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AT&T Makes Its Terms of Service Even Worse, To Discourage Lawsuits

Posted by timothy on from the even-more-fine-print-to-read dept.

techmuse writes "AT&T has changed its terms of service (including for existing contracts) to prevent class action suits. Note that you are already required to submit your case to arbitration, a forum in which consumers are often at a substantial disadvantage. Now you must go up against AT&T alone." This post on David Farber's mailing list provides a bit of context as well.

48 of 412 comments (clear)

  1. Great by imamac · · Score: 5, Insightful

    Now I can cancel my contract with no fee...

    1. Re:Great by Drantin · · Score: 5, Informative

      If they change the contract after the fact, it may no longer be binding...

      --
      Actio personalis moritur cum persona. (Dead men don't sue)
    2. Re:Great by Tawnos · · Score: 5, Informative

      The term to be familiar with is "materially adverse change in the contract."

    3. Re:Great by dimeglio · · Score: 5, Insightful

      As a consumer you might have right above and beyond whatever is in the contract. They cannot put a clause, for example, that goes against any laws. You cannot make you sign away those rights, at least where I live.

      --
      Views expressed do not necessarily reflect those of the author.
    4. Re:Great by nosferatu1001 · · Score: 5, Informative

      Except that, in the UK at least, the Unfair Contract Terms Act requires that you give an option to end the contract if the terms are changed and you do not agree to them. Unilateral changes to contracts voids the contract, as you have lost the meeting of minds.

    5. Re:Great by deathy_epl+ccs · · Score: 4, Informative

      Yeah, but the clauses that say they can change the terms on their whim have repeatedly failed to stand up in court because they are against the law. Those are there for people who don't know better and won't get a lawyer involved if they think they are screwed already.

    6. Re:Great by QuoteMstr · · Score: 5, Insightful

      Sorry, I prefer the "unfettered capitalism" of the past -- at least, it was efficient and the same rules, however difficult, applied to everyone.

      Unfettered capitalism inevitably leads to wealth concentration, and wealth concentration inevitably distorts the political system into favoring those with wealth. Even if you start out with the same rules applying to everyone, after a few decades, that's assuredly not the case anymore. Consider the big trusts of the 19th century, or the original AT&T, or the Teapot Dome scandal, or the more recent Department of the Interior Scandal, or own present-day financial system as described by Simon Johnson.

      People like you, against all rational self-interest, argue in favor of those who currently hold the reins of power. People like you comprise the lunatic fringe that's historically impeded any attempt at breaking entrenched powers and enriching the life of the common person. In short, fuck you and the libertarian horse you ride in on.

    7. Re:Great by Anonymous Coward · · Score: 5, Informative

      This is true- but under U.S. common law, a modification to a contract for services requires consideration (i.e., a new benefit to the non-modifying party or a new detriment to the modifying party). Some requirements of contract law may not be waived by the terms of the contract. What the original poster is talking about is a "materially adverse change" to a contract. While PHONECOMPANY may reserve its right to modify the contract, it cannot force you to accept the new contract terms. Where the changes to the terms are "materially adverse" (price/substantive rights are material) you typically have a right to withdraw from the contract with none of the penalties ("liquidated damages") that were part of the original contract. Those liquidated damages (cancelation fees) represent the value that they lose when you violate the terms of the contract, and must be reasonable.

      Note that in some states, Mediation (non-binding) may be required by law. Arbitration may not be waivable. In almost all states, you cannot be forced to waive substantive legal rights (such as the right to sue for breach of contract in a court of law). Additionally, you may be protected by consumer rights acts (deceptive trade practice acts) which are a whole other story. Under deceptive trade practice acts, you are typically able to sue for damages when false statements were made which induced you to enter into the contract. So if the PHONECOMPANY salesman says "we will never change these terms," then the terms change, you may be entitled to relief (this is just a simple example at hand).

      Capitalism is not unfettered, you have substantive rights under common contract law. But "poor service" is generally not a material breach of a contract, which means you are not entitled to relief or to back out of the contract. Not giving you a new, cheap phone when you lose your phone, is typically not a breach of contract at all etc.

    8. Re:Great by blackraven14250 · · Score: 5, Insightful

      In all reality, people need to see the middle ground. people like you (the parent) slam the corporations, and advocate for government, which will try to consolidate power. People like the grandparent say corporations will be good themselves, when in reality, they will consolidate power. You're both morons on your respective counts. The entire way we've even survived as a country is by playing the two interests against each other in our (the people's) favor. How else do you think people keep these massive entities under control?

