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Courts Reject Tech Corporation Bans on Class Action Suits
Frosty Piss writes "Class action waivers included in cell phone companies' contracts with customers are invalid in Washington State because they violate the state's Consumer Protection Act, the state Supreme Court ruled Thursday. Five plaintiffs accused Cingular of overcharging customers between $1 and $40 per month in roaming and hidden charges. Cingular had an arbitration clause that required individual arbitration and prohibited class action litigation or class action arbitration. From the article: 'In another class action-related ruling issued Thursday, the high court unanimously ruled in favor of a couple that filed a class action suit against America Online, Inc., claiming the Internet provider created and charged them for secondary membership accounts that they didn't want.'"
I've been on the winning end of several class actions. All I get is a small pittance or worthless voucher. Lawyers get millions and millions.
Too many companies nowadays are taking advantage of the vast amount of population that pay money for a service that they don't completely understand. How many people actually know what all of those surcharges on their cellular/telephone/isp bills are for? I hope this ruling occurs eventually in New York as well.
Just a reminder, kids. Just because you put something in a "contract" doesn't make it legal or enforceable. No need to get your panties in a bunch over the fine print in cell phone contracts, EULA's, etc.
I don't respond to AC's.
Interestingly, the Supreme Court of Canada just released a decision that cuts the opposite way. The Court upheld the "binding arbitration" clauses that many companies put in their various contracts and agreements. This essentially shields them from class actions, since disputes have to go to arbitration instead of the courts.
Since the matters involved in these cases actually took place, two provinces (Ontario and Quebec) have passed consumer protection laws (probably similar to Washington's) that protect consumers' ability to sue as a class. More jurisdictions need to step up to the plate and do the same.
There is a spellbook here; eat it? [ynq]
you can't sign away your rights, so such terms are never enforceable. I'm surprised as litigious a place as the USA still allows it.
Other than Washington, that is...
So.. it has come to this
The corporations should be absolutely and completely banned from including any clauses that in any way restrict the rights of consumers, or the ability of those consumers to protect their rights.
If anything, these long lists of clauses and restrictions should be severely curtailed. They don't really serve anything but the corporate bottom line.
This is not to mention the bad publicity that comes from losing a major class action suit. That's probably where the most harm comes to a company in the long run. In this case the adage that "Any publicity is good publicity" is probably wrong as these are already well known entities. Of course the only "public" that hears about this may only be slashdot, which has the numbers to take down a server, but probably not a Fortune 500.
I'm one of those wacky people who actually reads the contract before signing. T-Mobile has a similar clause, requiring me to give up the right to both individual and class-action law suits in favor of arbitration.
When the class gets paid in vouchers, the lawyers should be paid in vouchers.
Many contracts limit your ability to sue in a real court. They exist in everything from vehicle purchase contracts to fitness club contracts. The best thing consumers can do is to read the contracts, know their rights, reject contracts where such provisions can't be removed and tell the salespeople why this isn't acceptable.
Any business that forces a customer into binding arbitration in a contract can't be trusted.
So, if you sign a cell phone contract, with a 14 day return policy, and on day 20 you get your bill and discover that they've overcharged you, you are a coward? Your options are basically:
The game is tilted against the consumer in these scenarios. And I'm glad this ruling came down the way it did. It's not right that a contract can force you to give up your legal right to seek relief in court. And before any wise-ass comes back with "then don't sign it", try living with a cell phone, credit card, phone service, bank account, etc, etc, etc. They are all doing it!
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Class action lawsuits is one way to level the playing field and make companies care about their consumers by going after the only thing they understand: their bottom lines.
After all, the companies have massive legal departments, paid 24/7 access to the Congress with the ability to (re)write the laws, they can drag out even the most solidly grounded lawsuits forever through the appeals process and wait for the victim to go bankrupt with all those legal and court fees. Any individual claims that do get through all the way are likely to be small, and will not impact the profit margins at all.
Consequently, limiting class-action suits, along with court-awarded damages and restitution is a horrible idea; corporations would be able to literally kill thousands and still turn a profit!
