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U.S. top court rules for DirecTV in arbitration case

By Lawrence Hurley
A DirecTV satellite dish is seen on a residential home in Encinitas, California November 5, 2014. REUTERS/Mike Blake

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday ruled for DirecTV Inc, backing the satellite television provider's efforts to enforce arbitration agreements signed by its customers in California.

Consumer advocates have criticized the increased use of such arbitration agreements that they contend deny customers the opportunity to vindicate their rights in court.

The high court, on a 6-3 vote, overturned a state appeals court decision in California that found that consumers were not bound by a provision in DirecTV's customer agreement preventing disputes from being resolved on a class-wide basis.

DirecTV is a subsidiary of AT&T Inc.

Justice Stephen Breyer, writing on behalf of the majority, said federal arbitration law trumped state law that stated arbitration could not be required. The dissenters were Clarence Thomas, Ruth Bader Ginsburg and Sonia Sotomayor.

In her dissenting opinion, Ginsburg said she would have interpreted the contract in question "to give the customer, not the drafter, the benefit of the doubt."

DirecTV said that disagreements must be resolved individually through private arbitration.

The litigation dates back to 2008 when DirecTV customers Amy Imburgia and Kathy Grenier filed class action lawsuits asserting that the company had violated state law by imposing cancellation fees.

DirecTV said the April 2014 ruling by the California Court of Appeal, Second District in favor of the consumers conflicted with a 2013 decision the company won on the same matter that was issued by the San Francisco-based 9th U.S. Circuit Court of Appeals.

The case is DirecTV Inc. v. Imburgia, U.S. Supreme Court, No. 14-462.