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Providers Can't Use Mouse Print To Ban Class Actions
Supreme Court refuses to hear T-Mobile appeal
by Karl Bode 12:18PM Tuesday May 27 2008 Tipped by FFH See Profile
Over the past year or two I've been discussing how a number of companies (AT&T, Comcast, Verizon and T-Mobile come to mind) have been trying to erode your legal rights via fine print. By burying legalese in your contract, carriers attempt to prevent you from participating in class action lawsuits. Instead of allowing you your day in court, the companies require that customers participate in mandatory binding arbitration (an outside the court settlement system where you lose most of the time).

The courts so far have ruled against such fine print trickery. Kind of. Last October, a Federal appeals court ruled that courts can refuse to enforce arbitration clauses if they include bans on class actions. As part of an effort to scrap a California class action, T-Mobile appealed, but the Supreme Court today rejected the attempt. In short, State laws that prohibit such fine print clauses will remain intact.

In other states, the arbitration game will continue. Obviously arbitration companies will be more loyal to their clients than to you, but a recent report by Public Citizen showed just how loyal. The report stated that one arbitration outfit frequently used by credit card companies ruled in favor of its corporate clients 95% of the time, if not more:
quote:
Click for full size
Between Jan. 1, 2003, and March 31, 2007, arbitrators working for the Minneapolis-based NAF ruled for businesses in 95 percent of the California cases examined. In fact, 90 percent of the NAF cases were handled by just 28 arbitrators, who awarded businesses $185 million. One arbitrator handled 68 cases in a single day - an average of one every seven minutes, assuming an eight-hour day - and ruled for the business in every case, awarding 100 percent of the money requested.
Of course, that's not what the National Arbitration Forum website tells consumers who are trying to understand the process. The site soothes consumers by noting that "a 2003 American Bar Association study of employment arbitration found that claimants prevailed more often and received larger awards in arbitration than in litigation."

Personally I'm torn between disliking the sleazy lawyers at telecom carriers who love to "service" (in the George Carlin sense of the word) consumers with fine print, and the class action process that delivers millions to lawyers but a pittance to actual consumers. Still, keeping the class action system alive keeps companies more accountable than letting them have an easy and inexpensive win in dog & pony arbitration.

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nasadude

join:2001-10-05
Rockville, MD

1 edit

uh oh

ye gods, this can't stand - it's a pro-consumer ruling.

quick, call Seymor Cash (R-BigBiz) and Ivanna Bribe (D-Demforsale)and tell them to got on some legislation to fix what these activist courts have done!

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Word of warning for those who want to start a class action

The USSC made "no class action lawsuit" provisions in cell phone contracts non-enforceable ONLY in states that prohibit them. Not all states prohibit having a "no class action lawsuit" provision in a contract. So, if you are contemplating starting up one, the lawyer in YOUR state will need to investigate state law on the issue.
--
My BLOG .. .. Internet News .. .. My Web Page
mlundin

join:2001-03-27
Lawrence, KS

Yay!

Score one for the little guy! Not over though... still a long way to go.
ctggzg
Premium
join:2005-02-11
USA
kudos:2

Re: Yay!

No, score one for gold-diggers and frivolous lawsuits.

texans20
Premium
join:2002-09-28
Texas!

Re: Yay!

said by ctggzg:

No, score one for gold-diggers and frivolous lawsuits.
Exactly, most class action lawsuits do nothing but drive the prices we pay up. I get several notifications per year of me being involved somehow in some stupid class action suit, and I have yet to get anything worth while. The latest class action was with some credit monitoring thing I signed up for a couple of years ago, all I get is one free month of service. However, rest assured, the lawyers involved received millions of dollars in compensation.
--
"I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies." Thomas Jefferson

hopeflicker
Capitalism breeds greed
Premium
join:2003-04-03
Long Beach, CA
kudos:1

1 recommendation

Re: Yay!

said by texans20:

said by ctggzg:

