Forgot your password?
typodupeerror
The Courts Government Communications America Online News Technology Your Rights Online

Courts Reject Tech Corporation Bans on Class Action Suits 102

Posted by Zonk
from the that's-going-to-get-ugly-fast dept.
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.'"
This discussion has been archived. No new comments can be posted.

Courts Reject Tech Corporation Bans on Class Action Suits

Comments Filter:
  • by shutupkevin (1127139) on Friday July 13, 2007 @11:00AM (#19849721)
    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.
    • by Midnight Thunder (17205) on Friday July 13, 2007 @11:29AM (#19850099) Homepage Journal
      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.

      This is why I believe companies should be required to show 'total costs' in any marketing and documentation. Total costs would be described as what the customer pays at the end of the month if they don't knowingly opt-in to extras or stay within the bounds of the base package. Extras whether they are roaming, extra functionality and on should also be described in a manner where the customer does not need a degree to understand. For example:
          - base fee, including 200 minutes: $20 (all taxes, and made up taxes are included in this figure)
          - additional per minutes charge $0.10, I used 10 extra
          - roaming charge per minute $0.20, for area X, I used 0
          - total fee would be $21.00
      Easy to calculate, easy to discuss. If the companies billing systems are so complicated that even your support can't understand, then there is an issue.
         
      • It's actually getting worse, at least for me. My verizon bill used to show every call I made and which ones were over the minutes included in my package. Recently they've "downsized" their bill and all they show you is a total of how many minutes you went over (I suppose we're just supposed to trust them now?) and the total cost that you owe them. The full bill is still available for those tech-savvy persistent customers that actually have the time to set up a verizon online account and look for their bil
        • by Ash Vince (602485)
          Can you do anything about it if they get your bill wrong? Can you prove that you didnt make the calls in question or do they just get to insist you made them and charge you anyway?
        • by janrinok (846318)
          I accept the point that you are making, but have you any examples where the company has made 'mistakes' i.e. where it cannot be 'trusted'? If the end result is that they are making no more mistakes now than they ever did (and that such mistakes are rectified when identified) then there might be a good case for their change to the billing format if they are saving you, the customer, money. But I suspect that you are right, because people do not see their bill they no longer know what mistakes are being mad
    • Re: (Score:3, Interesting)

      by cecille (583022)
      Not even the sales people understand. I just signed on to a plan with Bell. They had recently re-done their plans and now they were something like "15 dollars less", but now include a "network fee" of...you guessed it...round about the amount the plan decreased by in the first place. I could not for the life of me get the sales person to actually explain what the hell I was paying for in the contract fee if it wasn't actually to use their network for my cell service. IE...if I don't pay the "network fee
  • Just a reminder... (Score:5, Insightful)

    by DogDude (805747) on Friday July 13, 2007 @11:02AM (#19849749) Homepage
    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.
    • by PhxBlue (562201)
      You're still in a stronger position if you negotiate the contract in the first place. The better thing to remember is: It's a contract, and you can negotiate it before you sign it. The cell phone company may tell you where to stick it, and they're not going to change their contract for anyone; or they might let you add or remove terms for your individual contract, because it means they won't have to make those changes for everybody.
      • '' You're still in a stronger position if you negotiate the contract in the first place. The better thing to remember is: It's a contract, and you can negotiate it before you sign it. ''

        I always thought whatever is in a contract with a consumer who _hasn't_ negotiated the contract is subject to consumer protection laws, and lots of things that would be entirely legal in a contract that could be held against you just don't count because of consumer protection laws. But as soon as you negotiate the contract,
        • Re: (Score:1, Informative)

          by Anonymous Coward
          verily so in Wisconsin. The burden of establishing the meaning of a faulty contract is placed on the party that drafted the contract. If you just sign, you are less at fault than if you contribute to the language (or lack thereof) in the contract.
      • by pintpusher (854001) on Friday July 13, 2007 @11:57AM (#19850427) Journal

        The better thing to remember is: It's a contract, and you can negotiate it before you sign it.
        I had an interesting adventure with a major corp recently. I was being courted by a major food service vendor who has recently moved into this area. I'm a pretty small fish -- maybe $1,000 a week in wholesale grocery supplies, but their sales rep has a couple major accounts on either side of me and it was easy for him to stop in. So we went through the whole deal of pricing everything out and determined that we could save a reasonable amount by using this company.

        So out comes the "application". I've been in the restaurant business for a few years now and have some idea of what standard practice is... anyway, I decided I didn't want credit. I wanted to just purchase COD. It's really easier in the long run in many ways -- less book-keeping, easier to budget money, instant credit, no messing with chargebacks or mystery invoices etc etc etc. So I start reading through the various agreements they expect me to sign. I looked at the salesman and said "you know I want COD only?" He agreed it was ridiculous. So I told him I'd mark it up over the next few days and then he could pick it up.

