Wong signed a cell phone contract with T-Mobile. It contained an arbitration cla

Question

Wong signed a cell phone contract with T-Mobile. It contained an arbitration clause and a waiver of class action suits. He later filed a class action suit against T-Mobile alleging that the company overcharged for services in violation of the Michigan Consumer Protection Act. Wong’s damages were $19.74. However, when other T-Mobile users are included, the alleged amount that was improperly collected could be millions. T-Mobile asked the court to compel arbitration and not allow a class action because of the contract clause. Must Wong arbitrate his claim and thus be barred from bringing a class action?

Explanation / Answer

The class action waiver in case of T-Mobile contract may not be enforceable as the contract waives any class action suits, as mentioned in the question. Here the T-mobile may argue that class of action is not a substantive right but only a procedural one as against the arbitration that the contract mentions of, which is a faster and inexpensive way to seek a resolution to the issue. However, owing to the waiver of class action clause in the contract itself, T-mobile can cease the effective proof of Wong’s statutory rights under the Consumer protection act, thereby making it unenforceable. Also the court could deny the motion placed by Wong for arbitration in this regard.

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