No, score one for gold-diggers and frivolous lawsuits.
Exactly, most class action lawsuits do nothing but drive the prices we pay up. I get several notifications per year of me being involved somehow in some stupid class action suit, and I have yet to get anything worth while. The latest class action was with some credit monitoring thing I signed up for a couple of years ago, all I get is one free month of service. However, rest assured, the lawyers involved received millions of dollars in compensation.
So do we just allow these corporations to walk all over us?
--
Religion does three things quite effectively: Divides people, Controls people, Deludes people.
viperlmw
Premium
join:2005-01-25

Re: Yay!

said by hopeflicker:

said by texans20:

said by ctggzg:

No, score one for gold-diggers and frivolous lawsuits.
Exactly, most class action lawsuits do nothing but drive the prices we pay up. I get several notifications per year of me being involved somehow in some stupid class action suit, and I have yet to get anything worth while. The latest class action was with some credit monitoring thing I signed up for a couple of years ago, all I get is one free month of service. However, rest assured, the lawyers involved received millions of dollars in compensation.
So do we just allow these corporations to walk all over us?
That's what 'free market'ers seem to want. Many fail to realize that the idea behind a 'class action' is not necessarily to realize large damage awards for the members of the class, but to provide large enough punitive awards to the class as a whole to deter the corporation from doing wrong/illegal/damaging activities.

hopeflicker
Capitalism breeds greed
Premium
join:2003-04-03
Long Beach, CA
kudos:1

Re: Yay!

I, for one, do not care if i was to receive a small $$$ amount from a class action suit. I would just hope that a suit alone would change a corporations business practice. If lawyers win big bucks, so what. As long as the shady business practice ends.
--
Religion does three things quite effectively: Divides people, Controls people, Deludes people.
rahvin112

join:2002-05-24
Sandy, UT

Re: Yay!

And that's the point of class action suits. In very rare cases are the actual complainants looking for large damage awards. In most cases class actions are launched and prosecuted with the understanding that the claimants will get little other than a promise of behavior change by the corporation while the lawyers get a nice payout for taking the risk.

Do I agree with every class action? No, but in the vast majority of cases they are used the advantage of consumers in a system where government is no longer protecting consumer rights.

FiL
Premium
join:2005-08-16
Silver Spring, MD

Re: Yay!

Erin Brokavich, anyone?
SilverSurfer1

join:2007-08-19
Sure, because anytime anything other than a multi-billion dollar corp stands to gain any kind of money, it's a bad thing. The U.S. should just allow corps to run amok and do precisely whatever benefits their bottom line regardless of laws or who gets hurt. It's just the "gold diggers," after all filing "frivolous" suits.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
Generally, for a class action to occur, it can hardly be frivolous. Now, the results to the class members are usually frivolous, but the guilty company is usually ordered to change it's evil ways.

Just don't expect to get rich off one, unless you're a lawyer.
--
"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!)
ossito16

join:2004-07-31
Whiting, IN

Castro, was he right?

For years I have been reading DSLr forums. It seems these corporations get worse every month in the things they do to squeeze every dollar from the people. I can definitely see why companies need to be nationalized if they get to big. A "no class action" clause should not be allowed EVER. Why do we need laws against exploitation by the companies? Also, the lawyers should not be allowed to profit so much for pushing class action lawsuits. Any money won should go back to customers and maybe the school systems.

texans20
Premium
join:2002-09-28
Texas!

1 recommendation

Re: Castro, was he right?

said by ossito16:

For years I have been reading DSLr forums. It seems these corporations get worse every month in the things they do to squeeze every dollar from the people. I can definitely see why companies need to be nationalized if they get to big. A "no class action" clause should not be allowed EVER. Why do we need laws against exploitation by the companies? Also, the lawyers should not be allowed to profit so much for pushing class action lawsuits. Any money won should go back to customers and maybe the school systems.
Move to North Korea, every corporation there is nationalized.
--
"I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies." Thomas Jefferson
ossito16

join:2004-07-31
Whiting, IN

1 edit

Re: Castro, was he right?

