Lieff Cabraser Heimann & Bernstein, LLP

Statement on the U.S. Supreme Court ruling in AT&T Mobility v. Concepcion

Elizabeth J. Cabraser of the national plaintiffs' law firm Lieff Cabraser Heimann & Bernstein, LLP, issued the following statement on the U.S. Supreme Court ruling in AT&T Mobility v. Concepcion:

"In its AT&T decision today, the Supreme Court approved forced arbitration clauses and class action waivers -- the small print tactic used by banks, credit card companies and service providers to prevent their customers from fighting back when products fail, hidden charges are imposed, and services are not as advertised. These companies can still choose to sue each other in court. They get to negotiate whether to arbitrate, but consumers no longer get that choice.

"Consumers need cost-effective access to the courts which only class actions provide.  Otherwise consumers are at the mercy of credit card companies and banks that see fraudulent accounting practices, overcharges and undisclosed fees as their entitlement. 'Opting out' of the credit system is not an option. Credit and debit cards are mandatory as many businesses no longer accept cash. America has a privately-run monetary system that today's U.S. Supreme Court decision immunizes from accountability."

As background, by a 5 to 4 decision, the U.S. Supreme Court in AT&T Mobility v. Concepcion gave corporations the power to force arbitration and class action bans in contracts on consumers.

• Liza and Vincent Concepcion sued AT&T in 2006, alleging that the wireless carrier defrauded millions of customers in California by advertising phones as “free,” then tacking on an undisclosed $30 charge for the phone.
• If multiplied across all AT&T customers, the $30 charge would amount to millions of dollars in allegedly wrongful gains.
• AT&T sought to dismiss the case by invoking a forced arbitration clause containing a class-action ban that it had placed in the Concepcion’s contract.
• Both the California District Court and the Ninth Circuit rejected AT&T’s request, holding that the class-action ban was unconscionable under California law because it would exculpate the company from accountability for wrongdoing.