Corporate Legal Rights Grow As Courts Block Pro-Consumer Class Action Suits

http://www.alternet.org/story/155179/corporate_legal_rights_grow_as_courts_block_pro-consumer_class_action_suits/

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One year after a U.S. Supreme Court decision gave corporations free rein to block class action lawsuits, judges have used the decision to prevent at least 76 potential class-action suits from going forward, a new report by Public Citizen and the National Association of Consumer Advocates (NACA) has found.

The report, “Justice Denied,” tracks the anti-consumer effects of AT&T Mobility v. Concepcion, in which the Supreme Court ruled that corporations could block consumers’ rights to sue collectively—even in the 19 states that have laws protecting such rights.

What began as a dispute over $30 between Vincent and Liza Concepcion and AT&T has turned into a legal monster worth millions of dollars to corporate bottom lines. The corporate lawyers and the court put profits before people, and a year later, we are seeing the ripple effects, as people seeking fairness are losing their legal rights.

The report details three cases in which consumers have felt the direct impact of the ruling:

Class Actions Against Career Education Corporation (CEC). Before Concepcion, thousands of students collectively sued Career Education Corp., a company that owns a chain of for-profit culinary schools, for misrepresenting the potential earning power of its graduates. The misleading numbers enticed many students to enroll and thus take on debilitating student loans to finance their education. According to the lawsuits, students attending the schools typically emerged with debts in excess of $40,000 and were not able to obtain jobs that paid enough to provide a reasonable chance of repaying their loans. At the time of the lawsuits, CEC did not include a class-action ban in its contracts with students. The collective cases proceeded in court and resulted in payments of up to $20,000 per student. While these cases, filed before Concepcion, achieved a meaningful settlement, other cases are still pending. In a post-Concepcion era, however, students with similar collective claims may not be able to pursue redress because it would be too difficult to overcome the class-action ban the company now includes in its contracts.