Companies can block customers’ class-action lawsuits, Supreme Court rules
Justices rule in a Southern California case that firms can force customers to arbitrate their complaints individually. The ruling is seen as a major victory for corporations.
By David G. Savage, Los Angeles Times
The Supreme Court dealt a blow to class-action lawsuits that involve small claims affecting thousands or even millions of people by ruling that corporations may use arbitration clauses to block dissatisfied consumers or disgruntled employees from joining together.
In a 5-4 decision, the justices said Wednesday the Federal Arbitration Act of 1925, originally aimed at disputes over maritime and rail shipments, trumps state laws and court rulings in California and about half the states that limit arbitration clauses deemed to be “unfair” to consumers.
The ruling was “the biggest ever” on class actions, said Vanderbilt University law professor Brian Fitzpatrick, an expert on such litigation.