US Supreme Court upholds arbitration clause waiving right to class actions in consumer contracts

Key Points:
The US Supreme Court has held that a class-action waiver in a consumer contract's arbitration clause is enforceable

The US Supreme Court has recently determined that class-action waivers in arbitration agreements are not necessarily unconscionable and hence unenforceable (AT& T Mobility LLC v Concepcion 563 U.S. (2011)).

The consumer contract and the arbitration clause

The Concepcions sued AT&T for false advertising and fraud when the company sought to charge them $30.22 in sales tax on the retail value of a phone that had been offered for "free".

When they joined their claim to a putative class action, AT&T sought to enforce an arbitration clause in the contract between the parties, which prohibited arbitrations in a class or representative capacity.