Last modified: 7:58 AM Saturday, 14 January 2017

A foregone conclusion?

Batten down the hatches, American consumers: The Supreme Court® is about to decide the fate of class-action suits, and whether states can permit them. Currently, federal law mandates arbitration rather than such suits, but states are free to make their own laws on the subject. However, thanks to AT&T, states’ right to do this is now about to be reviewed by the most big-business-friendly, consumer-contumeliating Supreme Court in recent history.

Supreme Court 2010 a la NASCAR

Supreme Court 2010: Shall we call it NASCOURT?
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Why is this important, and what’s wrong with arbitration?

To answer this, we must step back in history to the early 1970s, when Ford Motors was manufacturing cars with a defective fuel system that exploded if rear-ended. To prevent this, the company would have had to perform modifications which would have cost $11 per vehicle. But ghoulish accountants at corporate headquarters performed a risk-benefit analysis, and found something interesting.

There had been a total, to date, of 180 deaths attributed to the defective cars. This led to legal costs to Ford of $49.5 million, while the necessary modifications would have cost $137 million. Based on this analysis, Ford chose not to repair the defect.

This and other such calculated abuses continued for years. In response, consumers’ counsel began making greater use of a more powerful deterrent to such conduct: the class-action suit. This was effective because it made it practical for large numbers of plaintiffs to exact substantial penalties from deep-pocketed defendants who would otherwise rely on per-case award limits and the impracticality for many consumers of filing suit and paying attorneys’ fees to minimize their potential practical liability.

Predictably, corporations soon found a device that they hoped would relieve them of this dire menace to their freedom of amorality: the contractual class-action waiver.

If citizens could be brought to sign a document surrendering their right to join a class-action suit and accepting arbitration in its stead, according to the corporate doctrine, businesses could indemnify themselves against such litigation and restore the efficacy of the risk-benefit analysis by which human life is evaluated in dollars. Of course, consumers would never choose to waive their rights; for this, collusion was necessary. Hence arose the “as-is” contract pushed by AT&T with the backing of the sinister U.S. Chamber of Commerce.

But such a contract stands only if the court recognizes the corporation’s claim that the potential plaintiff has waived his right to sue, and this is in contention. The right to sue, like certain other freedoms assured U.S. citizens, is commonly held to be inalienable: Like life and liberty, it cannot be given up “voluntarily.” This accords with the realistic understanding that the parties to a contract are often unequal. More often than not, the party surrendering his rights does so because he has no real choice.

This is the principle that I’m afraid the Supreme Court will now definitively set aside. This would hardly be unprecedented in that body’s history: Throughout the Gilded Age, the court was notorious for its ingenuity in finding ways to interpret the Fourteenth Amendment — written to protect the rights of minorities from being crushed by hostile local majorities — in favor of the rich and powerful. To achieve this monumental injustice, the court had only to accept a single fallacious assumption: that a tenant and landlord, for example, wielded equal power in signing a rental agreement, or that a family farmer entered a contract with a company that manufactured equipment he needed from a position of parity.

I therefore predict the worst: The Supreme Court will enable corporations to force us, through simple lack of choice, to sign away our sole real weapon against the risk-benefit analyses of the ghouls in accounting.

Originally published as a review of a Los Angeles Times article on Supreme Court testing of the right of class-action litigation.

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