The Corporate Observer Blog : Consumer Protection, Corporate Abuse : Class Action Lawyer & Attorney : Steven Berk Law Firm

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[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.

At the heart of every conservative jurist's philosophy is the belief that the federal judiciary, based on the Constitution (and specifically the language of Article III), must remain a court of limited jurisdiction.  It is state courts and legislatures that are to be protected from the reach of the federal government and allowed, unfettered for the most part, to make the rules that guide our daily lives.  No jurist has been more articulate, consistent and of late, more successful in making this very point than Antonin Scalia, the author of the Concepcion decision.

But in the Court's latest smack in the face to millions of consumers who—for crying out loud—just bailed out the entire financial industry, the Court abandoned this bedrock philosophy to reach a result that (surprise, surprise) was lobbied for in amicus briefs by one leading corporation after another.  It's a veritable who's who of businesses and pro-business groups: the Chamber of Commerce; DirecTV, Comcast and Dell; the American Bankers Association, American Financial Services Association and Financial Services Roundtable.  Even Verizon wrote in to support their archrival's cause—because they too stood to gain by a ruling favoring AT&T.

To accomplish its work, the Court blithely explained away a recent decision of the California Supreme Court in favor of an 80-year-old law called the Federal Arbitration Act—which has nothing to do with the contract signed by the Concepcions.  Joined by his conservative "running buddies" (Justices Alito, Thomas, Kennedy and Chief Justice Roberts), Justice Scalia made life just a bit tougher on hardworking Americans by finding that a practice deemed "unconscionable" by the California Supreme Court was just fine.

While often claiming to follow the "framers' intent" and railing derisively against so-called "legislating from the bench," the Court is doing 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 claimed with "a wink and a nod" in his confirmation hearings to be seeking a position where he would merely be "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.  It was precisely what then-Junior Senator from Illinois Barack Obama feared when he voted against Chief Justice Roberts' nomination, presciently noting:

It is my personal estimation that he has far more often used his formidable skills on behalf of the strong in opposition of the weak.

Although subtle to most, the impact and consequences of Concepcion in particular could grow virally to impact a range of corporate conduct, causing consumers—rich and poor alike—to cry unfair.  The following example is hardly fanciful regarding the magnitude of the decision:

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 by the hours she spent to hear this callous explanation, 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 administrative costs) 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 100 million customers, and not one of them will have a practical redress.  That’s $5 billion ($50 X 100 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 to even scrutinize.

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 perhaps, 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.  Good luck and have a nice day.

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 for what it really means for consumers now and for a generation to come.