AFJ is counting down the 10 worst decisions of the Corporate Court's 2010-11 term. Yesterday, we looked at one of the two worst, Wal-Mart v. Dukes, which allows corporations to discriminate as long as they do so on an enormous scale
In our tie for the #1 slot, this case has profound ramifications for the millions of Americans who have to sign contracts to get a job, or to buy a product or service.
Worst Decisions of the 2010-11 Corporate Court Term: #1 (tie) AT&T Mobility v. Concepcion
Giving Corporations a License to Steal
In a 5-4 vote, the Corporate Court majority enacted sweeping protections for corporate wrongdoers. Consumers could once band together to access justice in court when defrauded by corporations. After AT&T, each consumer will likely be forced to fight it out alone before a private arbitrator chosen by the company that cheated them. This divide-and-conquer strategy is favored by corporate scofflaws because they know isolated cases are often not worth bringing at all. A company may have reaped millions in ill-gotten gains, but what consumer would sue to regain damages like the $30.22 unlawfully charged to the Concepcións and other consumers in this case?
The majority achieved this radical result by transforming the 1925 Federal Arbitration
Act (FAA), which was enacted to protect arbitration among corporate equals, into one of big business’s most powerful shields against accountability. To activate the shield, corporate lawyers need only draft contracts that people must sign if they want to buy a product or service or get a job and which force consumers and employees into binding one-on-one arbitration when a dispute arises.
By re-writing an 86-year-old federal statute, five justices enabled AT&T to reap millions by advertising “free” cell phones to lure customers, unlawfully charging them a $30 sales tax, and hiding clauses in the service contract that forced consumers to waive their right to join a lawsuit with others defrauded in the same scheme.
California’s Supreme Court considered such adhesion contracts to be unconscionable, and struck them down. But where California judges saw injustice for consumers, the five conservative justices of the Corporate Court saw only burdens on corporate defendants. Corporations will now be able to decide on their own which civil rights and consumer protections they want to obey, knowing that there will be no effective means available to their victims to obtain redress.
AT&T v. Concepción is tied for number one on AFJ’s Worst Decisions of the 2010-11 Corporate Court Term because nearly every aspect of Americans’ everyday lives is controlled by contracts that individuals must sign to get a job, or buy a product or service. After AT&T, these “license to steal” clauses will almost certainly appear with greater frequency.