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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.'"
Is either a fool or a coward.
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.
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.
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.)
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?
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.
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.