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Supreme Court: AT&T Can Force Arbitration 415

Posted by timothy
from the anywhere-it-wants-to dept.
suraj.sun writes with this unhappy news, as reported by Ars Technica: "The Supreme Court on Wednesday ruled that AT&T — and indeed, any company — could block class-action suits arising from disputes with customers and instead force those customers into binding arbitration. The ruling reverses previous lower-court decisions that classified stipulations in AT&T's service contract which barred class arbitration as 'unconscionable.' ... In cases where an unfair practice affects large numbers of customers, AT&T or other companies could quietly settle a few individual claims instead of being faced with larger class-action settlements which might include punitive awards designed to discourage future bad practices."
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Supreme Court: AT&T Can Force Arbitration

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  • Oohh.. (Score:4, Insightful)

    by fuzzyfuzzyfungus (1223518) on Thursday April 28, 2011 @04:02PM (#35967810) Journal
    Mandatory corporate kangaroo courts! What could possibly go wrong?
  • Re:Common?? (Score:4, Insightful)

    by fuzzyfuzzyfungus (1223518) on Thursday April 28, 2011 @04:07PM (#35967886) Journal
    They certainly can try, apparently []. It sure is a good thing that we have arbitration clauses to prevent people gang-raped on the job from having the hassle of an actual trial, when they could simply have a closed-door proceeding run by somebody hired by their employer instead...
  • by rsilvergun (571051) on Thursday April 28, 2011 @04:07PM (#35967888)
    This is what 8 years of Bush bought us folks, a Supreme Court on the take (look it up, it's a fact that Clarance Thomas took bribes). Hopefully a few of 'em 'll retire while the Dems are in and Obama'll man up and put some liberals in.
  • by RightSaidFred99 (874576) on Thursday April 28, 2011 @04:07PM (#35967894)
    They're just a way for legal firms to make ridiculous amounts of money. They're an abomination.
  • by jfengel (409917) on Thursday April 28, 2011 @04:09PM (#35967926) Homepage Journal

    AT&T can only force arbitration if you agreed to it in your contract. Which you did. All major companies make it a condition of the sale.

    What the court decided is that you can't get out of your contractual agreement with a class-action suit.

    The unconscionable part here is the law that they're upholding, the Federal Arbitration Act [], which basically lets you give up your right to sue. You don't have to, but they don't have to give you the service, unless you agree to meet in a court of their choosing. Which, of course, they'll always require, as long as the law allows them to.

    That's been upheld before. This case is just deciding that the federal law trumps state anti-arbitration laws. I find it unconscionable in both cases, and "unconscionable" is supposed to be a way out of contracts, but the existence of the federal law and 5 Republican appointees on the Supreme Court says I'm wrong.

  • by dmgxmichael (1219692) on Thursday April 28, 2011 @04:14PM (#35967990) Homepage
    Justice Roberts once again proves his obedience to his corporate masters. Once upon a time the SCOTUS was seen as above such petty matters. Now it is clearly the pawn of the corporations - and this has been obvious ever since the ruling which allowed the corporations unlimited access to fund/bribe politicians.
  • Re:Lawyers (Score:5, Insightful)

    by fuzzyfuzzyfungus (1223518) on Thursday April 28, 2011 @04:16PM (#35968030) Journal
    The fun thing about arbitration is that and individual is likely to only be involved in one or two cases, if that. This makes them a poor "customer" of arbitration services. Large companies, on the other hand, might deal with hundreds or thousands of cases a year. Guess which side an arbiter hoping for future work might consider favoring...
  • by clang_jangle (975789) on Thursday April 28, 2011 @04:17PM (#35968054) Journal

    Hopefully a few of 'em 'll retire while the Dems are in and Obama'll man up and put some liberals in

    Do we even have any real Liberals left anywhere? Obama, Pelosi, Clinton, and their ilk are basically so centrist they're "Republican Lite". Surely I'm not the only left-leaning person who feels unrepresented. As far as that goes, the Republicans don't do a particularly good job at representing conservatives, either.

  • by Anonymous Coward on Thursday April 28, 2011 @04:19PM (#35968094)

    Yeah, just pick one of the zero phone companies that have no arbitration clause. What the heck do you need phone service for? Or natural gas, or electricity!

  • Yeah, sure. (Score:4, Insightful)

    by Cyberax (705495) on Thursday April 28, 2011 @04:21PM (#35968126)

    So next time you'll have a choice between two operators. Both of them will have 'mandatory arbitration' clause.

    Sure, no pressure. You can always move to another country, right?

  • Re:Lawyers (Score:5, Insightful)

    by shadowfaxcrx (1736978) on Thursday April 28, 2011 @04:21PM (#35968138)

    Class actions aren't intended to bring restitution to the victims of corporate malfeasance. They're intended to apply enough leverage to significantly punish the corporations. If you want restitution, file your own lawsuit. If you want to teach the corporation never to do that again, join the class action.

