Slashdot Mirror
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.'"
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]
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.
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.
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.
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?
Dewey, what part of this looks like authorities should be involved?
I feel like death on a soda cracker.
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."