U.S. Supreme Court hearing argument in case that could end consumer protections

Today, the U.S. Supreme hears oral argument in Concepcion v. AT&T Mobility. The issue–preemption under the Federal Arbitration Act–sounds technical and mind-numbingly boring.

While it looks boring, it’s an important case.  Maybe one of the most important in years.

Remember the terms and conditions or subscriber agreement or other agreement you signed or accepted when you signed up for cell service, cable TV, a bank account, a credit card or just about any of the other transactions consumers enter everyday? If you’re like 99.9 percent of all consumers, you don’t remember it all. Chances are you didn’t read the long and technical terms that appear as part of the transaction. You wanted to buy the goods, so you signed.

It’s very likely that the terms included a mandatory arbitration clause. The case focuses on whether that mandatory arbitration can prohibit class actions for consumers.

Some consumer problems involve big businesses engaging in small rip offs. We all know that a $10 rip off simply isn’t worth pursuing when doing so is expensive, timely and risky.  But what if that small rip off of $10 applies to all customers, say a million people? The business pockets $10 million illegally.

When you’re dealing with the nickel and dime consumer rip off, an individual consumer simply can’t obtain relief. One way consumers can fight back is through the consumer class action. The individual can’t bring a $10 case, but a class action allows consumers to chase the $10 million in illegally pocketed money, when a million consumers lose $10 each.

AT&T Mobility and their friends, Comcast and U.S. Chamber of Commerce, want that to change. They want a rule that allows companies to ban class actions and require you to take your case to arbitration as an individual. So that $10 rip off will never be remedied. And AT&T Mobility and its friends will be able to pocket and keep millions by only taking a small amount from each consumer.

The stakes only went up with the changes in Congress last week. If the Supreme Court incorrectly interprets a statute, like the Federal Arbitration Act, Congress can amend the statute to correct the error.  Sadly, consumers lost some of their best friends in Congress in the last election. So we should not count on Congress to bail out consumers if the Supreme Court sides with big business.

One of my favorite movies, The Life of Brian, ends with a great song, “Always Look on the Bright Side of Life.”

For now, I’m simply whistling that tune and hoping that things go okay. Guess we’ll deal with the carnage if the Court gives the Chamber of Commerce the victory it so badly wants.

Cheer up, Brian, it’s no bad.

Halliburton/KBR continue fight against rape victim Jaimie Leigh Jones

Sometimes the best legal advice to a recalcitrant client about their case is, “Stick a fork in it; it’s done.” And so it goes with KBR and the horrifying case of Jamie Leigh Jones.

When Ms. Jones claimed that she was drugged and raped while working in Iraq, KBR and Halliburton worked hard to keep her sexual assault case quiet by forcing it into mandatory arbitration. Fortunately, judicial wisdom prevailed, and KBR eventually lost the Jones case in the Fifth Circuit Court of Appeals.  And those who trail behind her have the benefit of Senator Franken’s great work in limiting mandatory arbitration for defense contractors.

But KBR is both angry and undeterred. As this this report explains, KBR now disputes Ms. Jones’ allegations that she was drugged and gang raped by co-workers. KBR reportedly made those points in its brief seeking U.S. Supreme Court review.

While Ms. Jones blew the whistle five years ago, KBR now says Ms. Jones fabricated her story. Odd if you think about it.  If KBR actually doubted Ms. Jones, wouldn’t they have taken that position years ago? And more to the point, given all the publicity over the rapes in Iraq, isn’t it fair to assume that they would want to fight this thing publicly and loudly?

I’ll admit to biases and a point of view. They come from two sources. First, I’m a father, a husband, a son and a brother. Every woman in my family has worked. When my wife and daughter go to work, I think it’s a modest demand that they not be subjected to sexual violence. Apart from that, I represent Oregon National Guard soldiers in unrelated litigation involving toxic exposures at Qarmat Ali. I am not intending to comment on that case–we’ll leave it to our proof.  Still, the KBR litigation posture is telling.

I suppose it’s just too much to demand that KBR simply accept that it lost and go to trial.  Owing to the genius of our founders, we have jury trials to allow impartial fact finders to decide cases. That right exists so that the Jaimie Leigh Jones’s of the world can force KBR to prove its defense or shut up.

David Sugerman