Patt Morrison for April 28, 2011

Has a Supreme Court decision allowed corporations to end class action lawsuits as we know them?

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An AT&T tee marker.

In 2005 the California Supreme Court ruled on a class action lawsuit against AT&T brought by a couple from San Diego who wanted to recoup the $30 they were charged when they thought they were signing up for a free cell phone. The couple, Vincent & Liza Concepcion, tried to join a class-action suit against AT&T but were blocked by the company, saying that the cell service contract called for arbitration and forbid lawsuits over small amounts of money. The California Supreme Court ruled that companies should not be allowed to “deliberately cheat large numbers of consumers out of small amounts of money” by shielding themselves from being sued. Late on Tuesday the U.S. Supreme Court overturned that ruling, siding with AT&T and other large corporations that use arbitration as a way to settle these types of claims. The ramifications could be huge, taking away class action suits as a tool for consumers to fight corporations on questionable practices, like collected $30 in fees for an allegedly free cell phone. Does this mean the end of class action lawsuits?

Guests:

Deepak Gupta, staff attorney with Public Citizen; attorney representing the Concepcions before the U.S. Supreme Court

Alan Kaplinsky, partner & chair of the Consumer Financial Services Group at the law firm Ballard Spahr; he specializes in arbitration law


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