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What constitutional rights would you be willing to give up for the pleasure of owning an iPhone? You’d better be willing to give up the 7th Amendment.

The Supreme Court of the United States handed down yesterday its opinion in AT&T v. Concepcion. The opinion drastically undercut states’ rights in favor of federal preemption protecting unconscionable terms in contracts of adhesion — contracts in which one side has unequal bargaining power and issues "take-it-or-leave-it" terms to to the other (for example, cell phone, rental car, airline, employment, movie ticket, amusement park, car purchase, cable TV, internet, insurance, computer software, web site, and other consumer contracts).

The AT&T v. Concepcion decision is seen by many as a license to steal for major US corporations. What recourse does one have if a company steals $1.00 from 10 million people? Or $25? Or $50? Or $500? As Justice Breyer wrote in his dissent:

What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?

The answer, quite plainly, is none. Who then is to uphold justice if corporations can simply contract away accountability and rule of law?

The case raises equally troubling federalism concerns and abandons key protections of states’ rights. Justice Breyer, dissenting (with internal citation omitted):

By using the words "save upon such grounds as exist at law or in equity for the revocation of any contract," Congress retained for the States an important role incident to agreements to arbitrate. Through those words Congress reiterated a basic federal idea that has long formed the nature of this Nation’s laws. We have often expressed this idea in opinions that set forth presumptions. But federalism is as much a question of deeds as words. It often takes the form of a concrete decision by this Court that respects the legitimacy of a State’s action in an individual case. Here, recognition of that federalist ideal, embodied in specific language in this particular statute, should lead us to uphold California’s law, not to strike it down. We do not honor federalist principles in their breach.

In response, Senators and Representatives announced plans to introduce the Arbitration Fairness Act that would restore consumers’ rights to seek justice in the courts. The bill would eliminate forced arbitration clauses in employment, consumer and civil rights cases, but would permit voluntary arbitration of such disputes if all parties agreed it was in their best interests. Said Representative Hank Johnson of Georgia:

Forced arbitration agreements undermine our indelible Constitutional right to trial by jury, benefiting powerful businesses at the expense of American consumers and workers. Americans with few choices in the marketplace may unknowingly cede their rights when they enter contracts to buy a home or cell phone, place a loved one in a nursing home, or start a new job. We must fight to defend our rights and re-empower consumers.

Here’s what others had to say about the decision:

[More on the importance of the 7th Amendment]

(c) Copyright 2011 Brett A. Emison

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