May 17, 2011
Congress Must Undo Damage of U.S. Supreme Court’s Latest Anti-Consumer Decision
Statement of Public Citizen Attorney Deepak Gupta on the Introduction the Arbitration Fairness Act
Note: This statement was delivered at a press conference this morning.
I’d like to thank Sens. Al Franken (D-Minn.) and Richard Blumenthal (D-Conn.) and Rep. Hank Johnson (D-Ga.) for inviting me here this morning. My name is Deepak Gupta and I’m an attorney at Public Citizen. I argued before the U.S. Supreme Court on behalf of the consumers in AT&T v. Concepcion.
In Concepcion, the court ruled, 5-to-4, that companies may used forced arbitration clauses in their contracts with consumers and employees to ban class actions.
The court’s decision, by Justice Antonin Scalia, was handed down in the middle of a crowded news cycle – dominated by talk of the royal wedding, tornadoes, birth certificates and Osama bin Laden. And it involves seemingly abstract concepts – arbitration, class actions, pre-emption – that you may not think have much to do with your life.
But make no mistake. Concepcion will affect all of us. Most of us don’t know about forced arbitration clauses, but we’re confronted by them every day. Now, whenever you sign a contract to get a cellphone, open a bank account or take a job, you may be giving up the right to hold companies accountable for illegal practices.
The result will be more hidden fees and charges on your cellphone bill, more predatory lending, more discrimination – in short, a less just society.
Concepcion is just the latest in a string of unjust Supreme Court decisions on forced arbitration. In case after case, the court has stacked the deck against consumers and employees. Last year, for example, in a case called Rent-a-Center v. Jackson, the court said that companies can write their contracts so that the companies’ own arbitrator decides whether it’s fair to submit a case to that arbitrator.
It is now clear that a five-justice majority on the court is committed to turning the Federal Arbitration Act of 1925 – a law whose goal was to help facilitate voluntary arbitration between businesses – into a shield against corporate accountability.
Only Congress can step in and undo the damage. Only Congress can say to the Supreme Court: Enough is enough. Arbitration can be an acceptable alternative to the court system when it’s voluntary, but it should never be an excuse to use the fine print to block the courthouse doors.
Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.