    Basically, in a class action, you've already been screwed, and there's no way to get unscrewed, but at least you can take down the SOB who screwed you.

  • by Maximum Prophet (716608) on Thursday April 28, 2011 @04:22PM (#35968140)

    No arbiter can be impartial. Their livelihood depends upon bias and outright prejudice (as in "pre-judging"). It is not an honorable profession.

    Like a judge appointed for life?

    Anyway, the state could set up their own arbitration board, and when a case comes up, they assign someone from the board. The companies would pay for the board, but they wouldn't have hiring and firing decisions. That would make it more impartial.

  • by Sonny Yatsen (603655) * on Thursday April 28, 2011 @04:26PM (#35968196) Journal

    Class action suits are good for one thing, though. Class action suits means that a firm doing something wrong will get punished with a hefty fine, especially if punitive damages are added in, which discourages them from continuing their wrongdoing.

    By contrast, arbitration claim means that individual claimants must make individual claims which is harder and results in fewer claims against the company, and thus a much lower payout.

    A company would much rather get 1000 people making individual arbitration claims and pay them 100 bucks each instead of a 10,000 people class action suit and pay out $5 million at once.

  • by Svartalf (2997) on Thursday April 28, 2011 @04:28PM (#35968226) Homepage

    Comparing "modern" Liberals or Conservatives, I find little different...

  • by StormReaver (59959) on Thursday April 28, 2011 @04:47PM (#35968550)

    Don't Supreme Court justices know the law anymore? This decision is so out in right field that it doesn't even pretend to be supported by law passed by Congress. Contracts used to be invalid if:

    1) They are so one-side as to be entirely unfair.
    2) They force one party into a position because there is no alternative (the offer you can't refuse).

    Carrier-forced arbitration meets both these points. Carriers, by the nature of their enormous power relative to consumers, will always win arbitration because the arbitrators are, for all practical purposes, on the carriers' payrolls. This is because carriers are repeat customers, whereas carrier customers are not. This severely biases the arbitrator in favor of the carriers. There is no easy way to make this even remotely fair to carrier customers. This, by itself, would be enough to nullify arbitration clauses in any sane country.

    Carrier customers have no choice but to have a phone of some sort. You just can't exist in most modern markets without the ability to communicate with other people. And all carriers have the same arbitration clause in their contract, so customers have no alternative. This should also, all by itself, be enough to nullify arbitration clauses in contracts in any sane country.

    Put these two things together, and it's clear that the Surpeme Court has no intention of applying the law. It seems that they don't even bother reading it anymore. They just want to apply their own sense of right and wrong as it aligns with their political philosophies. If we had a Constitutional Supreme Court, meaning a Supreme Court defined and authorized by our Constitution, prior to this ruling, it just evaporated.

  • by Anonymous Coward on Thursday April 28, 2011 @04:59PM (#35968730)

    Well, technically his wife accepts the bribes for him according to Wikipedia and pretty much every other news venue, to the tune of $686,589. As far as your suggestion that the Democratic party is the heir to the Confederacy try looking up "Southern Strategy", dog-whistle politics and the last 40 years of political history and come back to us with your report.

  • by cmholm (69081) <cmholm&mauiholm,org> on Thursday April 28, 2011 @05:01PM (#35968774) Homepage Journal

    Per Jeffrey Toobin, “in every major case since he became the nation’s seventeenth Chief Justice, Roberts has sided with the prosecution over the defendant, the state over the condemned, the executive branch over the legislative, and the corporate defendant over the individual plaintiff.” That’s conservative jurisprudence in a nutshell.

    As has become abundantly clear, "activist judges" are only a problem when their rulings don't fit the conservative POV.

  • by Anonymous Coward on Thursday April 28, 2011 @05:06PM (#35968846)

    It's a left wing interpretation of the money and gifts that both Thomas and his wife accept from conservative organizations and corporations. Thomas and his defenders don't consider them bribes because they both feel that he would continue ruling the way he does. But bribes aren't just about controlling individual decisions, they're about gaining access and being in a position to persuade and cajole. And anyone who doesn't believe that doing such is effective, and anyone who thinks they're somehow immune to such entreaties, is an idiot.

    That doesn't mean Thomas is actually breaking the law. It just means he's an idiot for defending the behavior. "But it's legal" is a defense, not an excuse.

  • Re:South Park (Score:2, Insightful)

    by tripleevenfall (1990004) on Thursday April 28, 2011 @05:31PM (#35969152)

    That's not the broadest definition that could be unreasonably imagined, we have a regime in the White House who thinks having some limited powers to regulate interstate commerce means they can force everyone to buy health insurance, as a cost of being alive.

  • Re:Lawyers (Score:4, Insightful)

    by drooling-dog (189103) on Thursday April 28, 2011 @05:36PM (#35969206)

    The idea that you can "agree" to waive your right to legal recourse in a contract is a bit interesting, especially if you are required to do so as a condition of doing business with the other party. Is a contract really a contract if only one side is entitled to enforce it?