        So there were three agreements. One was a personal guarantee, which I never sign, ever. So a big line through that one. The second was a statement about my legal right to purchase wholesale in the state (no biggie, standard stuff and a tax id number). The third was essentially a credit app with some extra stuff thrown in relating to how to deal with bad product and so forth. So I start lining through stuff that doesn't apply to COD, stuff that puts all of my company's assets on the line for groceries. I rewrite a couple of other bits to make them more palatable to me, like fixing the court of jurisdiction to be my state, not theirs; changing the part about 3 days written notice by certified return receipt if we get bad product; etc etc. When it was all done, I'd probably struck a good 60% of the contract and rewritten another 20%, and then I signed it.

        About two weeks go by and we hear from the salesman (you should have seen the look on his face when he picked the thing up). The credit department (I don't want credit) had denied my application, not because of all the stuff in the contract that I'd marked up, but because I hadn't signed the personal guarantee. go figure. So all I can assume is they know their contract is onerous and were willing to let it go so long as I put all my personal crap on the line for a COD account. needless to say, I'm still using my old provider who loves me and gets paid every week for seven years...

        I think I'll write a "service provider agreement" and make anyone who wants to provide me a service sign it.... hmmm... that might be fun ;)
        • by DogDude (805747)
          I tend to sign those things because I've never seen that stuff enforced. If they don't agree to do something, and back it up with "the contract says so", I explain that they're going to ignore the contract, or not do business with me.

          I thought about writing up my own terms for anything I sign (sign up for a phone contract, and hand them my standard addendums along with the signed contract, for example), but it would never go through. That's why I sign and worry about it later (unless of course, it's s
          • Re: (Score:3, Insightful)

            by Nimey (114278)

            I tend to sign those things because I've never seen that stuff enforced. If they don't agree to do something, and back it up with "the contract says so", I explain that they're going to ignore the contract, or not do business with me.


            Let us know how that works when you get sued for breach of contract. kthxbye.
        • Re: (Score:2, Insightful)

          by nomadic (141991)
          The credit department (I don't want credit) had denied my application, not because of all the stuff in the contract that I'd marked up, but because I hadn't signed the personal guarantee.

          They also probably decided that someone who was going to bother them over every single little aspect of a contract was probably more trouble than they were worth as a customer.
          • sorry so long in replying...

            You're probably right to a point. I find it a strangely satisfying way to weed out people who actually want to do business with me. Those who put up with a little flack at the front end end up with a long term relationship. Probably 90% of my vendors have been with me for 5+ years and have become good friends at the same time (at least in the business sense). Too bad for the others...

            i have to say, though, if you'd seen the crap they wanted me to agree to for a COD account, you'd
      • That lets you offer amendments to the proposed agreement. I presume it must be there, or it isn't really a contract, right?

        Unless you happen to be dealing with someone who's large enough to have a legal department which reviews such things regularly, or you're doing so much business (or have a susbtantially large transaction) that they really are negotiating one on one, there is essentially no reason for them to accept anything other than the boilerplate version. Having a junior staff lawyer at $125/hr revi
    • by mchale (104743)
      The clauses in contracts requiring arbitration are bad news.

      There are two basic kinds of arbitration -- mandatory and voluntary. Mandatory arbitration, ironically, is less legally binding. Precendent in the US is that contractual arbitration clauses constitute voluntary arbitration, and as such, *are* legally binding. What that means is that if you have a problem with the company, you have to go to whatever arbitration agency the company uses, and try to argue your case to an arbiter who has a vested intere
  • by shadowspar (59136) on Friday July 13, 2007 @11:02AM (#19849751) Homepage

    Interestingly, the Supreme Court of Canada just released [www.cbc.ca] a decision [umontreal.ca] 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.

    • by Yuan-Lung (582630)
      Interestingly, the Supreme Court of Canada just released a decision that cuts the opposite way.


      From the article linked:

      Ontario and Quebec have since passed laws saying companies cannot implement mandatory arbitration clauses.
      The Supreme Court wrote that the laws are not retroactive in Dumoulin's case.


      It seems that the law makers are reaching the same decision what companies cannot have mandatory arbitration clauses, just that the supreme court won't let it it retroactively affect this case. Jus
  • you can't sign away your rights, so such terms are never enforceable. I'm surprised as litigious a place as the USA still allows it.

    Other than Washington, that is...
    • Eh. We "allow" it, but it seldom works; if you can argue that they didn't uphold their end of the bargain, then the court can allow the suit to progress...This is how people sue when they sign a waiver of their legal right to sue.

