The Death Of The Class Action Lawsuit

In landmark decision of AT&T Mobility v. Concepion, the United States Supreme Court dealt a death blow to class action lawsuits in its 5-4 decision. The U.S. Supreme Court held that provisions in consumer contracts that waive the consumer’s right to bring a class action lawsuit are valid and enforceable.

Here are the facts: Vincent and Liza Concepcion signed a two year agreement with AT&T cellphone service. As part of a promotion by AT&T, the Concepcions received two free cell phones and they were then charged $30.22 by AT&T in sales tax for the phones. Since the cell phones were “free”, it did not make sense to the Concepcions that they had to pay a sales tax. The Concepcions sued AT&T for fraud in federal court and their case was joined with other lawsuits in a class action lawsuit.

In the class action lawsuit, AT&T argued that the Concepcions waived their right to bring a class action lawsuit by signing a written agreement requiring “individual arbitration”. In other words, the Concepcions were prohibited from being a member of a class action lawsuit and they should be forced to bring an “individual” claim for $30.22 against AT&T.

The federal courts in California ruled against AT&T. The federal courts held that the provision in the AT&T contract requiring “individual arbitration” was “unconscionable” and they allowed the Concepcions to move forward as members of the class action lawsuit. That’s when the U.S. Supreme Court decided to take action.

In a dramatic example of judicial activism, Justice Antonin Scalia of the U.S. Supreme Court reversed the decision of the appellate court. Justice Scalia held that the provision in AT&T’s contracts requiring individual arbitration was enforceable and furthermore, he specifically ruled that class-based arbitrations would not be permitted. In essence, Justice Scalia’s decision dealt a death blow to class action lawsuits.

Why should any of this matter to you? If you have a claim against AT&T (or any company for that matter) for $30.22, what rational lawyer will agree to represent you for fees arising from a $30.22 claim? No one! The fact is that no lawyer would agree to take on such a minor claim and few people have the knowledge or willpower to pursue the claim on their own for such a small sum. In other words, AT&T will not be held accountable for their wrongdoing.

AT&T gets to cheat large numbers of consumers out of individually very small sums of money and get away with it. This is not just limited to AT&T. Now that such waivers of class action lawsuits have been recognized by the US Supreme Court as enforceable, every major corporation in America will add such clauses to their consumer contracts. Every time you sign a boilerplate contract the next time you go to the store, you will be signing away your rights to bring a class action lawsuit.

So what does this mean for you? Does this only mean that you’re out $30.22? In the bigger picture what this means is that corporations have been given a license to cheat you out of very small sums of money (which can amount to millions of dollars for the corporation) without any risk of being held accountable. There will be virtually no way to hold corporations accountable for wrongdoing when they rip you off. That’s a shame.

If you want more information or have any questions, I welcome your call on my toll-free cell at 866-889-6882. You can always request my FREE book, The Seven Deadly Mistakes of Malpractice Victims, at the home page of my website, www.protectingpatientrights.com.