05/15/2011 08:07 pm ET | Updated Jul 15, 2011

Supreme Court Rules That Small Claims Cannot Be Pursued Against Big Corporations

In all fairness, that is not exactly what the Supreme Court actually ruled, but that certainly is the effect of the ruling. The Court held that a suit which involved individual claims of $30.22 against AT&T Mobility could not proceed as a class action because the claimants had each agreed to arbitrate any disputes with the company. In reality, absent the vehicle of a class action, no one was going to pursue a claim for $30.22. So in the face of the millions of arbitration clauses that appear in all types of purchase, licensing and similar agreements (unbeknownst to consumers) their chance of recovering small claims has been effectively barred. No individual is going to spend the time and money to pursue such a claim in arbitration.

Companies that do not have such clauses in their purchase or licensing agreements will certainly include them now. Raise your hand if you have ever read the agreement you sign with your telephone company or the licensing agreement you accept with your software. Consumers are totally at the mercy of the companies with whom they deal. Arbitration, indeed, makes good sense in many instances, but not where it is utilized to defeat claims, particularly such as the ones asserted here based upon fraud and false advertising.

There has been some valid criticism of past class action abuses, but the very purpose of class actions was to permit persons to join together in situations such as this in which their individual claims were not worth pursuing or it was too expensive or difficult to do so. Although I have no knowledge as to the merits of the claims asserted here, in rendering this decision, the Supreme Court has permitted alleged corporate fraud to go unheard and unpunished and, in turn, has silenced the voice of the consumer in the process.