News Column

Supreme Court Moves Against Class Actions

April 27, 2011

Staff -- HispanicBusiness

Antonin Scalia
Antonin Scalia

The Supreme Court on Wednesday moved to prevent dissatisfied customers from banding together to sue large corporations, according to a report by the Los Angeles Times.

The justices, dividing among party lines, ruled 5-4 that companies can force customers into individual arbitration rather than join class-action lawsuits.

The case stems from a suit in which a California couple questioned a $30 charge for services by AT&T Mobility. California courts gave the couple a green light to join a class-action suit against the cellphone giant.

Speaking for the majority in AT&T Mobility v. Concepcion, Justice Antonin Scalia said companies can require customers to sign arbitration agreements, according to the Times.

Scalia said companies like arbitration because it is efficient and saves them money. "Arbitration is poorly suited to the higher stakes of class litigation," he said.

Speaking for the dissent, Justice Stephen G. Breyer said there was a reason California courts have allowed class-action lawsuits despite service agreements that deny customers the right to participate in them.

To disallow that right, Breyer said, would let a company "insulate" itself "from liability for its own frauds by deliberately cheating large numbers of consumers out of individually small sums of money."

Source: (c) 2011. All rights reserved.

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