We just love the word unconscionable. You know who doesn’t love it? AT&T. Their mandatory binding arbitration clause was ruled unconscionable by the state Supreme Court of Washington, after AT&T tried to prevent a consumer who believed he was being systematically overcharged from filing a class action lawsuit.
So, why was this particular arbitration clause unconscionable, anyway? Groklaw says that it includes provisions that have nothing to do with the purpose of arbitration — such as the requirement for secrecy.
The court explains:
It forbids class actions and requires that all arbitrations be kept confidential. The agreement also states in relevant part that “[n]o dispute may be joined with another lawsuit, or in an arbitration with a dispute of any other person, or resolved on a class-wide basis,” and “[a]ny arbitration shall remain confidential. Neither you nor AT&T may disclose the existence, content, or results of any arbitration or award, except as may be required by law or to confirm and enforce an award.” CP at 718-19. The dispute resolution section also provides that any claim must be brought within two years and limits a consumer’s right to collect punitive damages and attorney fees.
They also added that AT&T just wasn’t fooling anyone by trying to hide a bunch of baloney in the arbitration agreement:
Limiting consumers’ rights to open hearings, shortening statutes of limitations, limiting damages, and awarding attorney fees have absolutely nothing to do with resolving a dispute by arbitration. Courts will not be so easily deceived by the unilateral stripping away of protections and remedies, merely because provisions are disguised as arbitration clauses.
AT&T EULA’s Terms Are Found “Unconscionable” – What Does That Mean? [Groklaw] (Thanks, tz!)
(Photo: Todd Kravos )