The nation's highest court ruled 5-4 in AT&T's favor in a case over arbitration issues that is likely to have wide-ranging effects, SCOTUSBLOG.com said. The decision, written by conservative Justice Antonin Scalia, overturned an earlier ruling by the 9th U.S. Circuit Court of Appeals and returned it to the lower courts for further consideration.
AT&T successfully argued customer disputes about sales taxes it charges for so-called free cellphones should be settled individually through arbitration as set forth in customer contracts, not by disgruntled customers joining together as a class.
"First, the switch from bilateral to class arbitration sacrifices the principal advantage of arbitration -- its informality -- and makes the process slower, more costly and more likely to generate procedural morass than final judgment," Scalia wrote.
"Second, class arbitration requires procedural formality. We find it unlikely ... Congress meant to leave the disposition of these procedural requirements to an arbitrator.
"Third, class arbitration greatly increases risk to defendants. Faced with even a small chance of devastating loss, defendants will be pressured into settling questionable claims."
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