The End of the Class Action Lawsuit?

Is corporate America punch drunk? It’s beginning to look that way.

Today the Supreme Court heard arguments from AT&T that, if they adopt, would grant corporations the right to prevent consumers from joining class-action lawsuits. The case has so far flown under the radar, but the ramifications are enormous.

AT&T wants the Court to adopt a ruling that would allow any business that issues a contract to consumers, including contracts for cellphones, cable TV, and even credit cards, from being barred as a matter of contract law, from joining in class-actions that allege, among other things, violations of consumer protection law.

And while AT&T doesn’t come right out and say so, the scope of the rule they are asking the Court to adopt would potentially also apply to employment agreements. This means those large class-action discrimination claims against retailers like WalMart and banking giants like Citigroup would become non-existent.

In many ways this is a stealth move in response to the growing pressure for Washington to beef up consumer protections across the board. If successful then corporate America will have effectively dismantled the final bit of offense that individual consumers have to protect themselves against abusive and predatory practices–the threat of large class-action damage awards and attorneys fees as punishment for bad behavior.

Let’s face it. Corporate America has shown time and time again that it is incapable of acting in a reasonable fashion, let alone one that does not at its core look to take advantage of individuals. And why should it–corporations are not moral actors like humans, despite whatever “rights” they’ve been granted by the courts. As a matter of public policy we cannot expect they will ever act in a way other than to maximize their profit margin. Indeed, making money for their shareholders is their only true legal duty, so in many ways this stab at undoing the class-action system should come as no surprise.

Should the Supreme Court allow this expansion of contract rights at the expense of individual Americans then the Roberts Court will truly have surpassed even the Lochner Court in its corporate activism and then Congress will have no choice but to take significant legislative steps to remedy this complete overreach by corporate America.

photo courtesy of Jeff Kubina via Flickr

Disclaimer: The views expressed above are solely those of the author and may not reflect those of
Care2, Inc., its employees or advertisers.

Teresa C.

2:46AM PST on Feb 6, 2012

Judging by it's past performance, the supreme court acts, and will probably continue to act for the good of it's masters--which certainly is NOT the American taxpayer!
IMO, anyone who really believes the supreme court will ever "take the high moral ground", and/or take the side of "truth, justice and the American way" is doomed to bitter disappointment...look to what they've done in the past!

send a green star

Barbara E.

7:15PM PST on Nov 21, 2010

Thanx for an informative article.

Dave T.

12:14AM PST on Nov 19, 2010

This is an important and significant heads up!

Past Member .

10:19AM PST on Nov 15, 2010

thanks, and everyone should read this one. it is critical to our diminishing freedoms! corporate america is too blinded by greed to police themselves. without the class action, the average person will have no such protections...

Jill B.

4:32PM PST on Nov 14, 2010

And once again capitalist aristocracy raises its sick little head from the antihills of the universe!

Morgan G.

4:47PM PST on Nov 11, 2010

Doug: Corporations (or more specifically, ONE corporation) ALREADY print our money. The US government no longer controls ANY paper money in this country. The Federal Reserve, a PRIVATE corporation, does that.

And all efforts to subject that corporation to a thorough and complete public audit of its operations to insure that it actually IS operating in the public interest have been rebuffed by its staunch defenders in Congress. And ... SURPRISE ... MOST of them were NOT Republicans. Start with good old Barney Frank.

Gayle J.

3:13PM PST on Nov 11, 2010

If only the Tea Party crowd would realize that they're not mad at the govt. but at the fact that the govt. has been taken over by the corporations and they're the ones taking away all our rights, then maybe we could all join together and really take our country back to the democracy it once was.

Doug D.

9:22PM PST on Nov 10, 2010

It won't be too long before the start printing money with "The United Corporations of America" on it. The corporations don't even bother trying to hide what they are doing anymore, as they know they've bought off enough politicians to know they'll get away with anything they do. Corporations now have more free speech than individuals, do not suffer punishment, and can't go to jail.

Tana W.

6:15PM PST on Nov 10, 2010

AT&T is the small potatoes in this issue. The true issue is that it means another right in a supposed democracy will soon be gone. This is how fascism comes about. Read history, because we are about ready to be doomed to repeat it. Don't only focus on Germany of the 30s, look at all governments. Germany is just one example, but very relevant to what's happening in this country today. Dig into the peoples' fears and hate, pound on it by charismatic speakers and bide your time, then strike. Sinclair Lewis said the when fascism comes to America, it will come wrapped in a cross and carrying a cross. Sound familiar?

Mary L.

5:49PM PST on Nov 10, 2010

Next I'm sure they'll be proposing a permanent identity mark to signify you belong to AT&T. Sounds like it's time to break up ma bell again. With a mother like that....