I guess I came off wrong, I was not a nationalized all Corp., just the ones that repeatedly try to circumvent (illegally or on the line legal) the rules and laws that are in place to protect the people using the services of these companies. Why use fine print, why use opt-out instead of opt-in choices, why do we need to have labor laws for "children". I'm not saying we need to nationalize Starbucks. Only the ones who blatantly don't give a f#%! about the people and believe they do not have to answer to anyone as long as they can keep lobbying (indirect kickbacks,etc) I would even go for temporary nationalization of a company and then sell it to someone else who has some sense.
ender7074

join:2006-11-21
Saint Louis, MO
Wow. Just wow. Nationalize all corporations? That has got to be one of the worst ideas I have ever heard. Look at such places where that has happened or is happening right now. Former Soviet Union, N. Korea, Cuba, and thats just a start. Their economies were/are terrible and the people are crushed at each step. Just a horrible idea.

texans20
Premium
join:2002-09-28
Texas!

Re: Castro, was he right?

said by ender7074:

Wow. Just wow. Nationalize all corporations? That has got to be one of the worst ideas I have ever heard. Look at such places where that has happened or is happening right now. Former Soviet Union, N. Korea, Cuba, and thats just a start. Their economies were/are terrible and the people are crushed at each step. Just a horrible idea.
Yes but it fits the lazy socialist well. See, the lazy socialist generally tends to be a loser in life, especially economically speaking. In America, one can work hard and become well off. In countries like Cuba, though, regardless of how hard you work or how marketable your skills are you are worth as much as everyone else. The lazy socialist would rather bring everyone down to his or her level instead of working hard to gain new skills or polish current skills to make him or her more marketable.

I have yet to meet anyone doing well in life with extreme socialist ideas such as nationalizing corporations. They tend to be unemployed, undereducated, and the type of personality that blames everything negative on everyone else. They hang out at coffee houses on weekday afternoons when they should be working.
--
"I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies." Thomas Jefferson
rahvin112

join:2002-05-24
Sandy, UT

Re: Castro, was he right?

It's not socialism, it's called communism. A certain very famous SOCIALIST wrote a book about communism called animal farm.

Socialism is about a society creating a social safety net where people at the bottom have at least basic needs accounted for during the toughest of times. Please don't equate socialism and communism.

footballdude
Premium
join:2002-08-13
Imperial, MO

Re: Castro, was he right?

said by rahvin112:

Please don't equate socialism and communism.
The only real difference is that communists shoot people that try to leave.

Remember communist Russia called themselves the Soviet Socialist Republic.
--
It's a trick. Get an axe. - Ash

SLD
Premium
join:2002-04-17
San Francisco, CA

1 edit

Re: Castro, was he right?

Yes, France and Communist Russia are so similar ...
Oh, and the US is a republic - does that make us like the old Soviets?

footballdude
Premium
join:2002-08-13
Imperial, MO

Re: Castro, was he right?

said by SLD:

Oh, and the US is a republic - does that make us like the old Soviets?
If the socialists had their way, yes.
--
It's a trick. Get an axe. - Ash

SLD
Premium
join:2002-04-17
San Francisco, CA

Re: Castro, was he right?

Time for you to travel a bit beyond Missouri.

a333
A hot cup of integrals please

join:2007-06-12
Rego Park, NY
Reviews:
·T-Mobile US
·Verizon Online DSL
·Cingular Wireless

2 edits

Re: Castro, was he right?

Guys, get real. IMHO, there isn't a real difference... the commies/socies/whatever you want to label them as are at least open about it. Our gov't isn't really any better, when we spend half our resources bombing other countries and trumpeting our fake 'democracy', while spending the other half on listening into our own citizens and occasionally strip-searching them.
And yes, the 'democracy' we trumpet IS fake.. we're a republic, and anyone that attempts to gloss that over with the shiny coating of democracy is an idiot who needs to take high school history over again.
And for crissake, keep an open mind to other ideas. Funny how we expect N. Korea/China/Former commies to accept our "democratic"/liberal ways, when we ourselves edge away from their ideals as if it was a bad disease.
Now, back on topic: I think it's at least a step in the right direction, although hardly a setback for the 'evil-uns'
EPS4

join:2008-02-13
Hingham, MA
Bah, the term has meant the same thing as Communist as long as it's also had the meaning that you're trying to declare is the sole meaning... The USSR, the Union of Soviet Socialist Republics, for example.

tapeloop
Not bad at all, really.
Premium
join:2004-06-27
Airstrip One
kudos:1

Re: Castro, was he right?

