IN A RULING filed Friday, the US 9th Circuit Court of Appeals found that AT&T Cingular can't enforce binding arbitration on its customers.
Arbitration clauses in contracts deprive consumers of access to courts of law to resolve their commercial disputes. Such imposed arbitration thus deprives consumers of many legal rights and safeguards they would otherwise have, such as the discovery process, taking depositions, subpoena of witnesses, expert opinions, motions, judges, jury trials, class actions, etc.
In the opinion, Judge Stephen Reinhardt wrote:
"In this case, we consider whether a class arbitration waiver in New Cingular Wireless Service Inc.'s standard contract for cellular phone services is unconscionable under California law, and whether the Federal Arbitration Act preempts a holding that the waiver is unenforceable. We hold that the waiver is unconscionable, and, thus, unenforceable, and that the invalidation of the contract provision is not preempted by the Federal Arbitration Act. Accordingly, we reverse the district court's order compelling arbitration."
The opinion is marked "for publication" which indicates that the appeals court intends this decision to set a precedent for similar cases that might arise in its jurisdiction, which covers most of the western US.
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