The Leadership Conference on Civil and Human Rights

The Nation's Premier Civil and Human Rights Coalition

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The Nation's Premier Civil and Human Rights Coalition

Supreme Court Decision Limits Workers’ and Consumers’ Rights in Pursuit of Claims Against Corporations

May 3, 2011 - Posted by The Leadership Conference

Consumers’ and employees’ right to class action lawsuits has been limited by the recent Supreme Court case ruling, AT&T v. Concepcion.

The Supreme Court overturned a California court’s ruling that a clause in an AT&T cell-phone contract limiting consumers’ court complaints to arbitration—an alternative dispute resolution method to formal trials—did not meet the state’s basic standards of fairness. In a 5-4 decision that favored corporations’ interests, the Supreme Court ruled that California’s state law disparately affected arbitration proceedings, and subjected corporations to potentially large monetary claims which would pressure the defendants into settling. 

According to pro-consumer and workers’ rights advocacy groups, class-action suits are favorable for individual claims that are small in value but substantial when aggregated with others, while limiting complaints to arbitration can deter individuals from pursuing small claims. The decision will “make it difficult for consumers in resolving the typical disputes that they have with companies large and small,” said Michael Donovan, a lawyer in Philadelphia and co-author of an amicus brief filed on behalf of the plaintiffs.

In addition, the ruling in AT&T v. Concepcion may have serious consequences for workers facing discrimination, who often rely on class action suits to avoid system obstacles in the pursuit of fair litigation. The recent decision has ominous tones for the current Supreme Court case, Wal-Mart Stores Inc. v. Dukes, in which the court will determine whether class action suits can still be used to enforce Title VII protections against discrimination. Title VII of the Civil Rights Act of 1964 prohibits job discrimination on the basis of race, color, religion, sex, and national origin.

Class action suits have historically been a primary means by which to ensure that civil rights are enforced. The Leadership Conference on Civil and Human Rights supports the individual’s right to pursue judicial remedies and class-wide relief.

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