Concepcion v. AT&T – Here’s the Good News!

There’s been a lot of analysis of the disastrous impact of the Supreme Court’s 5 to 4 Concepcion v. AT&T decision yesterday (here is the 39-page opinion and here is Scotusblog), which allows corporations to ban class actions via what are now industry-wide, anti-consumer mandatory arbitration clauses.  The Court ruled that the Federal Arbitration Act barred states from protecting their own residents from these horrendous arbitration clauses.  Andrew Cohen at The Atlantic put it this way:

Suffice it to say that the Court's decision completely defies the very federalism principles which are so often articulated by the very conservative members who agreed Wednesday to strike down a state's effort to level the consumer playing field for millions of its residents. This is as big a pro-business, pro-corporate ruling as we've ever seen from the Roberts' Court -- and it will take explicit Congressional action to overturn it. 

That is just way too depressing, so we decided to search around for some good news in all of this.  First, we found a quote from corporate lawyer Sonya Winner at Covington & Burling, the law firm which used to funnel tobacco money into the "tort reform" movement and now houses the similarly anti-civil justice spokesperson, partner Phil Howard.  Yes, she says,

She spent the morning thinking about new strategies, including bringing arbitration back into matters where it was off the table. She estimated that about 80 percent of the matters she's worked on this week are affected by the new rule.  She doesn't expect this to be the end of class actions, though. ‘I didn't call the business committee to say I need a new practice area,’ she said with a laugh.”

 Oh ha ha.  The class action defense lawyers think they still have jobs!  But that’s something, right?

Then, there is Congress.  Once again, it’s their job to fix some terribly misguided thing that the Supreme Court did.  Unfortunately, Congress doesn’t have a great track record on that score.  They still haven’t fixed the Medtronic decision, where the Court immunized the medical device industry for implanting dangerous devices that kill or injure people.  But that effort didn’t have what this one does – Sen. Al Franken!

Luckily, Senator Franken, who actually has a great track record persuading Congress to outlaw unfair arbitration agreements, is taking the lead on this one, too.  Responding to yesterday's decision, “U.S. Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.) and Rep. Hank Johnson (D-Ga.) said today they plan to introduce legislation next week that would restore consumers' rights to seek justice in the courts. Their bill, called the Arbitration Fairness Act, would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and would allow consumers and workers to choose arbitration after a dispute occurred.”

And there’s even more good news!  Daniel Fischer for Forbes wrote this:

Contained within the sprawling law regulating the financial industry is Section 1028 ordering the new Consumer Financial Protection Bureau to study such arbitration agreements with an eye toward banning provisions it deems “anti-consumer.” Given acting CFPB Chair Elizabeth Warren’s views on the ability of consumers to understand complex financial agreements, it’s a safe bet the new agency won’t think highly of class-action waivers or binding arbitration agreements at all.

I’m feeling better already.

Comments

[Robert L Abell]

The Arbitration Fairness Act is needed to reverse this extremely pro-corporate decision by the Supreme Court. Federalism is a flexible concept, one that gives way when it poses potential liability and accountability to corporate interests.