Washington Supreme Court says class-action waiver in consumer agreement can't be enforced

A cellular telephone company could not enforce an arbitration clause in its service agreements that prohibited class-wide relief when it was sued for overcharging its customers, the Washington Supreme Court has ruled in vacating an order compelling arbitration.

In another decision issued

Class-action waiver

In the first case, customers of Cingular Wireless filed a class action alleging that the company violated state consumer protection law by charging them between $1 and $40 per month for roaming fees and various hidden charges.

Cingular sought to compel arbitration pursuant to a clause in its standard customer service contract. The clause prohibited class actions and class arbitration.

The plaintiffs contended that the waiver was unconscionable under state law.

The court agreed, explaining that the state's consumer protection act "contemplates that individual consumers will act as 'private attorneys general,' harnessing individual interests in order to promote the public good. But by mandating that claims be pursued only on an individual basis, the class arbitration waiver undermines the legislature's intent that individual consumers act as private attorneys general by dramatically decreasing the possibility that they will be able to bring meritorious suits."