Next week, AT&T Mobility vs. Concepcion will go before the U.S. Supreme Court. The court will decide whether or not companies can prevent customers participating in class action lawsuits, through specific contract clauses. According to David Lazarus of the Los Angeles Times, state courts throughout the country have declared the banning of class-action suits as “unconscionable and contrary to public policy.”
AT&T will argue that the Federal Arbitration Act of 1925 preempts those rulings. The act requires parties to resolve disputes through an arbitrator instead of the courts, if both sides agree to this beforehand—such as through a contract. Most service providers require their customers to agree to a non-negotiable contract before they can avail of a company’s services. An AT&T victory would force customers to seek reparation from businesses on an individual basis, which is especially hard for cases that involve small amounts.
Class action suits allow people with similar grievances to combine their efforts for redress. A customer may not think of pursuing a deserved $150 refund from a service provider, if he has to shoulder the legal costs himself. “Companies are afraid of class actions... this helps keep them honest” said Deepak Gupta, a lawyer from Public Citizen who will argue on the behalf of the Concepcions and other consumers.
Vincent and Liza Concepcion originally signed up for an AT&T wireless service that promised free cellphones, suing the telco back in 2006. They and other customers included in the suit allege that the phones actually included hidden charges.