Today's Guest Voice is Barbara O'Brien. She blogs at The Mahablog, Crooks and Liars, AlterNet, and elsewhere on the progressive political and health blogophere and has been a panelist at the Yearly Kos Convention and a featured guest blogger at the Take Back America Conference in Washington, DC. Her new blog is Politics of Mesothelioma.
Next time you open a new bank account, sign up for phone service, or buy a refrigerator, take a close look at the fine print of whatever sales agreement you sign. Very likely all that tiny little type will include a clause stating that you agree to settle any disputes about the product only through individual arbitration. This week the U.S. Supreme Court found that such contracts can stop consumers from joining class action suits if they are damaged by a product. And this means that if you think you�ve been ripped off � well, too bad. There�s little you�ll be able to do about it.
As explained in an earlier blog post, a �class action� suit is one in which many people who have suffered the same injury are plaintiffs in the same suit. For example, if 1000 people decide they�ve been overcharged by the same bank or injured by the same product, they can file one suit together instead of 1000 separate suits. Class action suits have drawbacks, also. For example, let�s say many former employees and customers of an asbestos manufacturer are suffering asbestos-related diseases, such as mesothelioma cancer, because of the company�s negligence. If the plaintiffs win, they all will receive the same amount of damages, even though some might be more injured than others. For these and other reasons, some people are better served by pursuing an individual suit rather than joining a class action suit.
But sometimes a class action suit is the only practical option. Many people who feel they have been damaged by a product or service don�t sue because the legal costs of a suit are more than the potential damage award. But if thousands of people come together as plaintiffs, a successful suit can recover at least some of what they had lost. Without class action, there is not much many consumers can do to when they feel ripped off.
The case the Supreme Court ruled on was AT&T Mobility v. Concepcion. The plaintiffs are a California couple who found they had been charged $30 in sales tax for a cell phone advertised as �free.� They filed a lawsuit seeking class action treatment, hoping that other people who had paid $30 for the �free� phone would join the suit.
But the cell phone company, AT&T, pointed out that the couple had signed a standard contract when they picked up their phone. And the standard contract contained the standard clause about private arbitration instead of class action suits.
Precedent established in California courts didn�t permit consumer arbitration agreements to disallow class action. So the lower courts refused to enforce the class action clause. But the U.S. Supreme Court reversed the lower courts, saying that the the Federal Arbitration Act (FAA) supersedes state laws and rulings that limit arbitration clauses.
What does this mean for you?
Nan Aron of the Alliance for Justice wrote,
�Almost all of us operate in a world filled with employment agreements or corporate contracts for things like cell phones, credit cards, or online accounts. But if at some point you discover you�ve been cheated or your civil rights have been violated, you�ll find that that you�ve signed away your ability to enter a courthouse to fight back. In this country, you can�t buy a cell phone or take a job without agreeing to disempower yourself.�
Most consumer contracts stipulate that if you have a beef with the company, you must submit to individual binding arbitration. �And who sets up the arbitration system?� Asks Aron. �Why, the corporation, of course!
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