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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. Future generations will be amazed that we prosecuted people for possessing a harmless plant. The New York Times came out in favor of legalization in Saturday's edition of the newspaper.

  2. Well, maybe it's because they are unelected, and, they have a tendency to strike down laws by elected officials from all over the country. When you have been taught that "Democracy" is something almost sacred, then, you will have a tendency to frown on such imperious conduct. Lawyers get acculturated in law school into thinking that this is the very essence of high minded government, but to people who are more heavily than King George ever did, they may not like it. Thanks for the information.

  3. I pd for a bankruptcy years ago with Mr Stiles and just this week received a garnishment from my pay! He never filed it even though he told me he would! Don't let this guy practice law ever again!!!

  4. Excellent initiative on the part of the AG. Thankfully someone takes action against predators taking advantage of people who have already been through the wringer. Well done!

  5. Conour will never turn these funds over to his defrauded clients. He tearfully told the court, and his daughters dutifully pledged in interviews, that his first priority is to repay every dime of the money he stole from his clients. Judge Young bought it, much to the chagrin of Conour’s victims. Why would Conour need the $2,262 anyway? Taxpayers are now supporting him, paying for his housing, utilities, food, healthcare, and clothing. If Conour puts the money anywhere but in the restitution fund, he’s proved, once again, what a con artist he continues to be and that he has never had any intention of repaying his clients. Judge Young will be proven wrong... again; Conour has no remorse and the Judge is one of the many conned.

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