AT&T Mobility v. Concepcion, which will be argued before the Supreme Court in November, is a case that "at first blush appears rather technical," hinging on a question of federal preemption. But "the stakes are high" in the case, explains Georgetown University Law Center professor Nina Pillard during an ACS panel, because the case has the potential to allow companies to ban class-actions in their standard-form contracts, thus eliminating the "classic way of enforcing rights that affect groups of people."
Pillard set the stage for a lively and impassioned debate about the case, which could have significant implications for consumer and civil rights.
AT&T's lawyers are arguing that California state courts have discriminated against arbitration clauses in holding that those that do not allow class actions are unconscionable, explained Stephen J. Ware, a law professor at the University of Kansas School of Law. This is a violation of the Federal Arbitration Act, a federal law that should trump state law, AT&T argues.
But F. Paul Bland Jr. said the case is absolutely not about arbitration clauses.
"The case is about whether AT&T can ban class actions," he said. " ... This case is about if you take a term, a ban on class actions, that is in a given case exculpatory, and you take it out of a general contract, and you put it in a contract term that has the label over it that says arbitration clause, does the phrase arbitration clause over the paragraph strike down the normal California rule against exculpatory clauses?"
Alan Kaplinsky, a partner at Ballard Spahr, said the statistics cited by some courts show that consumers do better with individual arbitration than with class cases, because they win more money, the cases take less time, and they are likely to receive attorneys' fees.
But Bland called a class action ban a "get out of jail free card" for corporations, who may be bilking 100,000 people out of $30, only 100 of whom pursue individual arbitration. By not allowing class actions, the company never has to pay the remaining 99,900 people, Bland explained.
Watch the full discussion below.