Advocates: Consumers ‘betrayed’ by high court ruling on class-action suits, MSNBC, April 27, 2011, by Bob Sullivan, excerpt quoted verbatim:

Fine print in everyday consumer contracts can include provisions that require Americans to surrender their rights to file class-action lawsuits, the U.S Supreme Court ruled Wednesday, overturning a lower court ruling.

The ruling could have immediate impact on consumers’ ability to fight against companies when they feel their rights have been violated. It also raises questions about the future of class-action cases.

Consumer advocates roundly criticized the decision.

“(The ruling) is a devastating and far-reaching betrayal of the most fundamental principles of American justice,” said Nan Aron, president of the Alliance for Justice, a civil rights advocacy organization. “(The court) has effectively removed any incentive for corporations to behave within the law.”

When consumers sign up for everything from cell phone service to rental cars, terms of the contracts signed often compel them to forgo traditional legal mechanisms when a dispute arises, forcing them to mandatory binding arbitration instead. Such provisions have been struck down in many state cases as “unconscionable,” with various courts deciding consumers could not be compelled to surrender basic legal rights granted by the state. That is especially true in what are known as “contracts of adhesion” — standard form contracts offered on a “take it or leave it” basis, where consumers have little bargaining power, the courts have said.

Last year the U.S. Supreme Court agreed to review a case filed in a California federal court in which AT&T’s arbitration clause had been voided, a decision that was later upheld by a federal appeals court.

By a 5-4 margin, the Supreme Court overturned the appeals court ruling on Wednesday, with the majority essentially saying that federal law encouraging use of arbitration trumps state laws aimed at preserving consumer rights. ….

Read the full article, here.

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