Obama likes poor people so much, he wants to make more of them.
try living without. *sigh*
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
If I'm screwed out of a lot of money, I'd want compensation, but if I only have a small loss, I'm mostly interested in the company not benefitting from screwing me over. Having them stop is more important to me for those situations. But the time and cost to myself is too high for an individual.
If the lawyer can shoulder the time and cost, I don't mind them getting a big payout, I wouldn't hope to get much back if I only lost like 50 bucks to the corporation. Hopefully they'll change their policy and that would still help me at least.
Is a refreshing change. It's nice to hear a story where justice is upheld rather than hearing more about how screwed I am.
don't really punish bad behaviour too often. A lot of the ones that end up in the news have really pathetic reimbursements that the "victims" need to be bothered to apply for. I mean what's the point of these things if you still make many more millions and then need to give a tiny iota back or some free song downloads to the few principled citizens who have the time to get it. They should modify the laws so that any unclaimed money still needs to be paid as a fine.
How about limiting the percent of the payout that the lawyers can get. Or setting some minimum floor that HAS to go to the class and not the lawyers.
I bet, in most of these cases, the cost of the action just gets passed on to future consumers.
If class actions are about limiting corporate malfeasance, forbid them from passing on the costs to consumers and limit the amount lawyers can take of the award.
I have a friend who works for a company whose sole purpose is to find cases of over charging in the telcom industry.
The way that he explained it to me is that a client company would present the bill and the the amount owed to his company who understood the charges and then would the dispute the bogus fees (things like charging for lines that did not exist). The telcomms would then respond with, oh our mistake.
At the end of the day, friend's company would return 10% of the original amount paid to the client company and keep the rest. I was told that this is just standard practice. I guess this is easier to do when you are dealing with $10M/month phone bills and the creation of an internal audit department does not justify the expense.
Then obviously you've never been on the winning end.
Information wants to be free.
Entertainment wants to be paid.
You just want to be cheap.
On the one hand, class actions give the consumers the opportunity to build up enough clout to get noticed and possibly get the corp to change its behavior. Plaintiffs get added to the suit more or less automatically (you've seen those mailers that notify you that you're involved...). But the consumer rarely (in my experience) gets any real remuneration as a result. In this particular Cingular case, the plaintiffs could have added just about anybody who used their service during the specified period resulting in many thousands of plaintiffs in the class action. Cingular would probably have to pay out a few dollars per plaintiff in the form of future credits or something like that, plus legal fees. Of course, it may also allow them to weasel their way out of paying those who are no longer customers and various other bits of chicanery. But, by the nature of the class action, the handful of initial plaintiffs are able to leverage themselves into a position of reasonably significant power and actually get something done. (note that I haven't read the Cingular case, and my inferences above are based on my past experiences with class actions).
On the other hand (bet you forgot about that first hand up there!) according the TFA, Cingular is willing to pay out the state's defined small-claims amount _or more_ in individual arbitration. That's $4,000 in Washington state. But they're banking on the idea that only a handful of individuals would bother. However, if the customers were actually pro-active about it and all those who were eligible for the class action took the initiative and entered arbitration for something that was provably wrong on the part of the corp, then the individual plaintiffs stand to gain significantly more on an individual basis while the corpp stand to lose significantly more.
I would like to see some consumer advocacy group take a different approach in cases like these. I'd like to see them run a couple test arbitrations from their pool of original plaintiffs. If they are successful, use the information gathered as a result of this to assist additional plaintiffs in pursuing the same arbitration. They could put together packages of "how-to arbitrate the cingular over-charging thing" and send them to anyone who would have been eligible for the class action in the first place. Then you'd possibly see (provided the rewards were high enough) a significant number of well-armed plaintiffs entering arbitration at the same time. THat would likely have a real affect on a large corp. Nothing like having the legal dept suddenly swamped with massive number of arbitrations and then finding lots of well informed and prepared plaintiffs across the table from them. They may find themselves in a situation where they are _asking_ for a class action in violation of their own contract. That would be nice.
man, I feel like mold.
You mean he's not a lawyer?
I am TheRaven on Soylent News
(The same goes for holiday gift certificates.)