    9. Re:Great by severoon · · Score: 5, Funny

      What I can't understand is: why did they stop there? They could have gone on to say, you can never ever sue us, individual or otherwise, and you have no right to arbitration either. Their contract may as well be seven words followed by a dotted line:

      ALL YOUR BASE ARE BELONG TO US.

      x______________

      --
      but have you considered the following argument: shut up.
    10. Re:Great by davester666 · · Score: 5, Informative

      I recall another major telephone and/or cable company that added this 'you must use arbitration' clause to their contracts, and then they were sued and the judge ruled it infringed the individuals rights. Here's one ruling I found using google:
      http://www.consumeraffairs.com/news04/2006/12/arbitration_challenges.html

      And an interesting article on more recent 'arbitration' law:
      http://consumer-law.lawyers.com/Consumer-Contracts-Mandatory-Arbitration-Clauses.html

      I guess AT&T is hoping to get 'grandfathered' in...

      --
      Sleep your way to a whiter smile...date a dentist!
    11. Re:Great by ErikZ · · Score: 4, Insightful

      "Unfettered capitalism inevitably leads to wealth concentration"

      Which successful system doesn't? Once the winners get to the top of any system, it's in their self interest to stay there. It's best to deal with it after the fact, instead of placing down onerous rules that hamper everyone.

      China, India, and Brazil aren't advancing due to their awesome social policies. That's capitalism baby.

      --
      Democrats or Republicans. They are both taking us to the same place and they are not afraid of us anymore.
    12. Re:Great by blackraven14250 · · Score: 5, Insightful

      Actually, by "middle ground", I'm not talking about just getting into the "bad" category. It's more of a separate thing that allows both to exist. It's called "the people". The people make up both government AND corporations, and we have the power to do with them what we please. We did, and should continue to, play them against each other to make our lives better. I'm not advocating for not being hard on them both. Be hard on BOTH of them, rather than the one you choose to fight for. There's no reason for us to allow either to become too powerful. We gave both the government and corporations power with the intent to wield it and benefit ourselves. Everyone in this country either sides with government or corporations, which is completely countering the population's goals. Why not side with the people? Why not side with the only entity that can outright control everything we've created? This doesn't fall into the category of any adjective other than smart. If we didn't, and if we don't in the future, we're going to be fucked over by things we made to help us.

      You don't let the two strongest types of entities that we've ever created work together. That's bad for the people.

      There's nothing abstract about this. In fact, what you're talking about is really the point I was trying to get across to begin with. I hope I made that much, much clearer this time around.

    13. Re:Great by liquidsin · · Score: 4, Informative

      same as if there was a clause allowing them to rape your mom. illegal clauses in contracts are unenforceable.

      --
      do not read this line twice.
    14. Re:Great by Rand310 · · Score: 4, Interesting

      It is actually a critical and fundamental pillar of capitalism that the participants be well informed (read Friedman and others). Academically, if the consumer is so bogged down in misinformation or overinformation that they are not well informed than the assumptions that allow capitalism to work so well break down - and the results can no longer be considered the product of a capitalistic market.

    15. Re:Great by Bigjeff5 · · Score: 5, Informative

      Also bear in mind that consideration does not have to be large, it just has to exist. The common example is the single peppercorn - it is enough to qualify as consideration. Size does not matter, it simply must be aggreed upon by both parties, and it cannot be nothing - you can't have a contract where you agree to pay $20 per month without receiving anything in return, you must receive something, even if it is only a peppercorn.

      Poor service is not enough to be breach of contract if they are fulfilling the elements of the contract, only at a lower quality than expected. Unless of course, you've dictated the quality as an element of the consideration.

      So if the PHONECOMPANY salesman says "we will never change these terms," then the terms change, you may be entitled to relief (this is just a simple example at hand).

      The salesman does not need to say the terms will never change, a contract is not valid in the US if the terms have been changed but not agreed to by both parties. That is a federal statute, state law cannot override it, and if they try to force you into arbitration you can flip them the bird and sue for breach of contract. You might even have a shot at suing the state if they push it too much (and of course, you are actually protected by the federal statute). State laws are trumped by federal laws in every case, so state mandated arbitration does not apply when a federal statute is being broken.

      Attempting to change your contract without your consent definitely falls under federal contract law. You cannot sign away your rights, and state laws cannot restrict or eliminate rights granted under federal law.

      --
      Security is mostly a superstition... Avoiding danger is no safer in the long run than outright exposure. - Helen Keller
    16. Re:Great by mysidia · · Score: 5, Insightful

      A clause like that would be so one-sided that attorneys could probably bring a case and claim that the "lawsuit immunity" makes it an unconscionable contract, or makes the document an illegal contract (since it denies a party of their right to avail themselves of legal remedies against breach).

