The Supreme Court today has handed corporations another major victory in their battle to screw individuals with impunity. In a 5-4 vote they have allowed corporations to force customers to use individual arbitration instead of class action suits.
This further erodes the ability of citizens to act collectively in their efforts to protect themselves from the actions of amoral corporations. It is similar in that regard to what we've recently seen happening to the rights of workers to bargain collectively.
The L.A. Times is reporting today that
The Supreme Court gave corporations a major win Wednesday, ruling in a 5-4 decision that companies can block their disgruntled customers from joining together in a class-action lawsuit.
What this opens up for corporations, of course, is the ability to play the numbers game, essentially screwing lots of people for relatively small amounts. Prevented from joining together as a "union" of wronged customers to sue the corporation, the individuals are stuck with having to battle the corporate lawyers on their own.
[A] practical ban on class action would be unfair to cheated consumers. Justice Stephen G. Breyer said the California courts had insisted on permitting class-action claims, despite arbitration clauses that forbade them. Otherwise, he said, it would allow a company to "insulate" itself "from liability for its own frauds by deliberately cheating large numbers of consumers out of individually small sums of money."
Breyer added that a ban on class actions would prevent lawyers from representing clients for small claims. "What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?" he wrote. Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan joined his dissent.
Writing in the San Francisco Chronicle last November, Vanderbilt Law Professor Brian Fitzpatrick not only predicts this decision but also that it spells the end for class-action suits.
Many observers believe the Supreme Court will agree with AT&T. The current court is very friendly to businesses, and there is nothing businesses would like more than to exempt themselves from class action proceedings.
If the Supreme Court decides to end class action litigation, no one is likely to resurrect it.
All of this would be a terrible mistake. There is a reason we created the class action device 40 years ago: Sometimes businesses inflict injuries too small to sue over. How many people will sue when someone cheats them out of $100? How many lawyers will take a case worth $1,000? Not many. But, if people don't sue, businesses know they can cheat people out of small amounts with impunity.
Class actions band individuals together so businesses cannot escape accountability, and they level the playing field of litigation by enabling plaintiffs to reap the same economies that defendants who face multiple suits can reap without class actions.