State Court Rulings Undercut Consumer Arbitration Clauses That Waive Class Actions

Article in the Wall Street Journal -- Recent Rulings Bolster the Case For Class Actions, by Nathan Koppel.  Here's an excerpt:

Widespread efforts by companies to prevent consumers from pursuing class-action suits against them are increasingly getting quashed by state courts.

The New Mexico Supreme Court last week followed several other state courts in holding that a consumer agreement prohibiting class-action suits violates that state's public policy and is "unconscionable." The case concerned Dell Inc.'s requirement that its customers pursue claims through arbitration, and on an individual basis only.

"The opportunity to seek class relief is of particular importance to the enforcement of consumer rights, because it provides a mechanism for the spreading of costs," the court ruled.

BGS