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US Supreme Court says companies can force arbitration on class-acting consumers

Michael Gorman, @Numeson
April 28, 2011
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Before today, Californian consumers were free to ignore the arbitration clause tucked in the fine print of every AT&T service contract because state law had declared them unconscionable -- which kept the courthouse doors open to class-acting consumers. However, in a ruling that no doubt pleases AT&T and others of its ilk, the highest court in the land has stripped the states of their power to so avoid arbitration with its ruling in AT&T Mobility LLC v. Concepcion. In an opinion penned by Justice Scalia (pictured), the Supremes said that the Federal Arbitration Act was passed to promote arbitration's quick and easy dispute resolution, and they couldn't have California (or any other state) contradicting the will of Congress by allowing lengthy group litigation when parties already agreed to private arbitration. That means companies are free to force customers to arbitrate their claims individually instead of joining together to file high-dollar class-action lawsuits, no matter what state laws say. Guess those large-scale litigation lawyers will have to look elsewhere to find the funds for their next Ferrari.

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