You might want to start reading the fine print when you open a bank account, buy a car or a refrigerator, or sign up for cellphone or cable TV service.
If you have a dispute with the company, the U.S. Supreme Court just made it near impossible for you to join other aggrieved consumers to get relief.
In a 5-4 ruling Wednesday in a California case, the high court said that clauses in contracts in which consumers agree to arbitration block them from later joining class-action lawsuits.
These are claims, often over relatively small amounts of money, that many individuals won't bother to pursue, but that when spread out over thousands or even millions of customers in the same situation can add up to big bucks.
The decision, continuing the corporate bent of the court majority led by Chief Justice John Roberts, said that federal arbitration law supersedes laws or rulings in California and other states that limit arbitration clauses.
In the case before the court, a Southern California couple sued AT&T over a cellphone that was advertised as free, but came with $30.22 in hidden charges. AT&T tried to quash the suit by pointing to an arbitration clause in the contract. Lower federal courts allowed the suit to proceed, citing a 2005 California Supreme Court ruling that companies should not be allowed to "deliberately cheat large numbers of consumers out of small amounts of money." The nation's highest court overruled that decision.
This is a time for Congress to step in and make clear that the federal arbitration law, passed in 1925 to deal with disputes over rail and maritime shipments, should not cover the wide range of individual transactions in the 21st century economy. A bill to eliminate forced arbitration in consumer, employment and civil rights cases is to be introduced next week. Its prospects do not appear good, however, with the Republican majority in the House in the pocket of Big Business.
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