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US Supreme Court imposes limits on class actions
Court Watch |
2011/04/28 06:19
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The Supreme Court on Wednesday limited the ability of people to combine forces and fight corporations together when they want to dispute contracts for cell phones, cable television and other services, a move consumer advocates called a crushing blow.
In a 5-4 ideological split, the high court's conservatives said businesses can block their customers from using class actions. The court said the federal arbitration law trumps state laws that invalidate contracts banning class actions.
The decision came in a dispute between AT&T Mobility and a California couple who objected to being charged around $30 in sales tax for what they were told was a free cell phone.
Businesses commonly require arbitration clauses in consumer contracts to protect them from facing their customers in court. The Supreme Court's decision means that corporations now won't need to worry about consumers, shareholders or even employees banding together and fighting them using lawsuits or arbitration, consumer groups said.
"Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold companies accountable for fraud, discrimination or other illegal practices," said Deepak Gupta, a Public Citizen lawyer who argued the case.
Sen. Patrick Leahy, D-Vt., chairman of the Senate Judiciary Committee, said the decision would hamper the rights of consumers to be protected by state laws.
"Class actions are an effective way to ensure consumer protection, but today's opinion by the Roberts court continued to move in a direction that undermines this access to justice for hard-working Americans," Leahy said.
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Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet. |
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