April 22, 2015 - The Supreme Court took up a class-action lawsuit against DirecTV. The suit was brought in California and calls into question early termination fees for customers who end their service prior to the agreed upon period. In brief order, the justices stated that they would need to come to a decision regarding whether or not the customer agreements between the company and their customers require private arbitration or a group lawsuit/court proceedings. They are determining how best to obtain a resolution to the dispute.
Plaintiffs would prefer a group lawsuit as they feel that conducting private arbitration behind closed doors would leave them at a disadvantage. Plaintiff counsel claims private arbitration is stacked in favor of the companies while businesses claim the process is an effective means by which litigation costs can be controlled and customer disputes can be resolved more efficiently.
In a string of cases, the Supreme Court has held that Congress sought to encourage arbitration in passing the Federal Arbitration Act.
DirecTV’s customer contract contains a clause that a California state appeals court stated made the arbitration clause unenforceable, but the Ninth U.S. Circuit Court of Appeals in San Francisco allowed that federal arbitration law enables DirecTV to move the dispute into arbitration.
The case will be heard in the fall of 2015.
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