  • by nutshell42 (557890) on Thursday April 28, 2011 @05:40PM (#35969278) Journal
    Well, there's apparently enough difference that those "modern" Liberals voted against this fuck up in a 5:4 decision while the Conservatives thought it was only fair.

    It was the same 5:4 for the money=free speech fuck up and you can bet your ass that corporations are gonna use billions of free speech to convince you that there's no difference between Libs and Cons.

    Roberts+Alito always rule corporations>government>people, Thomas votes for whatever he thinks will piss off Democrats and Scalia goes by his conscience and strictly texturalist world view which, funny thing, just about always is the reactionary side. Kennedy is the "swing vote" but the swing is broken.

  • Re:South Park (Score:2, Insightful)

    by Anonymous Coward on Thursday April 28, 2011 @06:04PM (#35969552)

    Yeah! The democrats had unassailable majorities in both houses of congress, but it was the republicans who did it! And they were the ones who prevented the democrat supermajority from passing (or even writing) a budget. They have magical powers, those republicans....

  • Re:Oohh.. (Score:5, Insightful)

    by Paracelcus (151056) on Thursday April 28, 2011 @06:04PM (#35969554) Journal

    You really deserve to live in the (business friendly) USofA!

    Does anybody still buy into the big lie (land of the free) free what? for who?
    Next election day just stand outside the polling place and laugh!

    I'm even more disgusted than usual

  • by Hatta (162192) on Thursday April 28, 2011 @06:43PM (#35969926) Journal

    Are you just noticing this? There hasn't been a serious leftist or even progressive candidate in my lifetime.

  • by Anonymous Coward on Thursday April 28, 2011 @07:27PM (#35970270)

    This is the kind of thing the Civil War was really about.

  • by causality (777677) on Thursday April 28, 2011 @08:02PM (#35970502)

    OK, so in arbitration, I get my sales tax back.

    In a class action lawsuit, if I'm the lucky first guy to file, I might get a couple G's to serve as lead plaintiff, the lawyers make tens of millions of dollars, and everyone else gets a coupon for $10 off their next phone.

    How much did I really lose here?

    The question you pose is valid only if you believe the entire affair is all about your personal financial gain and how to maximize it.

  • by aussersterne (212916) on Thursday April 28, 2011 @08:11PM (#35970566) Homepage

    or would they like some more? After all, when barbecued poor person meat becomes popular, the rich and powerful will all leave if we don't give it to them, so we might as well skewer us some regular folks and start butchering for the Great Freedom Feast (by invitation only)!

  • by causality (777677) on Thursday April 28, 2011 @08:19PM (#35970604)

    That's strange, since the arbitrators have to be agreed to by both parties and very often are appointed by the court system (or approved by them). They, the arbitrators, get paid the same regardless of which side wins. Of course, the point of arbitration is to finds a solution that is palatable for both sides.

    The point was about who is paying the bill. The things you mention don't address this point. I don't know how to make that less ambiguous.

    Research the tendency yourself. Arbitration generally and overwhelmingly favors the party that's actually paying the arbitrators. I'm not talking about just a little bit, either. That's generally how business works -- the one paying the bill has the most say. It's just that in this particular business that tendency is undesirable.

    This can actually be a big benefit for the small guy. Many claims never get filed, because there isn't enough money involved to get an attorney interested. However, through arbitration, the small guy gets heard without having to go through the expense of long drawn out and expensive court proceedings.

    Did you ever wonder why it is AT&T that wants the ability to force arbitration and not a dissatisfied customer? To the point they went through the expense of paying attorneys to pursue the case through multiple appeals all the way to the Supreme Court? Does that tell you something?

    Did you suppose it was because AT&T is a charitable organization that wants the expenses of claims from as many little guys as possible? Or maybe in the back of your mind someplace did you consider that there might be another reason they want it so badly?

    I'm not trying to insult you but what you're saying is just naive.

  • by Darinbob (1142669) on Thursday April 28, 2011 @10:00PM (#35971106)

    Arbitration seems to be a way to guarantee that whoever has the deepest pockets will win. A long time ago I even gave up some stock options because I had to sign an arbitration agreement first with a clause that essentially said that if either party was unhappy with the solution they could demand a new arbitration with cost to be paid "equally". That is, the company with all the money keeps asking for new arbitration until I run out of money.

    An arbitration agreement is about giving up your legal rights in return for some minor momentary benefit.

  • Re:Oohh.. (Score:4, Insightful)

    by tmosley (996283) on Friday April 29, 2011 @08:17AM (#35973326)
    This is not the free market. This is fascism. Knowing the difference might just save your life one day.

Thus spake the master programmer: "When a program is being tested, it is too late to make design changes." -- Geoffrey James, "The Tao of Programming"