AT&T Mobility LLC v. Concepcion: A Case About Consumer Rights

Can arbitration agreements preempt class actions?

by Bill Hogan, December 22, 2010 | Comments: 0

In AT&T Mobility LLC v. Concepcion, the Court is taking up the issue of forced-arbitration clauses, deciding whether federal law trumps state law when disputes arise. The plaintiffs in this case accuse the cell-phone provider of fraud for promising “free” cell phones and then charging for the tax on their retail value.

Listen to the Court’s oral arguments for AT&T Mobility v. Concepcion.

The company, citing an arbitration clause in the cell-phone contract, has argued that arbitration — not litigation — must be used to settle the dispute.

What’s at stake. Class-action procedures protect consumers who can’t head to court (or arbitration) on their own and are widely thought to deter marketplace abuses.

Where AARP stands. If AT&T Mobility prevails, AARP argues, “it will be a simple matter for businesses to prevent the effective enforcement of consumer rights.” Class-action litigation “levels the playing field in disputes between business and individual consumers," according to AARP, sometimes is “the only means by which consumers can vindicate their rights.”

First case: Will 26,000 plaintiffs in a suit over employee benefits have to prove harm individually?