Seven years ago, Consumer Watchdog’s legal team brought a class action lawsuit against DIRECTV on behalf of California customers who were charged unlawful early cancellation fees of up to $480 – often taken directly out of a consumer’s bank account or charged to a credit card without the customer’s permission. Next month, the U.S. Supreme Court will hold a hearing on DIRECTV's argument that the case should be thrown out. The company claims its customers agreed to resolve all disputes with the company through a one-on-one arbitration with a private firm, rather than through a class action in a court.
It's an odd argument for the company to make, since the customer contract that DIRECTV wrote specifically says that its provision requiring arbitration is “unenforceable” if “the law of your state” forbids the agreement’s prohibition on class actions. Under California law, such prohibitions on class actions are unlawful – which means that DIRECTV’s arbitration provision is unenforceable.
DIRECTV initially acknowledged in court that its arbitration clause did not apply to the lawsuit – but later changed its mind. After the California Superior Court and the Court of Appeal rejected DIRECTV's argument that the case should be dismissed, the company went to the U.S. Supreme Court, which agreed to review the case last year. The high court will hear the case on October 6, 2015.