A divided Supreme Court, ruled on a 5-4 split decision along ideological lines, that corporations can enforce arbitration clauses to block dissatisfied customers from bring class-action lawsuits. Consumer rights advocates said this ruling would spell the end for small claims involving products or services. Other business lawyers said class-action claims rarely work to the benefit of consumers anyway.
The ruling was a result of a California lawsuit that involved cellphones, but it's impact is nationwide. In the case before the court, a Southern California couple complained about a $30 charge involving their purchase of cellphone service from AT&T Mobility. The California courts said they were entitled to join with others in bringing a class-action claim against the cellphone company.
But the Supreme Court reversed that decision Wednesday in AT&T Mobility vs. Concepcion. Justice Antonin Scalia said companies may require buyers to sign arbitration agreements, and those agreements may preclude class-action claims. Chief Justice John G. Roberts Jr. and Justices Anthony Kennedy, Clarence Thomas and Samuel A. Alito Jr. formed the majority.
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ProgramBusiness.com - Apr 28, 2011
Supreme Court Rules that Firms Can Block Customer Class-Action Suits
Los Angeles Times - Apr 28, 2011
Companies can block customers' class-action lawsuits, Supreme Court rules