      When the courts see something like that, they are likely to take a punitive stance against the maker for contriving such a one-sided agreement and claiming its a reasonable contract. E.g. Other terms they want to be enforceable are more likely to get stricken too.

      If the whole thing gets found to be an illegal contract it can't be enforced against the consumer. So for example, if the suit was to avoid having to pay a termination fee, such terms might ultimately result in summary judgement against ATT.

      The maker of a contract generally wants severability to be utilized, so if one term is unenforcable, the rest of the agreement stays in full force. But if they're so blatant as to say "YOU CANT EVER SUE us," the courts may be prone to simply ignore it and throw the whole thing out.

    17. Re:Great by mysidia · · Score: 5, Insightful

      How about if the contract says: "You also agree to the terms at http://somedomain.example.com/terms.php?t=3528905325 incorporated herein by reference." ?

      Where, of course, the terms at the URL are constantly being changed. And you only know what they originally said, if you printed them and kept a printout (which 90% of people won't do) ?

      Oh yes, and every 6 months they'll send you a letter by post that says "The terms of service at this URL have been updated. By continuing to use the service, you agree to the changes. Reply to this message or call us to cancel service if you do not agree to the new terms."

      But they won't tell you what the changes are, or even keep record of what/when they changed things. So you have to manually print and re-read the entire thing every 6 months if you want to keep up on the updates.

    18. Re:Great by dave87656 · · Score: 4, Informative

      No system is perfect. And free markets only work if they are free and there is sufficient competition. In "capitalism" it is the job of the government to ensure competition, but, that idea got pretty hammered in a recent administration, which felt it was the job of government to make sure campagne contributors can maintain their monopolies.

    19. Re:Great by T+Murphy · · Score: 4, Insightful

      AT&T might just be trying to make people give up, or at worst follow the rules. It doesn't matter whether the contract is enforceable if few enough (no one?) test it.

      --
      My webcomic
    20. Re:Great by bdsesq · · Score: 4, Insightful

      They want you to think you have no rights and cant do anything.
      Just like the signs in parking garages "Owner is not responsible for......"
      In fact they are responsible. They just want you to think you can't sue them.

  2. Sounds like a great opportunity by palegray.net · · Score: 4, Interesting

    ... for a class-action lawsuit over their attempt at preventing class-action lawsuits.

    --
    512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
    1. Re:Sounds like a great opportunity by SBFCOblivion · · Score: 4, Interesting
      I agree. Years ago PayPal had this in their terms of service. In addition they had a stipulation that you could only sue them in their home state, which I now I forget.

      At the time people were having bogus charges taken out of their accounts, we'll say $100, and because you couldn't form a class action it wasn't worth the money to sue them independently.

      Some people did get together and sue them over not being able to form a class action and it was ruled that their TOS weren't fair or some such.

      I could go dig through my old Cyberlaw book if anyone is interested but I can't remember the specifics off the top of my head.

  3. Only in a thoroughly corrupt society by QuoteMstr · · Score: 5, Insightful

    Only in a thoroughly corrupt society can big corporations get away with saying "you can't sue me because I don't agree to be sued", while other big corporations win judgments against common people for thousands of times the actual damages. I thought only sovereign nations were supposed to be able to just decline a lawsuit.

    1. Re:Only in a thoroughly corrupt society by ScrewMaster · · Score: 4, Informative

      This will not hold water in the courts. Don't panic.

      Probably not. The problem is that it raises the bar, and makes it that much harder to actually get to court. I presume that's the whole idea.

      --
      The higher the technology, the sharper that two-edged sword.
    2. Re:Only in a thoroughly corrupt society by TubeSteak · · Score: 5, Insightful

      Only in a thoroughly corrupt society can big corporations get away with saying "you can't sue me because I don't agree to be sued",

      You can (or can't) sue a company based on your State's laws.
      Just because AT&T puts it in the contract doesn't make it enforceable.
      If your State allows a ToS to ban class actions, change your laws.

      --
      [Fuck Beta]
      o0t!
    3. Re:Only in a thoroughly corrupt society by QuoteMstr · · Score: 5, Insightful

      My point is that there is something terribly wrong when laws allow companies to decline liability via a standard form contract. The practice obviously favors large corporate interests over ordinary people. When companies large enough to have legal departments start to be dominant force shaping policy, we know we're the sick man of the world.

    4. Re:Only in a thoroughly corrupt society by Anonymous Coward · · Score: 5, Funny

      Probably not. The problem is that it raises the bar, and makes it that much harder to actually get to court. I presume that's the whole idea.

