PacBell To Be Hit With $27M Fine

MImeKillEr writes: "The San Francisco Chronicle has an article that states PacBell is going to be hit with a $27 million fine for "incorrectly billing" between 30,000 and 70,000 users for DSL access they didn't request or recieve, or received but didn't work, or cancelled, tacking late fees onto disputed charges, etc."

Comments

Why punitive damages make sense

[sam_handelman]

Because companies are in it for the money.

This $27 million dollar figure isn't enough. In order to deter this sort of practice - to make sure companies don't do it - you need a ridiculous fine.

Remember when that woman was awarded a hundred million dollars for scalding herself with McDonald's coffee? It was reduced somewhat on appeal. Was that ridiculous? Yes.

However, every coffee cup in the country had a "don't burn yourself" warning attached to it for some time.

If you apply that same logic to something important - as opposed to scalding coffee which is utterly trite - you can get similar results. Fine 'em a billion dollars. They've got it; and if you do that they won't dare try this again for a while.

Re:Why punitive damages make sense

[sam_handelman]

Maybe you really were negligent, maybe you didn't fix the steps even though you knew they were cracked, does that justify an unreasonable award?

That depends. If a reasonable award will motivate other shopkeepers to keep their steps repaired, then no, an unreasonable reward is not required. It depends a lot on how often these companies get caught. If a company only has a 1% chance of being caught doing X, then when they are caught the punitive cost must be hundreds of times the marginal benefit of doing X, or it isn't enough of a deterrent. Billing irregularities in the telecom industry happen all the time, and only a fraction are ever prosecuted. Therefore, when they are, the punitive damages need to be huge.

If you have to drive one company out of business to keep an entire industry in line, you should do it. If you have some other means of reigning in the rampant corporate lawlessness in this country, I'd like to hear it.

Companies can go under, and people can lose their jobs. Them's the breaks. I'll stand by the argument that more people will have better jobs if corporations obey the law; if some companies have to be punitively destroyed, so be it.

Re:Why punitive damages make sense

[PD]

Remember when that woman was awarded a hundred million dollars for scalding herself with McDonald's coffee? It was reduced somewhat on appeal. Was that ridiculous? Yes.

NO, most definitely. The woman had third degree burns on her crotch and needed very extensive skin grafting and long hospitalization to recover. It was not a minor injury at all. And, there's no good reason for keeping the coffee that hot anyway. 180 degrees is far too hot to drink.

Re:Why punitive damages make sense

[PD]

God you libertarians make me sick. Go back to whining about your seatbelts and helmets, will you?

Re:Why punitive damages make sense

[PD]

Next time a defective product blows your head off or otherwise maims you, I'll be the one standing by laughing. I expect you'll approve of it too. After all, the reason you hurt yourself when something you were using hurt you through no fault of your own is because you were stupid.

happened to me

[mojo-raisin]

I tried to sign up for PacBell DSL about 2 years ago, but after a series of screwups on their end, called them up and cancelled everything and mailed back their DSL modem. About 6 months later, my phone bill starts tripling and I see I've been signed up. So I deal with ~3hrs of waiting on hold to talk to the right people... AND THEN IT HAPPENED AGAIN. To make a long story short, I think the fine should be larger.

"That woman and McDonald's"

[Macrobat]

Here is some information on the McDonald's scalding incident. The woman sought $20,000 to cover the cost of her operation, but McDonald's refused. A jury awarded her $200,000, not "a hundred million dollars."

As far as ridiculous, well, I've pulled this paragraph out of the page:

Further, McDonald's quality assurance manager testified that the company actively enforces a requirement that coffee be held in the pot at 185 degrees, plus or minus five degrees. He also testified that a burn hazard exists with any food substance served at 140 degree or above, and that McDonald's coffee, at the temperature at which it was poured into styrofoam cups, was not fit for consumption because it would burn the mouth and throat. The quality assurance manager admitted that burns would occur, but testified that McDonald's had no intention of reducing the "holding temperature" of its coffee.

So tell me: deliberately selling a drink that was, by McDonald's own admission, "not fit for consumption" even though they knew that burns would occur--isn't that a little bit more ridiculous than the money the jury awarded her?

