge Barker for reaching another milestone in a remarkable career.

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