The U.S. Supreme Court is scheduled to hear the case,"AT&T Mobility Services v. Concepcion" which, if decided the way many observers predict, could end class-action litigation in America as we know it," according to Vanderbilt law professor Brian Fitzpatrick.  According to the WSJ Law Blog, the professor did a nice job of laying out the rather complicated factual and legal issues in the case. 

    Details of the Case.   Vincent and Liza Concepcion sued AT&T for deceptive practices because the company allegedly advertised discounted cell phones but charged sales tax on the full retail price.  So the Concepcions sued on behalf of a class of consumers who also may have allegedly overpaid.  Yet, the contract with AT&T, as such contracts typically do, required all claims to be resolved through arbitration, and that the arbitration could not move forward as a class.  AT&T appealed, arguing that that the Federal Arbitration Act pre-empts state contract law and allows class-action exemptions when they’re combined with arbitration.

    Possible Consequences.   If the court goes down AT&T’s path, the consequences could be staggering - it could be the end of class action litigation, writes Prof. Fitzpatrick.  He added:

"[V]irtually all class actions today occur between parties who are in transactional relationships with one another: shareholders and corporations, consumers and merchants, employees and employers.  Because they are in transactional relationships, they are able to enter arbitration agreements with class action waivers.

Once given the green light, it is hard to imagine any company would not want its shareholders, consumers and employees to agree to such provisions.

Congress could, of course, overturn through legislation the effect of such a ruling.  But, Congress being Congress, that might not happen overnight.  So we’d be left, at least temporarily, with, in Fitzpatrick’s mind, a terrible mistake.  There is a reason we created the class action device 40 years ago: Sometimes businesses inflict injuries too small to sue over.  How many people will sue when someone cheats them out of $100?  How many lawyers will take a case worth $1,000?  Not many. But, if people don’t sue, businesses know they can cheat people out of small amounts with impunity.  

To access the story, click onto:   [ WSJournal "... Class Actions Lawsuits? 11/8 ]