      The right to sue anyone for anything is practically enshrined in the Constitution, and considering the number of lawyers in the government, it's no surprise.
    • by arivanov (12034)
      That does not prevent some companies in the UK from still trying to make you sign away your rights. This is especially valid for smaller companies which are often using a boilerplate US EULA on EU products. Unfortunately they are hardly ever challenged on this in the UK.
    • by debrain (29228)
      you can't sign away your rights, so such terms are never enforceable. I'm surprised as litigious a place as the USA still allows it.

      See: Release [wikipedia.org].

      As long as there's a quid pro quo, c'est la vie, so to speak.
      • by bloobloo (957543)
        You can not release your statutory rights. Moreover, from the DTI's website: The Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999 No 2083) provide that a term which has not been individually negotiated in a consumer contract is unfair (and hence non-binding on the consumer) if, contrary to the requirement of good faith, it causes a significant imbalance in the rights and obligations of the parties to the detriment of the consumer.
        • by debrain (29228)
          As I understand it, you can release your statutory rights, unless the are inalienable. We may be talking about separate things, but allow me to elaborate on what I'm trying to convey.

          For example, you may have a statutory right to sue an insurance company because they breached a statutory obligation to pay for your medical benefits. However, if they settle the case (i.e. accept a sum of money in exchange for a release), the provision of a release intrinsically waives your statutory right to sue. In other wor
          • Not entirely. For instance, I am suing my landlord over failure to return security deposit. He says it was for professional cleaning of the carpet. Cleaning which occurred after I had the carpets professionally cleaned, paid invoice sent to him, and the carpet was recorded as 'clean' on the moveout inspection.

            There are all sorts of other arguments, but the contention is this, that no fees which are nonrefundable can be counted as part of a security deposit. As in, if you want a mandatory cleaning fee, it's

    • But we don't have a Class Action 'ability' to sign away.
    • Re: (Score:2, Funny)

      by armanox (826486)
      Of course not. UK citizens don't have rights to sign away *ducks and covers*
  • by Anonymous Coward
    I'm one of those wacky people who actually reads the contract before signing. T-Mobile has a similar clause, requiring me to give up the right to both individual and class-action law suits in favor of arbitration.
  • by StandardCell (589682) on Friday July 13, 2007 @11:07AM (#19849825)
    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.
    • by stinerman (812158)
      You already said it in your subject line: "Unfortunately, this is very common".

      These contracts are more than "very common", they are the rule. Anything that involves a service will have a one-sided contract like this. As a previous poster said:

      And before any wise-ass comes back with "then don't sign it", try living with[out] a cell phone, credit card, phone service, bank account, etc, etc, etc..

      You literally have no recourse in most of these cases other than to sue. And, of course, if you don't have the
      • by dgatwood (11270)

        These contracts are more than "very common", they are the rule. Anything that involves a service will have a one-sided contract like this.

        Fortunately, you can't give up your right to sue someone. You can always still sue them. You may not win because of that piece of paper you signed, but even if all their lawyer does is bring in the contract and point out that clause, they will still have to eat the cost of defending themselves, which I guarantee is a LOT more than the cost of binding arbitration. T

    • by plague3106 (71849)
      Except that limits on being able to sue don't usually get held up. No court would uphold a contract where I can beat you senseless whenever I wanted for $500. Its simply too one sided. So are provisions removing the ability to sue and to use an arbitrator agreeable to the company.
    • by Renraku (518261)
      Its really difficult to sign away your basic rights. Suing a person or company goes along with one of those basic rights.

      "You can't sue us for any reason" should automatically invalidate all of a EULA/contract. Even the cancellation fees and other bullshit.
    • 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.

      Oh, give it up. The fact of the matter is that nearly all of us when signing such a contract are rank amateurs with a limited amount of time to make a decision facing professional contact-drafters who have been at it for years. It's vary far from an equal contest. Anyway, the choice is a most likely going to be a different bu
    • any 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.

      What about employers? They do this too to their employees. Mine did not have it when I started, but then later added it saying "your continued employment after [insert date] gives

  • Is a refreshing change. It's nice to hear a story where justice is upheld rather than hearing more about how screwed I am.
  • don't really punish bad behaviour too often. A lot of the ones that end up in the news have really pathetic reimbursements that the "victims" need to be bothered to apply for. I mean what's the point of these things if you still make many more millions and then need to give a tiny iota back or some free song downloads to the few principled citizens who have the time to get it. They should modify the laws so that any unclaimed money still needs to be paid as a fine.
  • by Evilest Doer (969227) on Friday July 13, 2007 @01:08PM (#19851315)
    Actions like this show that the Great Holy Infallible Markets (TM) usually decide that eliminating your rights and stepping all over you generate the most profits. Especially if they can collude and set "industry standard" business practices. In fact, the few consumer protection laws that do exist are one of the few reasons that we really aren't a Corporate Dictatorship yet.

Old programmers never die, they just hit account block limit.

Working...