In October 2010, LDF filed a friend-of-the-court brief in the U.S. Supreme Court in AT&T Mobility, LLC v. Vincent and Liza Concepcion. This case addresses the lawfulness of class-action bans. Corporations are increasingly using this novel type of contractual provision to bar individuals from filing class actions in any legal forum if they want to obtain a job, purchase a car, receive a loan, or enter into other transactions.
When Vincent and Liza Concepcion filed a class action challenging AT&T Mobility’s allegedly fraudulent practices, the company contended that its standard agreement with cell-phone users barred classwide proceedings. Applying ordinary California contract law, the U.S. Court of Appeals for the Ninth Circuit held that AT&T Mobility’s class-action ban was invalid because it insulates the company from the full scope of its potential liability. The Supreme Court has agreed to review this decision.
In its friend-of-the-court brief, LDF stresses the significant adverse implications of class-action bans for civil rights litigation. Thanks to notable class-action suits, such as Brown v. Board of Education and Griggs v. Duke Power Company, our nation has made significant progress toward the Constitutional aspiration of a “more perfect Union.” But class actions remain an indispensable tool for promoting equal opportunity. Class-action bans could prove extremely detrimental in many spheres where class actions have been successful over the past two decades in redressing civil rights violations. LDF’s brief illustrates this fact by surveying recent cases challenging discrimination by large employers, mortgage lenders, insurers, andvehicle financing companies.
Recognizing the important public interests served by class actions, courts have held that class-action bans are unenforceable under the generally applicable laws of California and at least nineteenth other states. Contrary to the claims of AT&T Mobility, neither the Federal Arbitration Act nor any other federal law prevents courts from invalidating class-action bans under ordinary state contract law principles. To the contrary, the Federal Rules of Civil Procedure, federal antidiscrimination statutes, and even the Supreme Court have all recognized the importance of class actions, especially in the civil rights context.