The U.S. Supreme Court will decide if a class-action suit filed against DirecTV (NASDAQ: DTV) over early-termination charges will be subject to continued litigation or binding arbitration.
The court agreed to hear the case after a California appeals state court ruled that a clause in the satellite operator's subscriber contract made arbitration unenforceable. Subsequently, the Ninth U.S. Circuit Court of Appeals in San Francisco ruled that DirecTV could move forward with arbitration.
The High Court will review those decisions.
Corporations like DirecTV, of course, prefer resolving matters through arbitration, a process that significantly reduces litigation costs.
Plaintiffs, like the group of California consumers who have sued DirecTV, tend to believe that arbitration favors corporate interests.
Northern California residents Amy Imburgia and Kathy Greiner are the lead plaintiffs in the attempted class-action.
For its part, DirecTV claims that arbitration is compelled by an earlier Supreme Court decision, Concepcion vs. AT&T Corp. (NYSE: T).
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