said by EPS4:

Bah, the term has meant the same thing as Communist as long as it's also had the meaning that you're trying to declare is the sole meaning... The USSR, the Union of Soviet Socialist Republics, for example.
Communism is a form of socialism, but that doesn't mean that all socialists are communists. The two terms aren't always directly interchangeable, much to the chagrin of pundits.
ossito16

join:2004-07-31
Whiting, IN
not saying nationalized all companies, just the ones who continue to act ad though we the people owe them something. Maybe even give state attorneys more power (zero interference from federal branches) and let them loose on these companies. All winnings go to the states. Just like the tobacco industry.

battleop

join:2005-09-28
00000

Time for Plan B

"In short, such fine print bans on class action participation remain intact if your state laws prohibit them."

So clearly the next course of action by these companies is to fire up the great lobby machine and have these laws changed.

woody7
Premium
join:2000-10-13
Torrance, CA

hmmmm....

Why is it that whenever there is something pro consumer, it always turns into a "scum sucking only lawyers are going to make money and we all will pay in the end for it " the trolls and corporate "shills" seem to always take a pro consumer as a way to vent on the corporations behalf. If the corporations weren't such greedy a$$ holes, this wouldn't be an issue. Yes I understand they are subsidizing the free or almost free phones.
--
BlooMe

ScottMo
Once in a Lifetime
Premium,MVM
join:2000-12-15
Stony Brook, NY

Flawed jouralism

The "proof" that arbitration is more favorable to companies than to be individuals shouldn't be used.

First the report reads:
Major Arbitration Firm in California Rules Against Consumers 94 Percent of the Time, Uses Arbitration as Debt Collection Mechanism, New Report Shows
And that somehow morphs into "The report stated that one arbitration outfit frequently used by credit card companies ruled in favor of its corporate clients 95% of the time, if not more". That's not what it said. How did 94% become "95% of the time, if not more"

And secondly (and more to the point) the cases that were brought to arbitration were largely by the credit card companies (or those who bought debt from them) as a means of collecting debts and that those debts were the ones the credit card companies were sure they were going to win. So, the Public Citizen report shows that if you default to a credit card company and go to arbitration, you're most likely going to lose. Key word is "default". If a consumer defaults on a credit card balance, chances are they're going to lose in arbitration. So how does that extrapolate into "eroding your rights"? It doesn't.

cdru
Go Colts
Premium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:7

Re: Flawed jouralism

Hey now. The general public shouldn't be concerned about the facts of the hearings. All they need to know is a cliff note summary of FUD.

I thought pretty much the same thing when I read the summary above. Just because an arbitrator finds one way an overwhelmingly high percentage of the time doesn't necessarily mean that something is wrong.

I would expect arbitration for defaulted credit cards to mostly go with the credit card companies. By the time that arbitration (or a lawsuit) would be necessary the CC company has already looked at 1.) do they really think that they are right, 2.) do they think that they can win, and 3.) if they do win, will they have a chance to get any of the money that they do win. If any of the questions aren't sufficiently affirmative, then they may just write it off, make a settlement, etc. It may never even get to arbitration.

Old Coot

@gtmc.net

Providers can't use mouse print to ban class actions

Why not? the US government has imposed this on railway workers for years.

Dakota2255

@charter.com

FTC

At one time our government did protect its citizens from big corporations. The Federal Trade Commission had the power and ability to force corporations involved in interstate commerce to do the right thing with threats of fines and increased regulations. Today, the FTC (as are most other Federal consumer organizations) are toothless bureaucracies that do their best not to upset corporations for fear the corporations will report them to any one of a number of Congressmen that are on the corporate payroll. Our politicians have sold out to corporate America and there's really nothing we can do about it. Middle-class jobs will continue to be sent overseas while corporate executives become even richer. We the people have no one looking our for us or our interests. To both the politicians and the corporations, we're nothing but a source of money.

Guspaz
Guspaz
Premium,MVM
join:2001-11-05
Montreal, QC
kudos:23

Class Action vs Arbitration

Thing is, class action suits require the company to pay out (typically) millions, and cease the practice they're being sued about. Even if the consumer doesn't get anything, the corporation is being punished.