The U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion1 has opened the door for a range of abuses. By ruling that the Federal Arbitration Act (FAA) preempts state unconscionability doctrines that would otherwise apply to contractual waivers of class action claims, the Court has shifted a small but significant area of contract law to favor corporations over consumers.
The decision arises out of a class action claim brought against AT&T, alleging that it was charging sales tax on phones that it advertised as “free.”2 The form contract that AT&T phone buyers signed included a boilerplate arbitration provision requiring that any claims under the contract be brought on an individual, not a class, basis.3
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