The Ninth Circuit Court recently set forth a ruling on an interesting case involving arbitration clauses in contracts. A couple received two complimentary cell phones from AT&T as part of a bundled-service contract but were charged $30.22 in sales tax required by California law.  As part of their contract, the couple agreed to arbitration.  As part of the arbitration clause AT&T agrees to pay $7500 plus fees if an arbitration award exceeds the amount last offered by AT&T before the settlement.  The couple claimed they were misled and filed a class-action law suit, despite their having signed the contract agreeing to arbitration.

The ruling by the Ninth Circuit, in Laster v AT&T Mobility LLC, called the contract unconscionable and refused to enforce the clause requiring arbitration.  The Court felt that such a clause, by disallowing class action, would result in little enforcement of contracts.  Because the amount involved is small, the individual customer would probably not find it worth the opportunity cost of their time to go to arbitration, and thus AT&T could default on lots of small contracts for minimal amounts and not fear an arbitration settlement.

There are a number of reasons why this ruling should be overturned.  First, it flies in the face of the Federal Arbitration Act of 1925, which was passed to provide certainty to contracts that have arbitration clauses.  The Act requires federal courts to enforce arbitration agreements unless they violate standard contract law doctrine, such as fraud, duress, or are unconscionable.  For a contract to be unconscionable, in this particular case, it must be seen as a scheme of the party in a stronger bargaining position to cheat large numbers of consumers.  The standard arbitration contract doesn’t meet any of these standards.

The contract with AT&T is clear.

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Sometimes being in the baby poo business means you just can’t win.

If your disposable diapers take too much room in landfills, environmentalists boycott you.  If you update old diapers, a handful of parents complain about the new.  If a baby gets a diaper rash, trial lawyers target you.

Then they all come together in a perfect storm of consumer indignation and sue the disposable pants off you.

Parents have loved disposables since 1961, and market competition kept improvements like self-sticking tape, elastic waistbands, skin protectants and anti-microbial agents coming regularly.  New fibers made diapers lighter, more absorbent and landfill-friendlier.  Potty training?  Disposable training pants.

As parents (figuratively) rejoiced in their disposables, they held no interest for trial lawyers — until Pampers introduced new “Dry Max” Cruisers.

Goods manufacturers anticipate complaints after any product change or improvement.  When Pampers introduced new Cruisers in Fall 2008 with no accompanying marketing campaign, complaint levels remained static.  But after converting its packaging and announcing the change in late 2009, objections flew immediately.

In late November, Twitter and Facebook pages were created by a mom complaining the new diapers weren’t as good as the old, and Pampers should have instituted a more vigorous campaign to announce the change.  The “Bring back the old Cruisers” campaign was born.

The mom complained in the same vein until February 9, 2010 when she posted, “do you think pampers (sic) violated consumer rights when they switched diapers without fair advertising or marketing?  Is (Pampers) guilty of this?”

Then on April 7, the first diaper rash reference magically appeared.  Both sites eventually lurched into an aggressive discussion of serious rashes allegedly caused by the new Dry Max Cruisers.  Facebook members were advised “not to talk about how much we like other Pampers products” and admonished to only upload photos through site administrators.

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Yesterday, I had the opportunity to interview Congressman Steve King (R-Iowa) for my radio show, “The Ben Shapiro Show,” which broadcasts every Sunday 1-4 PM ET in Orlando, FL. The topic of Shirley Sherrod came up, and in particular, the topic of the so-called Pigford Farms settlement.

For background, the Pigford Farms case is a class-action lawsuit filed against the federal government on behalf of black farmers and black wannabe farmers, who say they were discriminated against in loan proceedings. The federal government settled Pigford Farms for an unbelievable $1.15 billion. An incredibly high percentage of those receiving awards under this settlement have done so fraudulently.

Shirley Sherrod was not only an initiator of the Pigford Farms case, she received a chunk of change for her company, New Communities, Inc. To be accurate, she received the largest chunk of change for New Communities — $13 million. New Communities was a bankrupt commune-type land trust held by Sherrod and her husband. She and her husband personally received $150,000 each to compensate them for “pain and suffering.”

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Hopefully by now you are aware that Senator Chris McDaniel and I have filed a citizens class action lawsuit against the PPACA, the liberty-robbing “Obamacare” statute, in the federal court for the Southern District of Mississippi.  Please see our prior article on this subject here. The response from liberty-loving Americans has been overwhelming — from Big Media, not so much.  I understand their disinterest, though, because really important things like the travails of a billionaire golfer takes up so much of their time.

That’s quite alright, because I would rather come directly to you to make important announcements like this:  Lt. Governor Phil Bryant has entered our class action lawsuit against the PPACA as an individual, private citizen.  He is serving as a Petitioner, and is the class representative for a uniquely important class:  employees of the State of Mississippi.

Lt. Governor Phil Bryant addresses crowd in Jackson, Mississippi

Why this new class is important.

Congress is now dictating what must be — and must not be — in your health insurance plan.  In other words, they are controlling the health insurance that your employer is offering you.  Socialism is defined as “government ownership or control of all the means of production (farms, factories, mines, and natural resources) and all the means of distribution (transportation, communications, and the instruments of commerce).”  Realize, “socialized medicine” is here, right now.  Even worse, by controlling what health insurance plans must be offered, Congress and the Executive branch are controlling your employer, and thus your employment.

Your liberty depends on the survival of your republic.  The PPACA is a direct attack on the republican form of government.

Every kid who’s ever put hand over heart and recited the Pledge of Allegiance knows that we live in a republic:  “I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.”

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What does the Persian Gulf emirate of Dubai and ACORN have in common?  Both of them have some bankers on Wall Street worried.  When brokers and traders returned to work after the Thanksgiving Holiday, the Dow Jones Industrial Average went on a wild rollercoaster ride dropping as much as 233 points during the trading session due to an announcement that Dubai would be rescheduling the repayment of $3.5 billion in bonds.  This unexpected announcement was not what Wall Street wanted to hear on Black Friday when retail sales were already down by 8% compared to the prior year and Cyber Monday sales were less than robust with individual online purchases being 2% less than they were last year.  All of this at a time when brokers, traders and economists across the country are watching to see if cash strapped consumers are going to bailout retailers from what is shaping up to be a dismal retail Christmas season.

It is understandable why Wall Street would be concerned about Dubai.  Why would they be concerned about ACORN?  On October 24, 2009, Biggovernment.com revealed that the San Diego office of ACORN dumped thousands of documents into a dumpster in advance of an investigation into the organizations activities by California Attorney General Jerry Brown.  I retrieved the documents from a shared public dumpster located behind the local ACORN office.  The documents that were retrieved filled the back of my Suburban.  Much of what was retrieved was truly trash, items such as banana peels, coffee grounds and marketing materials. After sorting through the documents, though, the 20,000 documents that were retained included sensitive personal information, financial records and documents outlining the internal and political workings of ACORN.  One of the documents obtained by Biggovernment.com shows that ACORN had business relationships with 28 major financial institutions for the purpose of assisting homeowners whose mortgages were in foreclosure.

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