Flickr photo by OZinOH
The U.S. Supreme Court may be about to take a bad situation for consumers and make it worse. In a case it recently agreed to hear called American Express Co. v. Italian Colors Restaurant, the court will again decide to what extent corporations can force consumers to sign away their right to access the courts. The decision will impact whether consumers will be able to go to court to enforce federal laws meant to protect them.
Under binding mandatory, or “forced” arbitration – the language in many employment and consumer contracts (think cell phone, credit card, checking account, e-commerce and cable contracts, to name a few) requiring consumers to resolve disputes in arbitration proceedings instead of in court – consumers are steered into a private, corporate-run system that lacks oversight and where none of the safeguards of our court system are guaranteed.
Forced arbitration has become a recurring topic at the High Court, and the pro-arbitration decisions have reinforced corporate power while diminishing consumers’ legal rights. Specifically, the court has expanded the meaning of a federal law, the Federal Arbitration Act (FAA), to broadly permit forced arbitration and restrict consumers’ and employees’ ability to sue a company for wrongdoing, individually or in a class action.
A recent decision, for example, was a severe blow to consumer rights. In AT&T Mobility v. Concepcion, the Supreme Court permitted businesses to include language in their consumer and employment contracts that would force consumers to resolve disputes with the respective business in individualized arbitration. Businesses could ban class actions. According to the court, the FAA trumped principles of California law that effectively had prohibited most bans on class actions in contracts.
usiness integrity, has taken exactly the right step. We additionally applaud the Department of Interior’s indications, in press reports, that it will block BP from new oil and natural gas leases on federal lands.
