updated 03:20 pm EDT, Thu August 25, 2011
Customers forced to use arbitration for disputes
The Third US Circuit Court of Appeals in Philadelphia ruled late Wednesday that Verizon Wireless customers must use arbitration to resolve disputes over alleged fraudulently made telephone calls rather than resort to class action. In ruling this way, the court reversed itself on a decision it had made last year in favor of the customers. The court cited a recent Supreme Court decision as the basis for its shift in attitude.
The original ruling made by the Philadelphia court upheld a New Jersey Supreme Court decision that Verizon could not enforce a clause that most consumers agree to in their contracts. That clause required customers submit to arbitration to resolve disputes regarding administrative charges.
In April, the US Supreme Court ruled in favor of AT&T in a similar matter. In that case, by a 5-4 vote, the court overturned a decision in another class-action suit that AT&T couldn't enforce a contract provision requiring arbitration in its disputes.
Based on that ruling, the Philadelphia court revisited its decision in the class action suit brought against Verizon and subsequently ruled in favor of the wireless provider.