Business Bytes
Renee Oricchio

SCOTUS Backs AT&T: Everyone Loses

 

There's pro-business and then there's pro-oligarchy. Our current Supreme Court, I believe, has crossed that line. This just in, companies have a new loophole to block class action lawsuits and it is blessed by the highest court in the land. As for you and me, we're screwed!

AT&T Mobility LLC v. Concepcion will likely go down in infamy as one of the Supreme Court's biggest mulligans. In short, AT&T got sued in a class action lawsuit on behalf of its wireless customers for charging and collecting a sales tax on services that were advertised as free. Upon getting sued, AT&T demanded that the case be sent to binding arbitration instead per the fine print in its contract. Lower court after lower court ruled in favor of the customers recognizing that it was an "unconscionable" clause to begin with that violated the state's consumer protection laws.

The Federal Arbitration Act is not supposed to trump over laws (like a state's consumer protection laws, for example).

In a five to four ruling, the Supreme Court overturned all that citing among other things that the purpose of the FAA is to use arbitration to avoid long, nasty legal battles. The upshot: it's going to be much more difficult to take big business to task for practicing bad business. Individual lawsuits are a lot less likely to act as deterant for additional bad corporate citizenship. Sometimes it takes a class action lawsuit to get corporations to do the right thing.

This is a ruling that should not only concern the individual, but smaller businesses as well. The term pro-business may sound like music to the ears of most entrepreneurs and small business owners, but what about pro-big business?

Just last year, this same Supreme Court ruled that businesses can spend as much money as it wants to on lobbying and advertising for the purpose of bringing pressure to bear on our lawmakers and candidates up for election. Like this week's ruling, the organization with the deepest pockets gets another unfair advantage.

So much for "and justice for all."

Renee Oricchio is a technology writer and former supervising news producer for CNN Financial News. She has been covering the computer industry since 1987. @oricchio