In 1992, Vincent and Liza Concepcion bought an AT&T cell phone that was advertised as "free." But they were charged $30.22 sales tax on the value of the phone. They went to court in California as part of a class action suit, along with thousands of others. That's the benefit of a class action: Who would sue individually for $30?
But in the fine print in the contract, AT&T had stipulated that any disputes regarding the transaction had to be pursued individually through binding arbitration rather than as a class action. The state court ruled for the consumers. From the decision: “The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30.”
The decision was confirmed by the California Supreme Court, and was appealed to the Roberts Gang. Scalia wrote the 5-4 decision in favour of the corporation (surprise, surprise). Clarence Thomas wrote a concurring opinion that would have gone further.
The Alliance For Justice wrote:
"After today’s ruling, corporations will now be able to decide on their own which civil rights and consumer protections they want to obey, knowing that there will be no effective means available to their victims to find redress. By including fine-print provisions in consumer and employment contracts that compel binding arbitration and restrict the ability to file class-actions, the Court has ensured that victims of consumer abuse or civil rights violations will always be at a disadvantage in the fight for justice."
So besides the loss of $30 each, what was at stake here? Well, quite a lot. According to Ian Milhiser at ThinkProgress:
"After Concepcion, it is only a matter of time before nearly every credit card provider, cell phone company, mail-order business or even every potential employer requires anyone who wants to do business with them to first give up their right to file a class action."
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