Re:"That woman and McDonald's"

[Kibo]

How many people do you know that gulp their hot coffee? McDonald's customers who didn't cover their hands in creamy butter liked that the coffee was hot. Those customers should be able to buy hot coffee if that's what they like. McDonald's was being a good company takeing care of what MOST of their customers wanted. Funny how they didn't take into account how much cooler the coffee got when poured into a cup, cream and sugar were added, it was left to sit for a while, or perhaps held to enjoy the heat on a cold morning, and how hot it would finally be when swallowed after having been stirred blown on then gingerly sipped.

I've burned my mouth when I didn't blow on pizza enough, and the worst measure of whether the pizza was too hot was it's temperature when they put it in the special pizza deliver appliance. Hey, my teeth are really temperature sensitive too, I'm going to sue Ben and Jerry's for not making a more comfortable room temperature ice cream because I'm too stupid to learn and adapt unlike all the other mammals that preceeded me.

Re:"That woman and McDonald's"

[Macrobat]

Funny--if you'd bothered to follow the link and read the piece, you'd see that even McDonald's didn't believe that people waited for the coffee to cool down, and that folks wanted something they could down in their cars while on the go. Note how they also admitted that most places served coffee at about 140 degrees, not 190, so the woman had a reasonable expectation based on common practice that her drink wouldn't cause third-degree burns if spilled. They'd also received hundreds of similar complaints over the years, and done nothing to change their practices. So no, McDonald's was not being a "good company" because they flat-out SAID this wasn't what their customers wanted. It was just easier for them to brew that way, customers be damned.

The number of people who comment on this case without even looking up the most easily-found facts is staggering. It's not like it's an ink-blot test where you can make up whatever shit springs to mind. But let's make a list of your assumptions:

1. Putting cream and sugar in coffee will lower the temperature by fifty degrees. (Ten degrees, I'll take. Fifty, no. Besides, she didn't get a chance to put anything in the coffee before it burned her.)
2. McDonald's thought people would wait for their coffee to cool down. (They already stated that that's not what most people did.)
3. February mornings are so cold in Albuquerque that people regularly warm their hands on a cup full of scalding beverage. (Albuquerque is roughly the same latitude as Phoenix and Amarillo, so unless they'd been experiencing an uncommonly cold spell, it wouldn't have been below fifty at the lowest.)
4. The woman "gulped" her coffee. (No. As I said before, it spilled before she even got a chance to find out how hot it was.)
5. The woman put "creamy butter" on her hands before opening the lid. (Oh--that was an attempt at being witty. Sorry. I'll ignore that one.)

So, stripped of your flights of fancy, the fact remains that McDonald's knew this was, not only an accident waiting to happen, but an accident that had already happened to other people. They just sat on their hands, refusing to do anything until a case got so severe that they couldn't ignore it. That's "takeing" care of their customers? Right.

So who gets the money?

[ShaunC]

PacBell is going to be hit with a $27 million fine for "incorrectly billing" between 30,000 and 70,000 users

Suppose it was 30K users, the fine works out to $900 per user. Suppose it was 70K users, the fine works out to $386 per user. Suppose the median is a viable figure, at 50K users the fine works out to $540 per user. So who gets all this money? According to the article,

If approved, the $27 million would go to the state's general fund.

And I'm sure the state's general fund is going to reimburse everyone who was overbilled, or outright fraudulently billed for services they never received? Yeah, right:

Pacific Bell, part of SBC Communications in San Antonio, agreed to give customers a $25 credit or one-month of free DSL service if it makes similar billing errors in the future.

Once again, the consumer takes it up the ass. PacBell has to pay $27 MILLION DOLLARS to the state, who will undoubtedly use the money for the war on drugs, purchasing unnecessary Oracle licenses, or some similar "laudable" cause; but PacBell doesn't have to pay the overbilled customers jack unless it happens again. The improperly billed customers get no legal recourse, aside from fighting PacBell for the charges on their own. Wonderful.

Color me unimpressed. Hey, California, how about standing up for your citizens instead of your own coffers?

Shaun

Thanks for the correction, but still...

[Macrobat]

Albuquerque's average daily high in February is around 55, and the low is around 28. You're right, I didn't check my facts. Still, let's assume it's halfway between the high and low, say 42 degrees. Still hardly finger-numbing weather. And that also doesn't let McDonald's off the hook.