Getting a cell phone without signing anything is trivial. I have had prepaid service for a year now. I have never had a credit card. And land line phone service... what is this, the 20th century?
PS: I am 25.
Cool, I want to be cell-phone only so I don't have to deal with two numbers. Since it's my primary line, find me a pre-paid plan that's competitive. Counting nights and weekends I use about 2,500 - 3,000 minutes a month. On a post-paid plan of $39.99 (1k peak minutes/unlim n&w on T-Mobile) that's $0.013 a min for 3,000 minutes. Find me a pre-paid plan that's competitive with that.
Oh, that's right, you can't, because the pre-paid offerings are purposefully crippled to make them useless for anything but light use.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Congrats. You spend 10% of your waking life on your cell phone. What are you, a 13 year old girl?
What are you talking about? Why just look at that rapper Kevin Federline. He's as famous as ever. Compare with his ex-wife, who I can't even remember her name. Some singer I think.
The biggest complaint about the binding arbitration nonsense is that the company making the contract selects who will do the arbitration, and if they lose too many cases, fire them.
In essence, you have to take up the complaint you have with the company with the company itself, and they're hardly unbiased. And I'm sure they would require that the arbitrations happen on their time table, one on one only, no lawyers allowed on the customer's side.
So a company is punished when the settlement has a clause that stipulates that anyone accepting the settlement money must also extend their cell contract by another year? Or anyone wronged gets 'coupons' to buy cell phone's on the offenders network? Wow, what a punishment!
That lets you offer amendments to the proposed agreement. I presume it must be there, or it isn't really a contract, right?
Unless you happen to be dealing with someone who's large enough to have a legal department which reviews such things regularly, or you're doing so much business (or have a susbtantially large transaction) that they really are negotiating one on one, there is essentially no reason for them to accept anything other than the boilerplate version. Having a junior staff lawyer at $125/hr review your markups to their contract (probably twice, at least, in any negotiation process), as well as the postage/admin time just isn't worth it for a contract worth $1000 in gross revenue over two years, or that can be cancelled for $175 and you keep a handset they've subsidized by $50-$250.
I regularly negotiate my contracts, but I'm the chief, cook, and bottle washer. If there is a serious legal issue I have to get formally reviewed by my council, it would have to be on a contract worth at least $10-15k, otherwise, I'm just go to say "no, thanks." It's just not worth it.
Is it just my observation, or are there way too many stupid people in the world?
I feel like death on a soda cracker.
Actions like this show that the Great Holy Infallible Markets (TM) usually decide that eliminating your rights and stepping all over you generate the most profits. Especially if they can collude and set "industry standard" business practices. In fact, the few consumer protection laws that do exist are one of the few reasons that we really aren't a Corporate Dictatorship yet.
I feel like death on a soda cracker.
Yeah...because all those class action lawsuits that SBC faced and lost over various sheisty practices over their early DSL offerings did SOOO much to help us all out get honest deals on DSL from AT&T now that they have all been allowed to remerge together. The people who "won" got all of a few bucks in a check that came almost a year later... I got more bang for my buck just griping at them up the chain for a few hours until I was eventually credited 6 months free DSL for their various screwups. Course it was 6 months of free crappy DSL that still didn't meet what I was promised, but at least it was free and lasted long enough for new competitors that weren't total screwups to enter the market. I have not had Telco direct provided DSL in 8 years because of that.
The only change I can believe in is what I find in my couch cushions.
Maybe he has a job! I know that is a shocking concept on slashdot. I have coworkers call my cell phone all the time. My wife and I decided to ditch landlines on our last move. It's about the same cost as a very cheap t-mobile plan + bare bones AT&T line, but we went with sprint. I figure that we'll save money after this contract by switching to another carrier.
MidnightBSD: The BSD for Everyone
Pre-paid service? Say no more. You're already getting overcharged. Avoiding the contract doesn't solve anything. You're just taking the price raping spread out over all your service rather than being threatened with it if you leave.
"People who think they know everything are very annoying to those of us who do."-Mark Twain
I was trying to think of a good way to summarize my reply, and a sibling post did it better than I ever could. 3000 minutes a month? WTF? You need to find more efficient ways to communicate. I don't know if you are spending all that time for business or personal needs, but either way...
