Supreme Court is out to Bankrupt Americans with this new law

Readers, a few days back, I wrote that Congress needed to repeal its 2005 bankruptcy legislation. Now, instead of seeing any reprieve from corporate misdeeds in contracting and over-the-phone agreements, the highest Court in America is stabbing us in the back. Outrageous. Get Congress back to work helping you and protecting us from civic fascism sponsored by corporations and U.S. Supreme Court Justices with their pockets and paid lunches funded by Corporate Powerhouses. Read the letter from Public Citizen on the recent case that affects every American.–KAS

http://eslkevin.wordpress.com/2011/04/25/high-time-to-repeal-the-%E2%80%9Cbankruptcy-abuse-prevention-and-consumer-protection-act-of-2005/

Kevin,

In a new ruling, the U.S. Supreme Court has allowed Big Business to deprive you of your best weapon to fight back if you are cheated or harmed by corporate wrongdoing.

The court’s 5-4 decision Wednesday in AT&T v. Concepcion — in which Public Citizen represented the plaintiffs — permits corporations to use consumer and employment contracts to take away your right to join class-action lawsuits.

If this sounds like something that matters only to lawyers, read on to learn just how much it matters to all of us.

You’ve likely entered into “agreements” with many corporations — maybe without even realizing it. When you bought a cell phone or rented a car. When you opened a bank account, got a credit card or refinanced your mortgage. When you saw a doctor or arranged medical care for a loved one. When you got hired at your job.

You didn’t get to negotiate the terms of these contracts. If you needed that phone or that job, you signed on the dotted line. And unless you’re a contracts attorney, you probably couldn’t make sense of all the legalese.

More and more, these contracts include what are known as binding mandatory arbitration clauses. The word “arbitration” may sound like a good thing: “Hey, let’s sit down and talk this out — nobody wants to go through a lawsuit.”

But in actuality, forced arbitration does not provide the protections of traditional trials, including the ability to gather information from corporate defendants. And the largest arbitration firms are heavily biased in favor of Big Business and against consumers.

The Supreme Court has ruled not only that corporations can force people into arbitration, but also that they can use arbitration clauses to deny those they harm the right join together to seek justice in a court of law.

Countless victims of corporate greed will be denied any redress whatsoever.

Big corporations, with their myopic focus on profits, too often cross the line into fraud, discrimination or other illegal practices — often against large groups of consumers or employees.

But an individual person who has suffered from corporate misconduct may not stand to gain enough to make it worth the time, effort and expense of suing a giant corporation.

Imagine your phone company illegally charges you and a million other customers $10 each. The company “earns” $10 million by repeating the same misdeed against many customers. Under the Supreme Court’s new ruling, the company can use an arbitration “agreement” to prohibit you from joining with any of those other customers to hold the company accountable.

Who has the time, money or expertise to challenge a huge corporation over $10, $100 or even $1,000?

This is why class actions are so important.

They give ordinary people with legitimate — if not necessarily highly lucrative — consumer, employment, civil rights and other claims that stem from corporate wrongdoing a way to work together so that they have a fighting chance to obtain justice against perpetrators with more money, more lawyers and more friends in high places.

But not anymore.

With this ruling, how can we prevent corporations from hiding behind legalese while they rip us off?

The most critical response is to pass legislation that would ban forced arbitration clauses — and therefore anything in those clauses that limits your rights.

In response to the Supreme Court’s ruling, Senator Al Franken, Senator Richard Blumenthal and Representative Hank Johnson announced their plan to reintroduce the Arbitration Fairness Act in Congress.

As Senator Franken noted, the Supreme Court decision “essentially insulates companies from liability when they defraud a large number of customers of a relatively small amount of money,” whereas his bill would allow consumers to continue to “play an important role in holding corporations accountable.”

Public Citizen has been working with Congress and the White House, mobilizing our grassroots activists, and leading coalition efforts to advance legislation to end forced arbitration.

Public Citizen has been fighting for and winning consumer protections for 40 years and counting. We are committed to ending forced arbitration and defending people’s right to have their day in court.

Please contribute today so that Public Citizen has the resources to keep standing up to corporate power.

Together, we will make progress.

Sincerely,

Robert Weissman
President, Public Citizen
P.S. To learn more about the Supreme Court ruling, visit our Consumer Law & Policy Blog.

pps. Help Public Citizen defend the rights of people against corporate abuse by contributing $20, $40, $100 or whatever you can today.