Today, the U.S. Supreme hears oral argument in Concepcion v. AT&T Mobility. The issue–preemption under the Federal Arbitration Act–sounds technical and mind-numbingly boring.
While it looks boring, it’s an important case. Maybe one of the most important in years.
Remember the terms and conditions or subscriber agreement or other agreement you signed or accepted when you signed up for cell service, cable TV, a bank account, a credit card or just about any of the other transactions consumers enter everyday? If you’re like 99.9 percent of all consumers, you don’t remember it all. Chances are you didn’t read the long and technical terms that appear as part of the transaction. You wanted to buy the goods, so you signed.
It’s very likely that the terms included a mandatory arbitration clause. The case focuses on whether that mandatory arbitration can prohibit class actions for consumers.
Some consumer problems involve big businesses engaging in small rip offs. We all know that a $10 rip off simply isn’t worth pursuing when doing so is expensive, timely and risky. But what if that small rip off of $10 applies to all customers, say a million people? The business pockets $10 million illegally.
When you’re dealing with the nickel and dime consumer rip off, an individual consumer simply can’t obtain relief. One way consumers can fight back is through the consumer class action. The individual can’t bring a $10 case, but a class action allows consumers to chase the $10 million in illegally pocketed money, when a million consumers lose $10 each.
AT&T Mobility and their friends, Comcast and U.S. Chamber of Commerce, want that to change. They want a rule that allows companies to ban class actions and require you to take your case to arbitration as an individual. So that $10 rip off will never be remedied. And AT&T Mobility and its friends will be able to pocket and keep millions by only taking a small amount from each consumer.
The stakes only went up with the changes in Congress last week. If the Supreme Court incorrectly interprets a statute, like the Federal Arbitration Act, Congress can amend the statute to correct the error. Sadly, consumers lost some of their best friends in Congress in the last election. So we should not count on Congress to bail out consumers if the Supreme Court sides with big business.
One of my favorite movies, The Life of Brian, ends with a great song, “Always Look on the Bright Side of Life.”
For now, I’m simply whistling that tune and hoping that things go okay. Guess we’ll deal with the carnage if the Court gives the Chamber of Commerce the victory it so badly wants.
Cheer up, Brian, it’s no bad.
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