AT&T loses appeal High court says company can't force arbitration

[jamesinca]

AT&T loses appeal
High court says company can't force arbitration

Bob Egelko, Chronicle Staff Writer Tuesday, October 7, 2003

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AT&T's 7 million California long-distance customers won the right to keep taking their complaints to court, instead of a secretive arbitration system, thanks to the U.S. Supreme Court, which rejected the company's appeal Monday.

The justices, without comment, denied review of a decision in February by the Ninth U.S. Circuit Court of Appeals in San Francisco that found AT&T's arbitration rules oppressive and unenforceable. The ruling upheld a magistrate's January 2002 decision that allowed California customers to sue AT&T in court with none of the restrictions the company sought to require.

It is one of several recent cases in which state and federal courts in California have overturned major companies' arbitration rules. The basis for those rulings is an August 2000 state Supreme Court decision that one-sided arbitration programs could not be imposed on consumers or employees.

AT&T, California's largest long-distance carrier, adopted mandatory arbitration in 2001 for its 60 million customers nationwide. Under the system, customers must refer all complaints to a panel of arbiters, whose rulings are nearly impossible to appeal.


http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/10/07/BUG9Q26KPL1.DTL

[jamesinca]

1. The rules of the ATT arbitration sucked

<SNIP>
The appeals court said arbitration standards were written in fine print in new contracts mailed by AT&T to California customers, were offered on a take-it-or-leave-it basis, and contained several unfair provisions, including:

-- A ban on class actions filed on behalf of multiple customers. The company decreed that arbitrators could consider only individual claims.

-- A rule that allowed victims of willful misconduct to collect damages only for the amount they were improperly charged for phone service and barred damages for additional losses and punitive damages.

-- A requirement that customers split the cost of arbitration with AT&T.

-- A secrecy clause banning customers, as well as the company, from publicly disclosing the existence or results of arbitration.

<SNIP>
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Hopefully other states will follow soon. This must be some of that unfriendly business atmosphere that is in CA that Arnold wants to get rid of.

[northernsoul]

4. good, too many corporations get away with this crap

They bury these adhesive arbitration clauses in the fine print with all the rules stacked in their favor and the consumer has little to no bargainning power. About time someone called 'em out on this.

"Unconscionably Adhesive" is the term they're teaching us here in law school.

[Gman]

2. T's history since divestiture is one of incredible stupidity

This is just another example. They don't have a clue that they are no longer the only phone company in town. They are notorious for slamming local service. They are notorious for slamming long distance. Why anyone would do business with T is beyond me.

[mumon]

3. MY AT&T rant...

They have got to be the quintessential f*cked up American company.

Those "rules" were just the tip of the iceberg; I have had personal experience with the "strategy" of AT&T since divestiture, and frankly, if capitalism can't deep-6 a company as badly run as AT&T, then we're better off with Communism.

AT&T makes most of its money doing what today, you may ask? Well, yes, they still do have a long distance service. That's about it. They also make money "selling" their name to: AT&T wireless (spun off long ago), AT&T cable (spun off long ago), AT&T "business systems" (wtf?), etc.


In business proceedings AT&T has been inflexible, technically myopic, arrogant, and completely divorced from any kind of "business" strategy. They famously killed several important technical standards simply because they didn't get their way. These standards were later done in other forums- with AT&T kept on the sidelines. They are seen as a disruptive force generally in these kinds of proceedings.

Their treatment of employees is, well, feces.

In short, they never got over the fact that they WERE divested in the first place.

[snooper2]

5. They sold off the cable internet piece...

To Comcast as you know, and that was the one of the only services bringing in money. International calling is one of the last things they make money on with a massive market share. They suck at everything else...

[mumon]

7. And they've been losing profitibility on that...

Ah, if I could only tell you more about AT&T...

[revcarol]

6. Can we start on the credit card companies now?

HUH? HUH?
Then on HMO's? HUH? HUH? Why should we have to arbitrate our health care?