Legal and Ethics

1305 Words6 Pages
The AT&T v. Concepcion case involved a suit filed against AT&T for deceptive advertising. They had signed a contract with AT&T for the sale and servicing of cellular phones. The contract provided that in the event of consumer dispute, arbitration was the only option. AT&T compelled for arbitration which was denied by the district court and affirmed by the Ninth Circuit Court of Appeals. AT&T thus appealed to the Supreme Court. The Court’s 5-4 majority ruling held that the Federal Arbitration Act of 1925 (FAA) superseded state laws which prevents the making of contracts that do not allow class action.

In the AT&T v. Concepcion case, Vincent and Liza Concepcion purchased a cell phone and service plan from AT&T, for which they were told, was a “free” phone. Although the phone was advertised as free under the service contract, the Concepcions were required to pay sales tax based upon the retail value of the phone, a sum of $30.22. The Concepcions alleged AT&T provided false advertising and fraud by charging sales tax and thus, they filed suit against AT&T as a class action lawsuit.
Under the service contract agreement, AT&T contained an arbitration clause that required claims be brought in the parties’ “individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding” (..from the case..). According to the contract, this meant that the Concepcions had to bring their claim as an individual arbitration and not as a member of class. To “bring the action individually acted as a class action waiver,” which was “unconscionable” under the California law as articulated by the California Supreme Court in Discover Bank (source….). California law prohi...

... middle of paper ...

...ciples. Instead, greed, misconduct, and deceit continue to be exposed when profit maximization becomes the only goal of a company.

The ruling of the Concepcion case reveals that the law can be flawed and the courts can make poor decisions that are misguided and unfair to the public. Although the Concepcion case involved a minor fraud, it was disappointing that the Court did not acknowledge their right to fair trial for a legitimate suit. Instead, the ruling allows companies and businesses to continue to have binding contracts that prevents consumers and employees to file a class action lawsuit in handling disputes. In light of the Concepcion case, Congress should revisit the FAA laws as well as current consumer protection laws and put an end to forced arbitration in consumer disputes and restore the rights of citizens to use the courts to find justice.
Open Document