In a series of rulings this year,the US Supreme Court has steered a consistent course against consumers or small businesses that want to bring class action lawsuits against corporate defendants. Comcast,Whirlpool and Sears Holdings Sears Roebuck & Co are among the companies that have benefited from the courts rulings in recent months.
American Express was the latest to benefit in a ruling on Thursday that marked the last Supreme Court class action ruling before the courts nine-month term ends next week. Out of a total of seven class action-related cases that the court took action on,only once did a defendant lose. Amgen lost in a case that experts say was limited to certain lawsuits involving shareholder claims against companies.
Class action lawsuits usually are driven by specialist plaintiffs lawyers,who file claims on behalf of groups of consumers over such issues as defective products and unfair business practices. In the Whirlpool and Sears cases,which are ongoing,the claims concern defective front-loading washing machines.
If successful,lawyers can make millions of dollars in legal fees. Individual plaintiffs generally recover much less,but supporters of the practice say it can be the only way consumers can pursue grievances against deep-pocketed companies.
The rulings over the current term often have shown the court to be divided along ideological lines and on occasion have prompted vociferous dissent from liberal members of the bench.
Justice Elena Kagan,one of the liberals,expressed her concerns about the trend on Thursday when the court ruled on a 5-3 vote in favour of American Express,saying that,in effect,the conservative majority doesnt ever see a class action case it likes.
To a hammer,everything looks like a nail, she said.
Lawyers representing plaintiffs in class action cases thought Kagan hit the nail on the head. I could not have put it better myself, said Deepak Gupta,one of the lawyers representing the small businesses that lost in the American Express case. The court ruled against merchants that challenged the legality of an arbitration clause in a contract with American Express that prevented them from coming together to pursue disputes against the credit card company.
The case rested in large part on to what extent class actions are affected by arbitration agreements that consumers or small businesses sign with a larger corporation. Those agreements can include language preventing claims from being litigated as a class.