One thing is clear: individual consumers have no power to challenge illegal corporate behavior if they go it alone. Yet, one year ago, conservative members of the U.S. Supreme Court teamed up to issue a decision that required just that. In AT&T Mobility LLC v Concepcion, the Court majority upheld a class action ban in an arbitration clause imbedded in the small print of a cellphone contract.
Today, two influential groups issued a report taking a hard look at the effects of that court opinion. Public Citizen and the National Association of Consumer Advocates issued the seminal report, entitled "Justice Denied - One Year Later: The Harms to Consumers from the Supreme Court’s Concepcion Decision Are Plainly Evident" which you can read here. The consequences for consumers have been brutal; throughout the country the impact of Concepcion has left the civil justice system battered and bruised.
In a press release accompanying the report, co-author Christine Hines had this to say: “Class actions are indispensable for allowing consumers to seek redress when a company’s practices harm thousands of consumers, particularly when the harm results in a small-dollar loss for each consumer." The problem, she explained, is that, “Under Concepcion, those cases can’t go forward, leaving millions of consumers without a remedy for corporate wrongdoing.”
The new federal Consumer Financial Protection Bureau has begun studying the problem of forced arbitration in the consumer context, including the effect of arbitration class action bans. We will post information soon on how you can comment to the CFPB directly and have your views heard. Meanwhile, this report is the best way to become informed. Read it! Forced arbitration slams the courthouse door in the consumer's face. But when class actions are banned as well, that harms all consumers, not just those whose claims can't be heard in court. If corporations can use an arbitration clause as a "get-out-of-jail-free" card, there is no deterrent to illegal business practices that are highly profitable for the 1% at the expense of the other 99% - the consumer public.