A big shout out to the CEO and great protector of Corporate America — oops, I mean Chief Justice of the United States — John Roberts. Yep. Along with his floor mates, these fellas have crushed the rights of consumers this season (or term as they call it) going undefeated. At Roberts side is Antonin “Call me Nino” Scalia; Clarence “I never ask a question during oral argument” Thomas; the kid out of Hamilton Township, New Jersey, “I love big business more than Roberts and Scalia ever will,” swinging Sam Alito; and finally, Anthony “I play away from the basket because I’m afraid I’ll get smacked in the face” Kennedy.
In a huge blow out of consumer rights, the 2010 Supreme Court term saw these guys take away any meaningful right you have to file a lawsuit against your cell phone provider no matter how many drop calls you pay for or simply endure. It is gone. Poof. April 27, 2011, was the last day. It’s now open season, “Pillage me, oh Goddess of Verizon. Make me Sprint through a trail of hot coals and burning embers. You’re AT&T out of luck."
Here’s how this sinister game plan was put up on the chalkboard. It starts with the cell phone providers. We all get those little envelopes from our carriers, it’s now often in an email too. Most of the time, it’s a bill with about a dozen mysterious taxes, fees and charges that add up to real money every month. And sometimes, it’s not even a bill. It’s just four or five single-spaced pages of indecipherable small print, known euphemistically as a “disclosure.” It starts out friendly and all — “Dear Valued Customer,” or something — then deep in the fine print, they’ve added some new provisions to your agreement.
“Wait, don’t I have to sign something?” Nope, Justice Scalia and his boys took care of that several seasons ago. By using your phone, in fact, often by merely unwrapping the package it comes in, you’ve agreed to just about anything they add to your contract. (“Say it ain’t so, Catherine Zeta-Jones!”)
What has been added? Well it’s actually something that’s been taken away: your right to file a dispute in court. ("Cell phone owners, take the courthouse key off your key ring. You won’t be needing it any longer"). Like many employers and security broker-dealers, the cell phone companies now require that you bring your claims in a private arbitration proceeding.
So what? So what? Lawsuits are the great equalizer. In a court of law, consumers have a chance to identify, scrutinize and if skilled eliminate and curb bad corporate practices. Time and again over the past one hundred years, aided by the courts, consumers and employees have protected and strengthened their rights by availing themselves to the judiciary and the promise of justice.
Relegated to the more narrow constraints of a private (often confidential) arbitration proceeding, consumers rights are limited and getting more limited. Two critical concerns come to light. First, forcing arbitration eliminates a threat of a lawsuit, which is often more powerful than a suit itself. Main Streeters need all the help they can get against the multi-billion dollar conglomerates. Guess what? The threat is gone. Heck the next thing you know they will force you to stay in your contract despite awful service based on a termination fee that equals a month’s salary. (Oh, they already do that.)
Second, in April the Supreme Court, put on a full court press. In a case called AT&T vs. Concepcion, the Roberts 5 ruled that even within this limited forum of private arbitration you cannot bring your claim as part of class. In other words, trying to leverage the power of millions of consumers (indeed anymore than 2) is gone, history.
Is that a fair fight? In this corner we have AT&T, multi-billion dollar telecommunications giant; in the other corner, we have Natasha, one lone cell phone owner. Well, the Supreme Court has said it is fair; it is the law.
So back to those dropped calls. Those more than annoying daily occurrences. What can consumers do when the promises of Catherine Zeta Jones, the Verizon network, and AT&T’s slick new spinning globe don’t pan out? Instead you can’t get through a business call or birthday wishes with your Mom without a shut down.
First, a disclaimer: we are spoiled. We have more technology at our fingertips than ever in history, than ever imaginable. Do we recognize that cell phones do not perform perfectly? Of course they don’t. We do not expect Jack Bauer-esque smart phone service, downloading the bomb diffusing key in the baggage compartment of a jet at 30,000 feet. Of course not. As consumers, we expect to receive what has been promised and what is reasonable service. A dropped call here or there, no problem. A bad day, OK it happens. But to have every call you make “drop” once, twice, maybe even three times, is unacceptable.
A hypothetical: Let’s assume that AT&T has lousy, and I mean lousy, service in the Washington DC area (think every call you are on drops). Your neighbor, a former AT&T engineer, tells you this poor service is a result of AT&T lacking the network infrastructure to provide the service. And significantly, they know they have the confidential engineering and network studies in-hand. The report says it will take five more years to build out an adequate network. Do they disclose this inadequacy? Do they issue rebates? Hardly. They bury this information (a material omission) and to the contrary they keep on selling and keep on lying.
Try to file a lawsuit? Nope, remember, you agreed you would not. Not only will your lawsuit be dismissed; AT&T might seek sanctions against you. “Fine, I will file for arbitration, I can still do that right?” Well yes, but only individually. No class actions. Good luck getting a lawyer. AT&T owes you a couple hundred dollars for months where your service beyond awful, but you can’t find a lawyer to take on one of the world’s largest corporations for a $100 fee, particularly when the AT&T will be spending hundreds of thousands of dollars to defend itself.
And I’m here to report, we ain’t seen nothing yet. Get ready for a wave of new arbitration provisions blocking the courthouse steps for a wide array of consumer claims. This subtle yet often dispositive form of power will keep corporate profits and CEO salaries high at the cost of who else — the average consumer. It’s is just the way it was drawn up on the chalkboard.