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Supreme Court deals crushing blow to Americans

Statement by Deepak Gupta, Attorney, Public Citizen

This morning, the U.S. Supreme Court dealt a crushing blow to American consumers and employees, ruling that companies can ban class actions in the fine print of contracts.

Now, whenever you sign a contract to get a cell phone, open a bank account or take a job, you may be giving up your right to hold companies accountable for fraud, discrimination or other illegal practices.

In a 5-4 vote along the usual lines, the justices held that corporations may use arbitration clauses to cut off consumers and employees’ right to band together through class actions to hold corporations accountable.

Class actions are an essential tool for justice in our society. Brown v. Board of Education was a class action. The fate of class actions should not be decided through the fine print of take-it-or-leave-it contracts.

The court’s decision today turns the Federal Arbitration Act of 1925 – a law that was intended to facilitate private arbitration between sophisticated companies – into a shield against corporate accountability. The decision will make it harder for people with civil rights, labor, consumer and other kinds of claims that stem from corporate wrongdoing to join together to obtain their rightful compensation.

Public Citizen is committed to fighting against forced arbitration, which every day is used to deny justice to consumers and employees. We will continue to champion consumers’ rights in every branch of government. We will not give up.

Today’s decision makes it all the more essential for Congress to take up legislation ending forced arbitration in consumer and employment contracts.

Read more about this case.