[Infowarrior] - Court says AT&T can't force arbitration

[Richard Forno]

Court says AT&T can't force arbitration

http://blog.seattlepi.nwsource.com/consumersmarts/archives/147348.asp

The Washington state Supreme Court on Thursday upheld an AT&T  
customer's right to file a class-action lawsuit against the company,  
saying the customer-service agreement stripped away some important  
consumer protections.

Michael McKee, of East Wenatchee, filed a class-action suit against  
AT&T, alleging it wrongly charged him and others for city utility  
surcharges and usurious late fees. McKee didn't think it was fair that  
he got charged a city-utility fee even though he lived outside city  
limits. Though the charges were small -- no more than $2 in any given  
month -- he noted that it added up after many years and many customers.

So McKee took his case to court. Meanwhile, AT&T argued that the  
dispute should be settled through arbitration, noting that McKee  
agreed to mandatory arbitration when he signed up for service in 2002.  
Such arbitration clauses are ubiquitous, and often consumers must  
agree to them as a condition of accepting a credit card, a cell phone  
or other services.

A Chelan County Superior Court found the dispute-resolution provision  
of AT&T's Consumer Services Agreement "unconscionable" and denied  
AT&T's motion to compel arbitration. AT&T appealed.

On Thursday, in an unanimous decision, the Supreme Court upheld the  
lower court's ruling. Justice Tom Chambers concludes:

     A&T's Consumer Services Agreement is substantively unconscionable  
and therefore unenforceable to the extent that it purports to waive  
the right to class actions, require confidentiality, shorten the  
Washington Consumer Protection Act statute of limitations, and limit  
availability of attorney fees.

     We emphasize that these provisions have nothing to do with  
arbitration. Arbitrators supervise class actions, conduct open  
hearings, apply appropriate statutes of limitations, and award  
compensatory and punitive damages, as well as attorney fees, where  
appropriate. Courts will not be easily deceived by attempts to  
unilaterally strip away consumer protections and remedies by efforts  
to cloak the waiver of important rights under an arbitration clause.

Read the Supreme Court opinion here (PDF).

http://blog.seattlepi.nwsource.com/consumersmarts/archives/147348.asp