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Arbitration jiu-jitsu against AT&T Mobility?

In the wake of the wailing and moaning over AT&T Mobility v. Concepcion, I noted that the arbitration provision AT&T Mobility propounded was so consumer-friendly that consumers would invariably be individually better off arbitrating than as a class representative, much less as a class member. The lack of a class-action procedure would only adversely affect plaintiffs with meritless claims; those with meritorious common claims would find attorneys willing to bring en masse arbitrations.

As it turns out, the threshold of probability of success needed to profitably bring mass arbitration claims might be lower than even I imagined: entrepreneurial attorneys are recruiting AT&T Mobility customers to bring arbitration claims under the Clayton Act over the pending proposed merger with Sprint, using the arbitration provision's promise of a $10,000 bounty as enticement. (The attorneys are claiming a right to a 50% contingent fee plus expenses, so it's unclear how much of that will ever go to consumers.) Given that a Clayton Act plaintiff doesn't have to be an existing AT&T customer with an arbitration provision, it's clear that some plaintiffs' attorneys would prefer to arbitrate under AT&T Mobility's arbitration rules rather than litigate under the Federal Rules of Civil Procedure. But you won't hear Al Franken admit that. (h/t W.K.)

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.