      When AT&T said more bars, that's not quite what I had in mind.

    5. Re:Only in a thoroughly corrupt society by QuoteMstr · · Score: 4, Insightful

      consumer

      I hate this word. The word just reeks of passivism, acceptance, and defeat. With apologies to George Orwell, all a consumer does is choose which color of corporate boot is stamping on his face forever.

      I prefer the word "citizen".

    6. Re:Only in a thoroughly corrupt society by shadowofwind · · Score: 5, Interesting

      This will not hold water in the courts. Don't panic.

      Probably not. The problem is that it raises the bar, and makes it that much harder to actually get to court. I presume that's the whole idea.

      Right. A few years ago when my wife sued PayPal to recover $1200 they stole from her, the judge threw it out both on grounds of wrong jurisdiction and that the PayPal contract says they can't be sued. The fact that PayPal just flat took the money and repeatedly lied about even having it, did not outweigh the fine print in the PayPal user agreement in the mind of that particular judge. (This was back before eBay bought PayPal, and their internal policies may have been more corrupt then.) Fortunately, PayPal did promptly give the money back (with no explanation) when a state Attorney General inquired about the case. So the system isn't completely broken, and the outcome was right. And at least the lawsuit forced PayPal to pay a lawyer for a few hours to show up in court. But the point is the bogus clause in the user agreement did stop the lawsuit in this case. (The jurisdiction question was a separate issue - there was some contradictory guidance about what state to sue in since the theft occurred online.)

    7. Re:Only in a thoroughly corrupt society by swv3752 · · Score: 4, Insightful

      Oh great. You can quit, and maybe get a job somewhere else with the same type of contracts. Having the choice between eating a shit sandwich and a shit wrap, still means you are eating shit and flour.

      --
      Just a Tuna in the Sea of Life
  4. Re: phirst post! by jamstar7 · · Score: 4, Informative

    Sure you can. Just write that into a binding contract that both parties agree to.

    --
    Understanding the scope of the problem is the first step on the path to true panic.
  5. Re: phirst post! by Shin-LaC · · Score: 5, Insightful

    Contracts are weaker than the law. If your contract has terms that are forbidden by law, those terms are void (and possibly the entire contract, and you might be liable for punitive damages).

    Of course, I have no idea if US law has such provisions against attempts to forbid class actions.

  6. We don't have to care. by symbolset · · Score: 5, Funny

    We're the phone company.

    --
    Help stamp out iliturcy.
  7. Aren't they required to honour the original? by MartinSchou · · Score: 5, Interesting

    Aren't they, as cosigners, required to honour the original contract?

    Someone else wrote "great, now I can get out of my contract for free", but are you really required to rip up the contract you already have? That they won't renew the existing contract is fine, but ... telling you to rip the one you have up?

    I'm fairly certain you couldn't do it the other way around.

    "AT&T? Hi, I'm just calling you to tell you, that I've faxed over the new terms of our contract, stipulating that I get to spank your CEO in public every Saturday afternoon. You can either sign it or release me from my contract. Yours truly $name."

    Somehow I think that'd just be ignored by AT&T and the courts alike.

  8. Re:Hey guys... by stagg · · Score: 5, Informative

    "Notwithstanding the foregoing, either party may bring an individual action in small claims court. YOU AGREE THAT, BY ENTERING INTO THIS AGREEMENT, YOU AND AT&T ARE EACH WAIVING THE RIGHT TO A TRIAL BY JURY AND TO PARTICIPATE IN A CLASS ACTION WITH RESPECT TO ARBITRATION CLAIMS. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this provision. This arbitration provision shall survive termination of this Agreement." I assume this is the part being referenced.

  9. The Free Market Punishes Consumers Again by MarkvW · · Score: 4, Interesting

    This is a great reason for public-owned internet services. Once they get monopoly power, you feel the business end of their business.

  10. Re: phirst post! by GoodNicksAreTaken · · Score: 4, Informative

    State law in Montana forbids waiving your right to a lawsuit and forcing you in to arbitration. I only know this because I was assisting my mom, a lawyer, with finding a phone at Verizon to take to Europe and when they had her sign their agreement she pointedly told the person behind the counter, "You know this isn't legal in Montana!" I assume other states have similar provisions on the books.

  11. Contract buggy blue, no suing back! by Arancaytar · · Score: 4, Funny

    Forgive my non-lawyer ignorance, but can you actually forbid someone from suing you? As a retroactive clause in a contract, even?

