WASHINGTON (CBS/AP) — The Supreme Court says satellite provider DirecTV can avoid a class action lawsuit in California over early termination fees and can force customers into private arbitration hearings instead.
The justices ruled 6-3 that DirecTV’s contracts specifically prohibit customers from banding together to sue the company.
Consumer Watchdog, an advocacy group based in Santa Monica, brought the suit in 2008 on behalf of customers who alleged that they were wrongly charged up to $480 after they moved and no longer had access to the satellite service after the equipment stopped working.
A California state appeals court ruled against DirecTV last year, saying that state law forbids agreements that waive customer’s rights to bring a class action. The state’s highest court affirmed.
But the Supreme Court said California law is pre-empted by the Federal Arbitration Act, which lets companies require customer disputes to be settled one by one in arbitration.
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