Today was Mother’s Day at the Levison Towers. I stopped at the car wash on my way to the office and chuckled at the desperation on the faces of the men, four deep in line, looking at Mother’s Day cards. I used to think that selling greeting cards at a car wash was a silly idea. In truth, it was genius.
When I got to the office I read about the United States Supreme Court’s most recent poke in the eye of American citizens. The case, AT&T vs. Concepcion, was decided on straight party, I mean ideological lines. The decision really means that we need to be careful what we sign.
First a bit of history. The United States is a republic of “sovereign” states. Federal law was intended to hold the states together and allow citizens to cross state lines with some expectation as to what the law would be when they got there. The overarching principle of American federalism is that rights not expressly delegated to the federal government are reserved to the states. The federal government is supposed to exercise a minimum of control on the states.
Contract law has historically been a matter for state determination. It was only when the states passed laws that reached past their borders that the federal government stepped in. Concepcion ignores that principle.
Class actions are suits where one victim’s damages are small and one victim alone could not afford to sue. The ill gotten gain obtained by a wrongdoer who injures thousands of such victims, however, is large enough that they should not escape justice. Class actions allow a victim to bring suit on behalf of himself or herself, as well as the other victims, so that the costs and recovery are shared by all who have been harmed, thus making litigation economically feasible and holding the wrongdoer accountable.
Every state has laws and rules that specify how class actions can be used in the courts of their state. You may have gotten a coupon in the mail for a discount on something you bought, and didn’t remember the purchase or any problem with the product.
This was likely the result of a class-action lawsuit brought by someone on their behalf, and yours. (There’s certainly an argument to be made that the class lawyers benefit most. That however, is a discussion for another day.)
Concepcion involved a cell phone contract. Unbeknownst to the cell phone subscriber, the contract contained a mandatory arbitration clause that barred class actions. In other words, by signing the contract he agreed to pay for and receive cell phone service. He also gave up his constitutional right to a jury trial, a right which is part of every state’s constitution.
Many states refuse to enforce contracts that are unfair. Since contract law is the province of the states, and the rules by which lawsuits can be brought in the courts of a particular state are also determined by that state, you would think the federal government would have no say in the matter. You would be wrong.
In the Concepcion case, the US Supreme Court just told those pesky states to knock it off. In Concepcion, the US Supreme Court said that arbitration agreements that go against state laws are still enforceable under federal law, even when the matter involves state law contracts. Make sense to you?
If your cell phone contract was like mine it contained tiny print and went on forever. Only a lawyer would read these contracts. Common sense tells us that buying cell phone service shouldn’t require surrender of our constitutional rights. Common sense and common law took a step backward for this decision.
We should’ve seen this coming. Just last year, the same Supreme Court declared multinational corporations have the same rights as human citizens, despite the fact that such business entities are organized by state laws and would not and could not exist without those laws, and which laws purported to limit the rights of those entities they created. Many were upset with this decision.
In retrospect, I would be ecstatic if we were on an equal plane. Instead, corporate America is immune from state law while American citizens are not.
I want to make clear Gentle Reader, that I am not anti-corporation. Some of my best friends are corporations. I live next to a lovely Corporation. It keeps its yard neat and brings casseroles to all of our block parties. Still, it would be nice if we were still equals in the eyes of the law.
How does all this heavy stuff relate to Mother’s Day? You and I (and presumably Supreme Court Justices) have mothers. Mothers teach us to play fair and that the rules apply to all of us. Too bad the Company didn’t get that guidance at birth. Or from the supreme Court of our land. I can only imagine what the next chapter will bring.
I found this language on the bottom of a credit card receipt:
By signing this receipt consumer (citizen of the state formerly known as a person) agrees to pay credit card company (hereinafter the Company) in full for the product or services received. Consumer agrees to submit to binding arbitration in the event of a dispute with the Company and acknowledges that the arbitrators will be chosen by the Company. Arbitrators may or may not follow state law, are not subject to review in the courts and can pretty much do what they want. If they want to continue to be arbitrators for the Company, they better decide things favorably for us, right?
In the event of a late payment, consumer understands that the Company is not going to be suing them in state court but will instead ask the arbitrators to order consumer to pay us whatever we ask, whether or not we can prove it through what used to be called evidence. In addition Company reserves the right to, and you hereby agree that we may, come root through your sock drawer for the dough.
I shudder to think what High Court ruling this little ditty will bring forth.
©2011 under analysis llc. under analysis is a nationally syndicated column of the Levison Group. He makes a darn fine casserole, and tries to play fair even when folks aren’t watching. Spencer Farris is the founding partner of The S.E. Farris Law Firm in St Louis, Missouri. Comments or criticisms about this column may be sent c/o this newspaper or directly to the Levison Group via email at comments@levisongroup.com.