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This Supreme Court Case Could Give Corporations Even More Power to Screw Consumers


Business  (tags: corruption, ethics, SupremeCourt, usa, abuse, americans, dishonesty, cover-up, crime, government, lies, marketing, money, dishonesty, corruption, business, consumers, corporate, cover-up )

JL
- 508 days ago - motherjones.com
On Wed, the SCOTUS will hear a case that has the potential to give big corporations free rein to write contracts that prevent consumers from ever holding them accountable for fraud, antitrust violations, or any other abuses of consumer& worker protection



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JL A. (272)
Friday March 1, 2013, 8:57 am


Mother Jones
This Supreme Court Case Could Give Corporations Even More Power to Screw Consumers
On Wednesday, the high court will hear arguments in a real David vs. Goliath case with important implications for consumers.

By Stephanie Mencimer | Tue Feb. 26, 2013 3:56 AM PST

On Wednesday, the US Supreme Court will hear a case that has the potential to give big corporations free rein to write contracts that prevent consumers from ever holding them accountable for fraud, antitrust violations, or any other abuses of consumer and worker protection laws now on the books. It's a case that hasn't gotten much attention, but should.

The case, Italian Color v. American Express, [1] was brought by a California Italian restaurant and a group of other small businesses that tried to sue the credit card behemoth for antitrust violations. They allege Amex used its monopoly power to force them to accept its bank-issued knock-off credit cards as a condition of taking regular, more elite American Express cards—and then charging them 30 percent higher fees for the privilege.

The small businesses claims were pretty small individually, not more than around $5,000 per shop. So, to make their case worth enough for a lawyer to take it, they banded together to file a class action on behalf of all small businesses affected by the practice. In response, Amex invoked the small print in its contract with them: a clause that not only banned the companies from suing individually but also prevented them from bringing a class action. Instead, Amex insisted the contract required each little businesses to submit to the decision of a private arbitrator paid by Amex, and individually press their claims. (Arbitration is heavily stacked in favor of the big companies, as you can read more about here [2] and here [3].)

The restaurants estimated, with good evidence, that because of the market research required to press an antitrust case, arbitration would cost each of them almost $1 million to collect a possible maximum of $38,000, making it impossible to bring their claims at all. After a lot of litigation, the little guys prevailed in the 2nd Circuit Court of Appeals, which found that the arbitration clause was unconscionable because it prevented the plaintiffs from having their claims heard in any forum. The court said the arbitration contract should be invalidated and that the class action should go forward in a regular courtroom. (Sonia Sotomayor sat on one of the appeals before heading to the high court and is recusing herself from the case as a result.) Now Amex is appealing and arguing that some of the high court's recent decisions in favor of big companies mean it has every right to use contracts to deprive the little guys of access to the legal system.

Consumer advocates are worried about how the court's going to decide this case. Under the leadership of Chief Justice John Roberts, the court has been especially amenable to the sorts of arguments Amex is making, and the results have been pretty damaging to consumers. The Alliance for Justice has a list here [4] of some of the types of cases that were thrown out after the court's last pro-business decision about mandatory arbitration [5], which allowed companies to use arbitration clauses to trump state consumer and worker protection laws. It's not pretty.

If the court rules in favor of Amex, big companies will essentially be able to immunize themselves from any legal accountability, simply by forcing customers and employees to sign a contract to get a job or a cellphone or a bank account. Civil and consumer rights laws will stay on the books, but big companies will be able to ignore them.
Source URL: http://www.motherjones.com/mojo/2013/02/supreme-court-hear-important-corporate-immunity-case

Links:
[1] http://www.scotusblog.com/?p=159807
[2] http://www.motherjones.com/politics/2008/03/have-you-signed-away-your-right-sue
[3] http://www.motherjones.com/politics/2007/11/suckers-wanted-how-car-dealers-and-other-businesses-are-taking-away-your-right-sue
[4] http://www.afj.org/connect-with-the-issues/the-corporate-court/att-aftermath-stories.pdf
[5] http://www.motherjones.com/politics/2010/11/att-concepcion-chamber-of-commerce
 

Michael Kirkby (83)
Friday March 1, 2013, 9:30 am
Let's hope for all of our sake that this class action is upheld by the courts. I got screwed by AMEX once and I swore that never again would I have an American Express card. I try hard to not buy anything from large corporations but it is hard to avoid and the alternatives are expensive. Good luck to the restaurateurs and all the other small businesses that would be affected by these giant bullies.
 

JL A. (272)
Friday March 1, 2013, 1:22 pm
You cannot currently send a star to Michael because you have done so within the last day
 

Roger Garin-michaud (61)
Friday March 1, 2013, 1:22 pm
noted, thanks !
 

Mike M. (55)
Friday March 1, 2013, 4:06 pm
The continuing theft and destruction of Americas 98%
 

JL A. (272)
Friday March 1, 2013, 4:08 pm
You are welcome Roger!
You cannot currently send a star to Mike because you have done so within the last day.
 

Angelika R. (146)
Friday March 1, 2013, 7:43 pm
Keeping my fingers crossed for this! Just too bad Ms Sotomayor cannot participate in the ruling! Thx.
BTW Amex is WIDELY AVOIDED over here, very unpopular and only for big businesses.
 

JL A. (272)
Friday March 1, 2013, 7:49 pm
You are welcome Angelika. You cannot currently send a star to Angelika because you have done so within the last day.
 

Sherri G. (111)
Friday March 1, 2013, 9:44 pm
Together we must do everything possible to STOP giving corporations more power. SCOTUS needs to hear from us. SCOTUS allowing corporations to be "individuals" erodes our democracy with the 1% being allowed to buy anything. Take away the true individual's power to sue when wronged takes away the 99% rights to fight. Don't let this happen CARE2.
 

TomCat S. (286)
Saturday March 2, 2013, 4:51 am
That is certainly the intent of the Fascist Five.
 

JL A. (272)
Saturday March 2, 2013, 5:45 am
Thank you for your heart-felt plea Sherri. You cannot currently send a star to Sherri because you have done so within the last day.
 
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