AT&T v. Concepcion: Consumers Lose Again
[T]he judiciary is beyond comparison the weakest of the three departments of power; that it can never attack with success either of the other two; and [ ] all possible care is requisite to enable it to defend itself against their attacks.
- Alexander Hamilton, Federalist No. 78
Although referred to as the “weakest branch” by Hamilton (as well as Montesquieu years earlier), the Supreme Court has flexed some muscle over the last decade. They elected a President (Bush v. Gore), infused corporations with full First Amendment rights akin to every American human being (Citizens United), and earlier this week denied consumers practical redress for corporate misconduct (AT&T v. Concepcion). And the Roberts Court is just getting started.
According to something called the Constitution, the federal judiciary is supposed to be a court of limited jurisdiction. Nevertheless, the most conservative members of that Court (Scalia, Alito, Thomas and Roberts), who claim to follow the "framers' intent" and rail derisively against so-called "legislating from the bench," do just that as they aggressively pursue a political agenda that would make even the U.S. Chamber of Commerce blush. Led by the Umpire in Chief Justice Roberts (who disingenuously claimed in his confirmation hearings to be limited in his capacity to merely "calling balls and strikes"), the Court, no matter the precedent or facts, and with no shame, finds a way to rule in favor of big business and in opposition to middle class consumers.
For an assessment of the legitimacy of Bush v. Gore, you’ll have to read the historians in a decade or two. As to voters and consumers who will now live under the ramifications of Citizens United and Concepcion, the legitimacy of those decisions will be questioned and tested. It is easy to see how the consequences of Concepcion in particular could grow virally to impact a range of products, causing consumers rich and poor alike to cry unfair. But the damage is done. The following example is hardly fanciful.
Let’s take an average American family: the Madisons. They make $45,000 per year and the last two years have been… well… a struggle. Despite losing a job (Mr. Madison was laid off from his state job as a Deputy Principal of the local high school because of budget cuts) they—like most American families—have a few cell phone accounts. (How can they not, what with the 24/7 multimedia blitz targeting 12 year olds?) Their account is coincidentally with AT&T. Let’s say, for argument’s sake, they pay $150/month. Last month, Mrs. Madison opens her bill online and the total is $200. She immediately feels that familiar wave of anxiety rising from her abdomen. An extra $50 is a lot of money, and what if it’s every month? Her immediate thought is that Son Madison has downloaded more pricey ringtones or the latest version of “Angry Birds” despite being warned not to.
She doesn’t see any such downloads, but she does notice at the bottom of her bill a notation: “SPC Data SCharge: $50.00”. Having no idea what that means, she immediately calls AT&T and after spelling her name seven times, listening to several ads and options to pay her bill, she is routed to a “customer care consultant”. He advises her that the surcharge is based on increased advertising costs associated with sponsorships of hip hop sensation Wale. “Wait, can you do that? That’s not in the contract.” Oh, we sent you something in the mail telling you… well… you have no contract. We can do whatever we want. Mrs. Madison, frustrated and angered, yells: “I’m going to sue you, this is so unfair. You can’t do this.”
Oh yes they can; in fact Mrs. Madison can’t sue AT&T because “she agreed to arbitration.” Arbitration, what’s that?
In the weeks that follow, the Madisons learn that proceeding with an arbitration, even by phone, will cost them at least $250 in fees (for filing) and no lawyer will take the case because they cannot bring a “class” claim and will be limited to a judgment of $50 representing the Madisons. If the Madisons win without an attorney, their victory (+$50) is actually a loss (-$250), so it’s a classic no-win situation for consumers.
Thanks to Justice Roberts and his crew, AT&T can earn—or steal—$50 from every one of its 10 million customers, and not one of them will have a practical redress. That’s $500 million ($50 X 10 million customers) out of the pockets of hardworking Americans. No wonder AT&T can pay their CEO, Mr. Stephenson, his $20 million salary. Perhaps the SPC Data SCharge is valid, but there is no recourse.
And folks, this is not just cell phones. Beleaguered consumers will be without recourse in connection with the purchase of a range of products: automobiles, computers and televisions, just to name a few. And services too: banking, moving, home improvements. No ability for your day in court. No ability to have a lawyer.
While on its face the Supreme Court’s decision in Concepcion may look like just another welcome effort to bash lawyers and, better yet, class action lawyers (the sharks to the sharks), it must instead be viewed beyond face value for what it really means for consumers.
Steven N. Berk has over twenty years of litigation experience spanning both the private and public sectors. His practice ranges from representing Fortune 500 Companies, to consumers. Steven is based in Washington, D.C. and founded Berk Law in May 2009....
