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Court Rules Against AT&T's Service Agreement
The Seattle Post-Intelligencer is running a story about a recent ruling from the Washington State Supreme Court, which decided that AT&T's service agreement was not capable of waiving a customer's right to file a lawsuit against the company. The full opinion (PDF) is also available. From the conclusion:
"AT&T's Consumer Services Agreement is substantively unconscionable and therefore unenforceable to the extent that it purports to waive the right to class actions, require confidentiality, shorten the Washington Consumer Protection Act statute of limitations, and limit availability of attorney fees. ... Courts will not be easily deceived by attempts to unilaterally strip away consumer protections and remedies by efforts to cloak the waiver of important rights under an arbitration clause."
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Isn't AT&T's service agreement just as silly? The judge in the case appears to think so.
I'm a big tall mofo.
As the FTA mentions, these arbitration clauses are widely-used elsewhere. AT&T will appeal to federal court, and win.
This really is an activists' decision -- modern legal theory is far more supportive of arbitration than the class action process. Many states don't even have class action anymore. They're a racket; only the head, and the attorneys make money.
Thank you Judge Skywalker.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
The modern abuse of arbitration clauses reminds me of the "right to contract" cases. Contracts are often little more than legal cudgels, designed to exploit the difference in power between the two parties to the benefit of stronger party. The arbitration system is a perversion of justice and should be eliminated.
Mea navis aericumbens anguillis abundat
You cannot sign away your rights. They're guaranteed.
AT&T's clause is unconstitutional as are every similar company's clauses.
The right to bring legal action cannot be signed away. That's like saying that these companies are above the law.
Next to be tested in court, the clause stating "we reserve the right to change the terms of this contract at any time without notice".
If the terms are flexible, it's not a contract. It's like signing a blank check and something we aren't doing.
They're using their grammar skills there.
These arbitration clauses are also widely-overturned. This is hardly news--courts have been striking them down left and right for a decade now. Binding arbitration agreements are among the most common provisions stricken from agreements, including EULAs (in fact, it's the most common violation stricken down in software licenses).
The basic premise is that choosing ADR should be preserved as an option, but waiving your rights to contest actions in order to get service is wrong. It is. It has little to do with class actions--it's about litigating your individual grievances with the company.
Contrary to the editorializing in the summary, however, it has nothing to do with anything other than the fact that binding arbitration is disfavored as a lopsided provision offering no advantage to the customer.
Binding arbitration clauses can be fine, even in adhesionary contracts, and the court even mentions this:
We emphasize that these provisions have nothing to do with arbitration. Arbitrators supervise class actions, conduct open hearings, apply appropriate statutes of limitations, and award compensatory and punitive damages, as well as attorney fees, where appropriate.
The issue is where they are substantively unconscionable, as here, where ATT has also stricken out the availability of class actions:
A&T's Consumer Services Agreement is substantively unconscionable and therefore unenforceable to the extent that it purports to waive the right to class actions, require confidentiality, shorten the Washington Consumer Protection Act statute of limitations, and limit availability of attorney fees.
Because any party's foreseeable claims would be very small, by removing the ability to file a class action, ATT was essentially immunizing themselves from suits - no lawyer is going to take a case, even on contingency, that's worth only $10 or $15... But if it's $10 or $15 to fifty-thousand customers, now you're talking.
So, again, this decision does not say all arbitration clauses are unconscionable, and even goes out of its way to say they could be fine... but only "could" be fine - the issue is what other clauses are present.
Because they are far more draconian than At&T's ever was.
Just saying, most Game Company EULAs actually state that you don't even get a service in return for your payments and that your payments are non-refundable and you have no expectations of privacy and your computer is for all intents and purposes the property of the gaming company for as long as their software resides on your computer...
I wish I was making this up but as you can see here (the most popular online game in the world):
http://www.worldofwarcraft.com/legal/eula.html
http://www.worldofwarcraft.com/legal/termsofuse.shtml
I'm not. And as an even more negative note this EULA actually stood up in court of law.
http://virtuallyblind.com/2008/07/14/blizzard-wins-sj-mdy/
Your RAM is actually Blizzards. You have no right to sue. You have no right to a refund. You have no right to class action. You have no right to communicate to anyone about what Blizzard communicates to you. Because, it is all copyright. That is a huge legal determination.
This brings us back to the topic at hand, AT&T. Because in all honesty, "waive the right to class actions, require confidentiality, shorten the Washington Consumer Protection Act statute of limitations, and limit availability of attorney fees." these things have already been ruled as legal in several gaming company cases and RIAA cases (which for brevity I did not touch on).
To tell AT&T (and every other company on the planet)that they are breaking the law because they are not using copyright as the rational for their arguments makes absolutely no legal sense whatsoever.
Because the end result is that all company claims against their consumers will be twisted in to copyright claims and therefore automatically upheld...
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