NYT editorial: The Arbitration War

Unexpected wireless charges are a chronic affliction of life on the grid. The industry triggers more complaints from consumers than any other. AT&T Mobility, by consumer rankings, is the worst. Its performance in a case the Supreme Court heard recently has done nothing to improve that reputation.

This is the latest in the arbitration war — a battle over whether the United States will increasingly have a privatized system of justice that bars people from enforcing rights in court and, if so, what will be considered fair in that system. It would be grossly unfair for the court to let the corporation get away with what it wants to in AT&T Mobility v. Concepcion — a case that involves a small amount of money and a huge principle.

When Vincent and Liza Concepcion signed up for AT&T cellphone service, they received two new phones in exchange for making a two-year agreement. To their consternation, AT&T charged them $30.22 in sales tax for the phones. The Concepcions sued the company for fraud in Federal District Court and their case and another were consolidated as a class action.

Because of an arbitration clause in its customer agreement, AT&T insisted that the Concepcions had to submit their claim to individual arbitration. The federal district judge said no. The judge ruled that the agreement is “unconscionable” under California law — imposed by the company harshly, coerced and not consented to. The United States Court of Appeals for the Ninth Circuit forcefully upheld the decision.

(More here.)