Public Citizen

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By F. Paul Bland, Jr., senior attorney at Public Justice.

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The consumer and civil rights communities are closely watching AT&T Mobility v. Concepcion, a case that will be argued in the Supreme Court this November. The case could decide the fate of most consumer and employee class actions for years to come.

The Concepcion case involves the widespread corporate practice of using standard-form contract terms that purport to prevent consumers and employees from ever participating in class proceedings. Consumers and employees rarely have time to read the lengthy agreements companies send them, let alone the ability to understand their dense legalese. And even if they did, few consumers or employees could negotiate the contracts' terms.

Many federal and state courts have held such class-action bans unenforceable under state laws providing that contract terms that block individuals from enforcing their rights under consumer protection and civil rights laws. Hoping to sweep aside many of those cases, AT&T Mobility ("ATTM") has asked the Supreme Court to find that at least some of that state law is preempted by the Federal Arbitration Act ("FAA").

Class-action bans dramatically undermine enforcement of consumer- and employee-protection laws. In many circumstances, very few individuals would ever bring a claim (in court, or in a small claims court, or in arbitration) even when those laws are broken. Many people never realize when their rights are violated, for example, and many people do not have the knowledge or skills to begin to pursue a case to protect their rights. For those who know to seek out a lawyer, very few lawyers will handle cases that are quite small, and few if any lawyers will handle fairly complex cases that involve only a few thousand dollars. There are many situations where a case will either be handled on a class action basis or it will never be brought at all.

In the worst case scenario, Concepcion could wipe away the vast majority of consumer and employee class actions for years to come. But that result is far from inevitable. For one thing, ATTM submitted a narrow question in its petition for certiorari, and if the Court sticks to the question presented (as it should), then the decision should be limited. On the merits, if the Court agrees with the vast majority of lower courts, then the decision will change little. If the Court uses this case to grant the fondest wishes of some corporate lawyers for immunity, however, then this case could have the kind of impact on class actions that an asteroid landing in Mexico millions of years ago had on dinosaurs.