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Supreme Court got it right



Published: Wed, July 10, 2013 @ 12:00 a.m.

Supreme Court got it right

A group of recent decisions by the U. S. Supreme Court emanate from applying basic legal principles including, (1) an individual case and controversy (between party litigants) must be shown to confer jurisdiction upon a court: if not, no case, and (2) upholding the enforceability of the terms of a contract.

In the individual “case and controversy” cases the court denied class-action status (where plaintiff’s try to pool their claims into one big case) because even if they won, there is no acceptable way to determine damages to millions who would have been drawn into the class. In these types of cases, even if successful (usually settled) each member of the class typically receives far less than $100. One recent settlement paid out $8.35 to each plaintiff. This is big business for the legal community.

The “contract case” involved a group of merchants who contracted with American Express to use its credit and services. The contract contained an arbitration clause requiring any dispute be decided out of court via the arbitration process. The Supreme Court upheld the arbitration requirement and disallowed certification as a class action.

If every group of individuals who envision success in the courtroom through a class action lawsuit was permitted to proceed, not only the deep pocket targets would be unfairly damaged but more and more businesses would relocate to friendlier countries. Our highest corporate tax rates have already accelerated this trend.

The U.S. Constitution protects the freedom of individuals and others to enter into contracts.

It has been aptly said that the single most important reason the United States of America has led the world with unprecedented prosperity for the most people is the fact that the overwhelming majority of transactions (voluntary entered into agreements) proceed without coercion to completion. A voluntary exchange of money for goods and services yields a clearly moral result: reduction and even elimination of poverty and increased overall human well-being.

Critics of Supreme Court decisions are frequently justified, however limiting the recent deluge of class action lawsuits and requiring persons to adhere to their contractual agreements prevent both unwanted lawsuits and promote legitimate commerce.

Atty. Carl D. Rafoth, Youngstown


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