Supreme Court Decision In AT&T Case Could Shut Down Many Class-Actions

When consumers brought a class-action privacy lawsuit against the Internet service provider Bresnan Communications for working with defunct behavioral targeting company NebuAd, Bresnan argued that the case should be dismissed because its agreement with subscribers included an arbitration clause.

U.S. District Court Judge Richard Cebull in Montana rejected Bresnan's argument on that point. He ruled that the term wasn't valid because it was presented to consumers "on a take-it-or-leave-it basis."

The judge might have decided differently had he waited until this week to make a decision. That's because today, the U.S. Supreme Court ruled that companies can enforce arbitration clauses that require consumers to bring cases individually to an arbitrator rather than participate in class-actions.

In the 5-4 decision, the Supreme Court ruled that consumers couldn't pursue a class-action against AT&T for allegedly advertising discounted cell phones and then charging tax on the full price. The case was brought by Vincent and Liza Concepcion, who sought to represent a class of people who had purchased the discounted devices.

Theoretically the Concepcions and other consumers can still pursue claims against service providers in arbitration. Realistically, however, clauses that prohibit class-action lawsuits will effectively prevent many people from suing -- as Justice Stephen Breyer said in a dissenting opinion. "In general agreements that forbid the consolidation of claims can lead small dollar claimants to abandon their claims rather than to litigate," he wrote. "What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?"

In class-actions, lawyers for successful plaintiffs are entitled to recover attorneys' fees that can reach millions, making it worthwhile for those lawyers to bring suit.

While the full impact of today's decision isn't yet known, it at least has the potential to squelch a great deal of litigation against broadband companies (and other service providers) on issues ranging from privacy to failure to deliver advertised Web speeds to throttling traffic.

2 comments about "Supreme Court Decision In AT&T Case Could Shut Down Many Class-Actions".
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  1. Thomas Siebert from BENEVOLENT PROPAGANDA, April 27, 2011 at 7:22 p.m.

    The Supreme Court has devolved into a blatantly partisan pro-Corporation, anti-individual, fascist-empowering bad joke. You can easily predict the result of every decision, along with who is going to vote how.

    "The Italian dictator Benito Mussolini defined fascism as the merger of the State and the Corporation. It is that social system in which the interests of the State and the corporations merge together This is the quintessential characteristic of a fascist state." -- Sardar Vazir Singh

  2. Paula Lynn from Who Else Unlimited, April 27, 2011 at 7:36 p.m.

    Wish you were wrong, Thomas, but we might as wish upon a star and put Jimminy Cricket on the Court. We are heading on a straight course to feudalism. For the people, by the people is more like for the 5 corporations, by the 5 justices. Not only are they the clergy of the 21st century for the U.S. (British History comes to mind plus the church hypocrasy throught he ages), but they are as mean spirited as a hairshirt.

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