Arbitration News

The Latest Version Of The Arbitration Agreement Sets Up A Three-Tiered System For Allocation Of Costs

If the customer’s claim is for less than $1,000, the customer must pay a fee of $25, and AT&T will pay the balance of administrative fees and costs. If the customer’s claim is between $1,000 and $75,000, then the customer must share in the costs of arbitration, but need pay no more than the equivalent court filing fee. And, if the claim is in excess of $75,000, then all administrative costs and expenses will be divided equally. The earlier versions had only a two-tiered system: $25 fee for claims under $1,000 and equal division of costs for claims above $1,000. AT&T initially petitioned to compel arbitration in the Meoli lawsuit and, after the Marlowe and Tucker lawsuits were filed, petitioned in those cases as well. AT&T further requested that any arbitration conducted be limited to arbitration of individual claims. Plaintiffs opposed the petition, arguing, that the arbitration clause was unconscionable in various particulars, including the ban on class-wide relief. The trial court rejected plaintiffs’ other arguments on the unconscionability of the arbitration clause , but the trial court agreed that the ban on class-wide arbitration is unconscionable and invalid under the Court of Appeal decision in Szetela, supra, 97 Cal.App.4th 1094. The court denied AT&T’s petition to compel arbitration. By way of dictum, the court noted that because the arbitration clause is not otherwise unconscionable, if Szetela were not to be followed, arbitration would be compelled on an individual basis and not as a class or representative claim. AT&T filed its notice of appeal from the order denying arbitration.
Meanwhile, two additional lawsuits were filed against AT&T challenging the early termination fee--one by Alan Cherrigan on behalf of himself and the general public under the UCL and the second by Jael Salas.

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	Did You Know?
	There is one drawback to arbitration. There are no guarantees that arbitration will be a fair process. Once a decision is rendered in a binding arbitration, the parties are generally stuck with that decision. Without the right to appeal, there is always the risk of being subject to the whims and prejudices of the arbitrator. Overall, this is probably the biggest drawback to the arbitration process.