Judicial Activism Goes Unnoticed

Don't look now, America...but you've just lost the ability to form class-action suits.

The U.S. Supreme Court on Wednesday handed businesses such as AT&T Inc a major victory by upholding the use of arbitration for customer disputes rather than allowing claims to be brought together as a group.


By a 5-4 vote, the high court ruled that an AT&T unit could enforce a provision in its customer contracts requiring individual arbitration and preventing the pooling together of claims into a class-action lawsuit or class-wide arbitration.

The plaintiffs, Vincent and Liza Concepcion, filed their class-action lawsuit in 2006, claiming they were improperly charged about $30 in sales taxes on cellphones that the AT&T Mobility wireless unit had advertised as free.

AT&T, the No. 2 U.S. mobile service, was backed in the case by a number of other companies and by the U.S. Chamber of Commerce business group, while consumer and civil rights groups supported the California couple.

Companies generally prefer arbitration as a less expensive way of settling consumer disputes, as opposed to costly class actions, which allow customers to band together and can result in large monetary awards.

Customer arbitration agreements are widely used by cellphone carriers, cable providers, credit card companies, stock brokerage firms and other businesses.

Vanderbilt University law professor Brian Fitzpatrick said it may be the most important class action case ever decided by the Supreme Court.

"Because companies can ask all of their consumers, employees, and perhaps even shareholders to sign arbitration agreements, this decision has the potential to permit companies to escape class action liability in almost all of their activities," he said.

In other words, American companies are now scrambling to put arbitration clauses in everything they can involving either employees or customers, because doing so now completely absolves them from class-action suits according to this ruling.  The class-action suit, the little guy versus the big guy, has pretty much been permanently decided by the big guy.

Where's the Tea Party to tell us that our rights are being stolen by judicial activists?