Oakland-San Francisco Attorney Comments on Threat to the Class Action Suit

According to the Los Angeles Times, AT&T Mobility vs. Concepcion, a case involving AT&T that goes before the U.S. Supreme Court next week, will have serious ramifications for potentially millions of consumers if AT&T gets their way. If a majority of the nine justices vote on the side of AT&T, any business that issues a contract to consumers-such as for credit cards, cell phones, or cable TV-would be able to prevent them from joining class-action lawsuits. This would take away
a consumer’s leverage when they want to seek compensation from an entity, especially when small amounts of money are involved, as class actions allow plaintiffs to band together in seeking compensation or redress and gives clout to their claims. The ban on class actions could apply to employment agreements and union contracts. Consumer advocates say that without the threat of class-action lawsuits, many businesses would be free to engage in unfair or deceptive practices. A lot of people would be stripped of their right to sue over contracts violations, as not many would be willing to litigate on their own a case involving small amounts.

What is to be decided is whether the Federal Arbitration Act of 1925 preempts state courts from striking down class-action bans. The federal law requires both sides in a dispute to take their grievance to an arbitrator, rather than a court, if both sides have agreed in advance to do so. Initially, AT&T asked the U.S. District Court for the Southern District of California to dismiss the case because its contract forbade class actions. The court ruled that a class-action ban violates state law and is not preempted by the federal law, and the U.S. 9th Circuit Court of Appeals upheld the lower-court ruling. Then AT&T petitioned the Supreme Court to hear the case. As it stands, it looks as if high court is interested in extending the reach of the Federal Arbitration Act.

If the court decides that the federal law trumps state law in this case, there would be virtually no limit to control that companies hold over the consumer. Put another way, all companies and employers could prevent people from joining class action by putting arbitration clauses in contracts. As a result, a number of consumer groups and civil rights organizations, including the Consumer Federation of America and the Lawyers’ Committee for Civil Rights Under Law, have filed briefs that support the right to class actions. It comes as no surprise that other telecom companies and those with corporate interests, such as the American Bankers Assn., the Financial Services Roundtable and the U.S. Chamber of Commerce, are backing the AT&T case.

Here at the Brod Law Firm, we handle class action lawsuits against governmental agencies and corporations, and our firm has the experience required to win these kinds of cases. For more information about the potential class action cases that our firm is investigating, or if you think you have a potential class action claim, please contact us today.