Debate over consumer arbitration agreements is heating up with the approach of November 9, 2010, when the U.S. Supreme Court will hear oral arguments in AT&T Mobility LLC v. Concepcion.
The Court will decide whether the Federal Arbitration Act (FAA) preempts state court decisions holding that a class action waiver in a consumer arbitration agreement is unconscionable or otherwise violates state law—even when a class action is unnecessary to ensure that the consumer is able to vindicate his or her rights. Consumer advocates warn that an AT&T win would negatively affect consumer and civil rights.
Alan S. Kaplinsky, Chair of Ballard Spahr's Consumer Financial Services Group, disagreed with that position when he took part in a panel discussion on the topic earlier this week at an American Constitution Society event at The National Press Club. He reiterated his view in an American Banker article, "If AT&T Loses Case, So Do Consumers."
Mr. Kaplinsky and two other lawyers in his group argued in an amicus curiae brief filed with the Court on August 9, 2010, that the arbitration agreement used by AT&T Mobility, which provides for individual arbitration of disputes, is fully enforceable under the FAA, despite California's policy favoring class actions. (Click here to read more.)