Slashdot Mirror
AT&T Arbitration Clause Ruled Unconscionable
Tech.Luver writes to tell us the Consumerist is reporting that a small clause in AT&T contracts has been ruled "unconscionable" by the 9th circuit court of appeals. The clause in question stated that if you use AT&T service you surrender your right to class action lawsuits and instead have to participate in mandatory binding arbitration.
Isn't this in most or all credit card agreements?
I am glad this got struck down. We are seeing more and more of corporate America using these so called "to smart for the normal guy" contracts that really are never read,signed, or agreed to in a "normal" manner. Hell, recently I got a postcard from Sprint saying that my monthly web service was going to rise a few dollars a month and that by paying my next bill I agree to their service and conditions and the raise. What the f&*k? Of course I am going to have to pay my bill or else they would shut my service off, give me a bad credit mark, and then go to collections on me. A no-win situation.
I keep asking myself, what the f$*k is going on in America lately?
This won't change until campaign contributions are limited to registered voters.
Well, where software is concerned, EULAs are moot. You see the EULA after you make the purchase and open the package. Open the package, the store will refuse to accept it. Your right of first sale (it's a commodity good, NOT a work for hire) allows you to use it for its intended purpose without restriction. You are still of course bound by patents and copyrights, but not to use the package for its advertised purpose, or even to resell it to someone else when you're finished with it.
With AT&T, you're buying a service; it amounts to a work for hire, in essence. As such, they can require you to agree to certain terms, but not ones which would restrict you from certain rights, e.g., if they work with the government to subert your constitutional rights (e.g., engaged in wiretapping without a warrant), engage in fraud and charge you for services you do not receive, or falsely advertise their services (advertising them as unlimited), and so forth, it is unreasonable for a court to accept that waiver of such rights is valid or even possible.
The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
It's really no surprise. The 9th circuit's one of the most liberal courts in the country and so people looking for them to assert the right to liberal activities usually try and sue through them, and class action lawsuits are about as liberal as you can get.
Regardless of the 9th CC's viewpoint; a class action lawsuit is neither liberal or conservative; rather it adds a level of certainty to the legal landscape. Rather than face potentially hundreds of expensive lawsuits all around the country; class actions allow corporations to resolve liability issues once and in a final manner; while allowing individuals to sue when it would be too expensive to try to sue individually. I would expect the business community to prefer class actions suits to the alternative of defending themselves everywhere over small amounts; even though the likelihood of such cases is much smaller since the payouts probably
wouldn't cover the lawyers fees. Still the certainty of class actions is better than uncertainty of individual actions since you at least have some control over teh cost of defense and ultimate liability.
I'm a consultant - I convert gibberish into cash-flow.
Michael Geist recently wrote on his website about this topic and how it applies in Canada. Unfortunately, the Supreme Court of Canada concluded that the arbitration clause was enforceable and that the use of a hyperlink was sufficient.
Yes, you are correct, the Canadian Supreme court did make that ruling.
But the largest provinces (Ontario & Quebec) have already amended their consumer protection legislation to make these clauses null and void.
The other provinces will likely follow, making this court decision irrelevant.
Comment removed based on user account deletion
"With AT&T, you're buying a service; it amounts to a work for hire, in essence. As such, they can require you to agree to certain terms, but not ones which would restrict you from certain rights, e.g., if they work with the government to subert your constitutional rights (e.g., engaged in wiretapping without a warrant), engage in fraud and charge you for services you do not receive, or falsely advertise their services (advertising them as unlimited), and so forth, it is unreasonable for a court to accept that waiver of such rights is valid or even possible."
Funny you say that. AT&T committed fraud against me just this week. They are "Cramming" my phone bill. I signed up for a basic flat rate service at $10.95 a month (+all of the various taxes). Two months into it and I already have a $125 bill! To be fair, I did make 3 minutes worth of long distance calls and dialed local number to connect to my ISP on this line while I was waiting for my DSL connection. Nothing after that though, as I use my cell and Vonage for all of my calls.
You have a nice low number so I'll give you the benefit of the doubt :)
What carrier doesn't have such a clause in their contract? I ask because I was actively trying to avoid arbitration clauses, but have given up hope... I can no longer find a credit card without one, for instance.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
EULAs for software can be overcome. It requires a firm tone and the promise of corporate letter writing. When store managers are told they will be hearing from the corporate office because they didn't satisfy a customer, they will refund you the money. The fact that EULAs are contained inside a sealed box and state that if you do not agree with the terms of service, "you may return the product for a refund" creates a catch-22 for the seller. You can't read it until its open. So, in order to decide you do not accept the terms, you must open it first. They will lose this argument unless they begin printing the EULA on the outside.
"Literally the only people this ruling benefits are class action vulture attorneys, who sue, cost a company millions of dollars, and get those actually effected small coupons to buy more of the defective product."
Considering this is AT&T we're talking about, I'm sure this is also a win for civil liberties groups looking to actually take AT&T to court for their warrantless wiretaps.
Actually, 100% of contracts are a waiver of some rights by one or both parties. That's what a contract is: an exchange of negotiated consideration ("consideration" here is a legal term, meaning either detriment or benefit to one or both parties, depending on which jurisdiction you're in).