Introduce your friends/coworkers to email, forums, wikis, SMS, etc. I probably spend about 5 hours a day (call it 9000 minutes a month) communicating with friends and coworkers and relatives, *total*, but 50% of that is in person and 50% of the rest is via email lists and forums, and 50% of the rest is group voice chat (ventrilo, teamspeak, skype, google, etc) with multiple people at once, ALL of which get a lot more accomplished for the time spent than individual phone calls would, and for FAR less money.
After exhausting all the better means, I use 100-200 minutes a month on my phone, which is my primary and only line. That is emergency midnight calls to and from work to handle server hiccups and such, last minute when/where calls to friends when we are doing stuff, the occasional takeout/delivery order to a restaurant that doesnt have online ordering yet, and a little time spent talking to relatives who are still stuck in the 80s.
Thanks to using prepaid, I have never been locked to one provider by hardware shenanigans. I have never had to sign a contract for my phone. And I have never paid for minutes that I didn't use.
You remind me of people who "cant" ride the bus because they "need" to get to the grocery store on a moment's notice at a random time every day.
That's why it has to be a concerted effort by many many plaintiffs simultaneously. Really more of a mass protest I guess than any real remedy. The idea, in my mind, is to swamp them with a situation they can't ignore such that these arbitration clauses become counter-productive for them.
Imagine the splash when many thousands of certified letters requesting arbitration arrive in the legal dept all at the same time. A little press action thrown in would make for an interesting day. The point is to make the corps recognize that if they ask for something like no class action lawsuits, that they should be prepared to face the consequences. A well organized mass effort would certainly make an impact. meh.
man, I feel like mold.
...is a University in Pullman. If you're talking about the state of Washington, it's called Washington.
How about my idea: punitive damages go to the federal government's general fund. That way, you can still punish corporations that don't understand motivations other than financial penalties, but remove all profit incentive from the equation. Would this have any drawbacks?
Some states already do that.
3000 minutes a month? WTF? You need to find more efficient ways to communicate
My grandpa uses 0 minutes per month, man that guy is really efficient!
Introduce your friends/coworkers to email, forums, wikis, SMS, etc
My daughter uses SMS and is much more efficient than me because I use voice, here is an example of a speed comparison:
Me speaking on cell phone to daughter: "I will pick you up in 10 minutes for soccer practice"
Daughter texting: OK
As you can see texting is clearly faster, now let's try a wiki example:
Me speaking on cell phone to co-worker: "To boot the server, just flip the big red switch"
Co-worker using wiki: {1 mouse click on hyperlink to "Booting the Server"}
Again, no comparison. Let's make sure a forum is more efficient also:
Me speaking on cell phone to friend: "Man I wish I knew if Sony had cut the price of the PS3, I really think I would buy one if they did, unfortunately I don't know and neither do you because we're both having this conversation on this dang cell phone!"
Friend reading slashdot: "Sony Drops PS3 Price"
It's pretty clear, the cell phone is probably one of the less efficient tools in our arsenal.
Tune in next week for another in depth efficiency article titled "The Wheel - What Went Wrong?"
MetroPCS, if you happen to live in one of their Areas. Flat rate pricing with no contract. I've had them for over 5 years.
Just a Tuna in the Sea of Life
Daughter texting: OK Why are you making plans to pick her up for soccer practice 10 minutes ahead of time instead of a day or a week? When I had after school or weekend activities as a child I knew which parent would be taking me, and when, at least a few days in advance. Me speaking on cell phone to co-worker: "To boot the server, just flip the big red switch"
Co-worker using wiki: {1 mouse click on hyperlink to "Booting the Server"} This is *EXACTLY* why we have set up a jabber server in our offices. 200 users, 2 IT/sysadmin guys. I'll take jabber over the phone for nonsense like that any day. Me speaking on cell phone to friend: "Man I wish I knew if Sony had cut the price of the PS3, I really think I would buy one if they did, unfortunately I don't know and neither do you because we're both having this conversation on this dang cell phone!"
