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AT&T Mobility, LLC. v. Concepcion (U.S. Sup. Ct.)

On October 6, Constitutional Accountability Center filed a brief in one of the centerpiece cases of the Supreme Court's business-heavy docket, AT&T Mobility, LLC v. Concepcion. At issue in Concepcion was the fine print in contracts that AT&T required cell phone purchasers to sign that forced claims against the corporation into arbitration and also banned class actions. This fine print could effectively allow a corporation to get away with widespread financial fraud whenever individual damages to any one consumer are too small to be pursued. Based on state general contract law prohibiting "unconscionable" contracts, the lower federal court refused to enforce the class-action ban.

On April 27, 2011, the sharply divided Supreme Court handed down a 5-4 decision in favor of AT&T, overturning the lower court’s opinion. Ruling against their professed commitment to federalism -- and the Court’s strong pro-federalism leanings dating from (at least) the Rehnquist Court era -- the Court's conservative Justices decided to support a remarkable expansion of pro-corporate federal arbitration rules that help shield corporations from liability in federal and state courts. The conservative Justices ruled that state law in this case was preempted by the Federal Arbitration Act, even though the Act specifically preserves the applicability of "such grounds as exist at law or in equity for the revocation of any contract." As CAC explained in our brief, the Court's conclusion is contrary to both the text of the Act -- which expressly maintains a role for state law -- and the text of the Supremacy Clause.

Read our statement criticizing the decision here. For an in-depth analysis of our brief, visit our blog Text & History.