Supreme Court to Hear Oral Argument in Case Regarding Preservation of State Laws to Protect Consumers from Unfair Corporate Contracts

By Brooke Obie, Online Communications Director

Tomorrow’s oral argument in AT&T Mobility, LLC v. Concepcion will be a critical test for the Supreme Court in a case of significant importance to corporate America, employees and consumers.   Will the Court follow its federalism principles and allow state contract law to be enforced or will the Court’s demonstrated leanings toward the interests of corporate America lead them to cast those principles aside?

In Concepcion, AT&T seeks to overturn a state court ruling that prohibited the mobile phone company from using the fine print of its arbitration agreements with consumers and employees to ban class actions in the event of alleged corporate wrongdoing. (TheCalifornia court found the ban on class actions unconscionable because it could allow  corporations to commit widespread fraud or other harm  with no legal consequences because, individually, the damages from such misconduct are often too small to be pursued.) CAC’s brief in Concepcion follows up on our success in Wyeth v. Levine, an important preemption case from 2009 in which we helped achieve a major victory against unwarranted federal preemption of state remedies. Our brief in Concepcion demonstrates that AT&T’s argument that the Federal Arbitration Act (the federal statute that holds arbitration agreements enforceable) preempts state law is contrary to the both the text of the Act, which specifically preserves a role for state courts, and the text of the Constitution’s Supremacy Clause.

CAC President Doug Kendall has previously stated, Concepcion should be “an easy case”:
Concepcion should be an easy case,” Kendall said, “because state courts are vital in protecting the rights of American consumers, and the Federal Arbitration Act specifically preserves a critical role for state law.  No plausible reading of the text and history of the Constitution’s Supremacy Clause supports AT&T’s argument for broad preemption of state court rulings in this case.  A ruling for AT&T and the Chamber of Commerce in this case,” Kendall continued, “would only make it harder for Americans – consumers, injured people, employees, and those who have faced discrimination – to secure justice in the face of corporate misconduct.”
CAC’s Chief Counsel Elizabeth Wydra will be present at the hearing tomorrow, and will provide a recap of the arguments made.  Please stay tuned to Text & History for the latest updates on this case. It will be interesting to see how the pro-corporate leanings of the Roberts Court fair against the Court’s previous commitment to federalism and the rule of law.

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