    "By downloading this pirated video off BitTorrent, you have implicitly agreed to forfeit any and all options of initiating a lawsuit for copyright infringement."

    Wonder if that would work.

    Hint: Probably not. :P

  12. Re:Monopoly on DSL != monopoly on Internet access by MadnessASAP · · Score: 4, Insightful

    Yes, It's like going to prison and having the choice of being raped ever night by either Bubba OR Mo, you have 2 great choices for your raping preference, you should feel blessed to live in a country that will allow you the freedom to choose who will violate your asshole.

    --
    I may agree with what you say, but I will defend to the death your right to face the consequences of saying it.
  13. Re: phirst post! by jeepien · · Score: 4, Insightful

    Likely this is more to discourage people who don't know any better from filing a class action suit, but it won't prevent them.

    In fact, since this change affects every AT&T customer, this just may be a perfect cause FOR a class action suit.

  14. Already tried, already failed by Todd+Knarr · · Score: 5, Informative

    AT&T/Cingular already tried these terms with their cel-phone service. They failed.

  15. Re:Monopoly on DSL != monopoly on Internet access by Foobar+of+Borg · · Score: 5, Funny

    Yes, It's like going to prison and having the choice of being raped ever night by either Bubba OR Mo, you have 2 great choices for your raping preference, you should feel blessed to live in a country that will allow you the freedom to choose who will violate your asshole.

    You have also done a very good job of describing our two party political system. ^_^

    --
    Similar to the upcoming US election results
  16. Good. Fewer class-action suits helps the public by Kohath · · Score: 5, Insightful

    Class action lawsuits are almost always a complete abuse of the legal system. They deliver huge multi-million dollar profits to lawyers. The "class" of plaintiffs usually gets a coupon or something worth less than $5. And the rest of us innocent people who just want phone service (or whatever) are forced to pay an extra de facto "tax" to cover the costs of the huge payout to the lawyers -- lawyers who are essentially free riders, who produced exactly nothing of practical value in return for the money they've taken.

    In theory, class-action lawsuits protect consumers. But the current system harms consumers much, much more than it helps us.

    1. Re:Good. Fewer class-action suits helps the public by QuoteMstr · · Score: 4, Insightful

      Class action lawsuits could be improved, sure, but even in their present form, they discourage companies from performing certain actions, and that itself as value.

  17. Re:"Pray I do not alter it any further ..." by Archangel+Michael · · Score: 4, Interesting

    I love how they change the contract after you have agreed to it.

    Send in a notice with your next payment of your bill, that you've revised the contract additionally, and include provisions that the next time they change the contract, they owe you all payments previously remitted on your part, or something equally absurd. Make sure that you include that acceptance of payment constitutes agreement to the new terms and conditions. If they would like to cancel your account that they have 15 days to notify you of that cancelation of the account, and you are not liable for the terms of the previous contract, since they started renegotiations of the terms of the contract.

    ALL it takes is being able to play the same stupid games they play, only play them better.

    --
    Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
  18. Re:Again, only in america. by freedom_india · · Score: 4, Interesting

    I agree with you.
    Andrew jackson and Woodrow Wilson would be turning in their graves, while JP Morgan would be clapping.
    In India, the reserve bank forced banks to cross-accept debit cards in their ATMs without surcharges. Naturally banks balked at this, but the reserve bank simply bulldozed over them. Now i can use any bank's card on ANY ATM without any surcharge. What's more the Reserve bank has forced them to put this on display in all of their ATMs.
    Secondly, the local telephone companies wanted the ability to trash a consumer's credit score based on his telephone bill payment. The courts refused it.
    Indian laws specifically make the corporate veil invisible in many criminal cases. So there are no "settlements" here. The CEO is prosecuted and jailed. No golden parachute crap, no evading responsibility.
    My contract with my 16Mbps broadband provider specifically states that for every day the service is out, the company prorates the rental amount and credits my account with the money. Similarly iam free to use torrents, or any other crap. No restrictions.
    if the speed goes below 12Mbps, the company of forced to charge me only for that plan rates.
    Of course the company didn't like these terms: tough luck. The LAW and courts included this clause by force.
    Preventing access to courts by arbitration is prohibited by law. Our Supreme court once thundered against this and put the CEO in jail for this.

    --
    "Doing what i can, with what i have." ~ Burt Gummer
  19. I am a lawyer, and under California law... by Anonymous Coward · · Score: 4, Informative
    ... courts have specifically held that you can't contractually waive the right to bring or participate in class actions for things like cell phone contracts, where the lawsuits probably aren't financially worth bringing one at a time. For two cases discussing this, see

    I'm not sure how it works in other states.