Friend reading slashdot: "Sony Drops PS3 Price" Why didn't "friend" email you? Or ask on a forum where dozens of your friends could have answered, whoever saw it soonest? What would have happened if he couldn't reach you on the phone, he would have never found the answer?
I definitely agree, the cell phone is probably the least efficient communications tool most people have available.
Anyone who is on their cellphone for three hours a day for work purposes on a personal phone is a dick. Get on the corporate plan, or get a company account, whatever. Whatcha' gonna do if you get stiffed on the bill - it's you, liable.
Why are you making plans to pick her up for soccer practice 10 minutes ahead of time instead of a day or a week? When I had after school or weekend activities as a child I knew which parent would be taking me, and when, at least a few days in advance.
Lets check and see how that would work:
As I pick up daughter for soccer, she asks: "You're late, why didn't you call?"
Me: "Traffic was bad but Sparr0 didn't want me to use my cell to make a voice call, so I used my cell and text'd my status to the Soccer Parents forum, I hoped you might have seen it there."
Daughter: "I don't go to that forum"
Me: "Dang"
Daughter: "Who's Sparr0?"
Me: "He's a poster on slashdot, seems to know all situations in which a cell phone might be used, turns out they just aren't efficient. Anyway, instead of me just telling you, why don't you check the the wiki I setup, it should explain everything."
AT&T has two variations of "Pay As You Go". No contract, no commitment. One is $1.00 per day plus $0.10 per minute. The other is $0.25 per minute.
You must add $25 every 90 days. That works out to around $8.40 per month as long as you only talk about 33 minutes a month (if you choose the $0.25 per minute version). And as long as you keep adding every 90 days, you don't lose your previous balance. Perfect for semi-emergency use.
I don't consider that "price raping".
> 1. Cancel and pay the $175-$200 fee. Pay the overcharges or dispute them.
> 2. Cancel and refuse to pay the $175-$200 fee. Buckle down for a fight over your credit report that you will probably lose and higher interest rates for the next seven years.
> 3. Sue them.
4. Get some friends together and visit a few of their towers, simultaneously, some night. "Timberrr!"
Call it "customer satisfaction taken to the extreme".
Unless you are the company, such as those of us who contract. It's part of the cost of doing business.
So, because my calling patterns don't fall into something that would work with pre-paid service I need to find a more efficient way to communicate? WTF? How does that disprove my point that pre-paid service won't work for everybody?
Yes, perhaps I'm a phone-aholic, but I could have made that example with somebody who only uses 500 minutes a month (16 minutes a day). At ten cents a minute on T-Mobile prepaid (the cheapest one there is) that's still $50 a month. T-Mobile's 600 minute post-paid plan is $39.99 and you get nights and weekends to boot (find me a pre-paid service with nights and weekends). Or you could go with the 300 minute $29.99 plan with free nights and move 200 minutes to nights. Either way, the post-paid option is cheaper.
Either way, pre-paid is basically useless unless you barely use your cell phone. And at that, T-Mobile is the only one that isn't a complete rip-off. 10 cents a minute assuming you buy $100 worth of airtime. That's a fair deal. Everybody else is either 25 cents a minute (or more) or they charge you a daily fee every single time you use the phone.
I have never had to sign a contract for my phone.*shrug*, with T-Mobile I signed a one year contract when I signed up with them. Got the same deal as I would have with a two year. Now if my phone dies I'll just buy a $30 replacement at Wally World (one of the to-go kits) without touching my contract.
You remind me of people who "cant" ride the bus because they "need" to get to the grocery store on a moment's notice at a random time every day.You remind me of people who think their lifestyle choices automatically apply to everybody else without even considering the situation of the other person.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
Yeah, and T-Mobile's is just $0.10/min with no daily fee and the minutes don't expire for 365 days. Gives you about 83 minutes a month for $8.30. They are basically the only one of the big-four that don't cripple their pre-paid option.
I don't consider that "price raping".I also don't consider it usable for a landline replacement unless you barely talk on the phone. Some of us use our phones pretty frequently and pre-paid isn't cost effective for us.
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.