"Stumble before you crawl"
Which is fine, unless you want to, y'know, buy a house, own a car... Face it, you can't just avoid contracts you don't like. Every ticket you buy is a contract. For that matter, so is every grocery item-- it's just an unwritten contract with fewer provisions. Also, as a non-law student, I hate to break it to you, but even contracts you don't agree to can be enforced in some situations. Hostpitals do this all the time.
From what I can tell, the fundamental question was whether the contract was fair - in particular whether the two parties to the contract had equal bargaining power.
Since conservatives are supposedly all about the free market. I would think that conservatives would be extremely concerned about situations where the market was not free. I would also think that conservatives would realize that a free market is not simply the absence of government intervention - that without government intervention the free market rapidly becomes unfree with all kinds of monopolistic and anti-competitive behaviors.
If I want to buy a phone from ATT, can I show up with a contract that I've written that is of similar length to ATT's standard contract. Would ATT seriously consider the terms of the contract that I brought to the table? Could I even modify the terms of ATT's own contract? If not, what does that say about my bargaining power? I mean, you'd think that if ATT and I were negotiating as equals then either of us could bring a contract to the table.
The problem here is that large organizations inherently have more power than single individuals. Libertarians always go on about how it's a battle between the government and the non-government but they're missing the fundamental point - it's actually a battle between the individual and the organization. The government happens to be the most powerful organization but it's not the only game in town either.
I really don't consider myself to be a liberal but when caring about the rights of the individual gets me dismissed as a liberal then I sure don't feel like a conservative.
Sadly, you're almost right. Theoretically, a contract is just a document stating what each party has agreed to. We could write up a contract saying "I will write a reply agreeing with everything you say on Slashdot for the next week and you will give me $100 in exchange", and neither of us would be giving up any rights. Problem is, most transactions now have a "standard" contract that includes giving up most of your rights.
Serious effort needs to be made to ensure that those companies that attempt to implement clauses in contracts that infringe the law and the rights people should face criminal penalties, especially when the clauses are in the contract specifically to attempt to deny a persons their rights.
Their needs to be some serious reform of the civil court system, where a judge could not simply look at the contract on the first day, see that it infringes a persons legal rights, and penalise the writer of the contract.
Chaos - everything, everywhere, everywhen
Speaking as an attorney,
Don't be silly. The plaintiff's each get $10-$100 in coupons (for which their lawyers get 10x that).
You misspelled "ambulance chaser."
Please understand that attorney advertising was an ethical violation in all 50 states until the bizarre Supreme Court ruling that it was an issue of "commercial free speech," and understand that attorneys are overwhelmingly opposed to it and embarrassed by the ambulance chasers who have destroyed our profession.
hawk, esq.
The ambulance chasers are only one symptom of the omnipresent rot in the legal profession. That your industry has escaped much needed regulation and oversight is a testament to just how much undue power and influence lawyers have on our society, laws and governments.
In a country where anyone can, without qualification, defend themselves in court, the entire concept of a bar associations is a joke to begin with. They exist for one purpose; to line the pockets of their members. How many US bar associations really protested against Guantanamo? How many stand against illegal wiretapping? Shouldn't the legal profession be at the forefront in defending the attack on legal rights. Instead they're more likely to be found in positions of power, leading that same attack.
Your profession is pretty much rotten to the core. Personally, I would just get rid of bar associations and the like and subject the whole lot of you to the harsh winds of the free market and watch your tear yourselves apart. But that's never going to happen is it? You're the ones that end up drafting all the laws after all.
May the Maths Be with you!
You do have the right to give up rights, but the right to sue is generally not one of the rights you can give up, provided that the other party did something bad enough. The line is, however, very fuzzy.
The standard statement "by participating in this program, you agree not to sue us" is called an exculpatory clause, and it IS binding under most circumstances.
I would not go so far as to say "most circumstances". It is binding if it is reasonable. Generally, "reasonable" includes clauses like "you agree not to sue us for anything out of our control", a.k.a. the "acts of God" clause. It also includes clauses that protect companies from liability caused in part by the actions of the other party---if you twist your ankle while skiing, you can't sue the ski lodge for renting you the skis, for example. It is sometimes upheld in cases of negligence on the part of the protected party, but is not generally upheld in cases of gross negligence, and is almost never held up in cases of actual intentional harm caused by the protected party.
For example, as long as AT&T runs their business legitimately, that clause is probably okay. The second they overcharge somebody for service, though, the clause is likely out the window because AT&T (or another agent acting on their behalf) took action that directly resulted in harm to the other party. Thus, if it can be proven that AT&T's direct actions caused harm, no contract will cover their backsides. This is also generally the case for gross negligence (failing to exercise even the least amount of care in preventing harm to the other party).
The primary purpose of these clauses isn't really to protect the company, as a company probably would probably not lose a case for most of the types of harm that these clauses can legitimately address. The primary purpose is to make the layman reader of the contract believe that he/she has no case, and thus prevent that person from ever contacting a lawyer to find out that he/she actually does.
Check out my sci-fi/humor trilogy at PatriotsBooks.