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Court Rules Against AT&T's Service Agreement 97

Posted by Soulskill
from the now-get-to-work-on-those-eulas dept.
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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Court Rules Against AT&T's Service Agreement

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  • by bigtallmofo (695287) * on Sunday August 31, 2008 @09:28AM (#24818935)
    By reading this comment, you agree to send me $50 via PayPal and let me sleep with your most attractive female relative over the age of 18. If you do not agree to these terms, do not read this comment.

    Isn't AT&T's service agreement just as silly? The judge in the case appears to think so.
  • Road to overturn (Score:4, Interesting)

    by idiotnot (302133) <sean@757.org> on Sunday August 31, 2008 @09:37AM (#24818997) Homepage Journal

    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.

    • Re:Road to overturn (Score:5, Informative)

      by mr_matticus (928346) on Sunday August 31, 2008 @09:49AM (#24819075)

      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.

      • Bad summary... (Score:5, Informative)

        by Theaetetus (590071) <theaetetus DOT slashdot AT gmail DOT com> on Sunday August 31, 2008 @10:44AM (#24819371) Homepage Journal

        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.

        • Try again. (Score:3, Insightful)

          by mr_matticus (928346)

          Binding arbitration clauses can be fine, even in adhesionary contracts, and the court even mentions this:

          No. The court mentions that there is nothing wrong with arbitration. Binding arbitration, where the right to bring suit is summarily waived, is and has been subject to the court's disdain for quite a while.

          Any situation in which forced arbitration is a non-negotiated requirement of an agreement, which tends to disproportionately favor one side over the other, is evaluated quite carefully.

          There is nothing wrong with arbitration. Courts love it when parties go to mediation and arbitration, because it gets

          • Binding arbitration clauses can be fine, even in adhesionary contracts, and the court even mentions this:

            No. The court mentions that there is nothing wrong with arbitration. Binding arbitration, where the right to bring suit is summarily waived, is and has been subject to the court's disdain for quite a while.

            Quite a while?
            Such as Graham v. Scissor-Tail, Inc., 623 P.2d 165, where the California Supreme Court said in 1981 that binding arbitration clauses are enforceable, as long as they're not substantively unconscionable (in that case, the arbitrator was the defendant's board of directors).
            Or Armendariz v. Foundation Health, 6 P.3d 669, where the California Supreme Court restated in 2000 specifically that mandatory arbitration clauses were not unconscionable in a contract, where the arbitration was fair and impartial.
            Or Henningsen v. Bloomfield Motors, 32 N.J. 358, where the New Jersey Supreme Court (lest you think I was California-biased) said that adhesionary contracts, such as those with binding arbitration provisions, can be just fine.
            Or Carnival Cruise Lines v. Shute, 499. U.S. 585, where even SCOTUS said, yes, mandatory arbitration clauses with impartial arbiters are not unconscionable.

            Have you found a single case in which any court said that binding arbitration is unconscionable on its face, without requiring any substantive unconscionability?

            'cause if you have, the American Arbitration Association might be interested.

            Any situation in which forced arbitration is a non-negotiated requirement of an agreement, which tends to disproportionately favor one side over the other, is evaluated quite carefully.

            There is nothing wrong with arbitration. Courts love it when parties go to mediation and arbitration, because it gets them out of their hair. On the other hand, when it is loaded into an adhesive contract and puts the Offeree in a situation where they have lost their right to take action without having any foreseeable benefit to doing so. This is especially true in certain classes of agreements, like rental agreements, employment contracts, and service agreements, like we have here.

            Yes, but what you're missing is that there needs to both procedural unconscionability - an adhesionary contract, for instance - and substantive unconscionability. Otherwise, it's perfectly fine, due to the freedom to contract.

            I can make a horribly unconscionable contract, with full knowledge and understanding of my rights... Courts won't protect me, because though the agreement is unfair, I entered into it freely and with full knowledge (see Lucy v. Zehmer).
            I can also sign a boilerplate contract, with no ability to negotiate, take it or leave it, and if the contract isn't substantively unfair, it's binding (see many of the above references).

            There's a whole litany of cases on the subject. These types of agreements utilize the unequal bargaining power to enact an unconscionable waiver of rights.

            You missed the requirement of the unconscionable waiver of rights. Binding arbitration isn't necessarily unconscionable.

            Arbitration clause != binding arbitration clause without option to bring suit. As I've already said, both in this post and the earlier one, preserving arbitration as an option is important, but forcing it in a non-negotiated contract is very commonly unconscionable and has been part of the consumer rights movement of the past decade.

            And, as you've said earlier and here, you're wrong. Arbitration, even binding arbitration without option to bring suit, has been upheld by SCOTUS. The issue is that the arbitration must be unfair, too, not merely the fact that you're forced into it.

            (4 cases with cites... your turn)

            • You seem to be saying exactly what I am saying, taking exception with regard to some fabricated version of reality.

              Consider Armendariz (your inconsistent citation format and examples plainly indicate your use of Wikipedia for examples, and really poor use of them, at that)--an employment case finding an unconscionable contract of adhesion due to the unequal bargaining power.

              Consider also your own use of Graham v. Scissor-Tail, Inc., where the unequal bargaining power and lack of any reasonable benefit to th

              • Consider Armendariz (your inconsistent citation format and examples plainly indicate your use of Wikipedia for examples, and really poor use of them, at that)--an employment case finding an unconscionable contract of adhesion due to the unequal bargaining power.

                Consider also your own use of Graham v. Scissor-Tail, Inc., where the unequal bargaining power and lack of any reasonable benefit to the Offeree made the clause unconscionable.

                Nothing you have said contradicts anything I have said.

                Nope, wrong on both. The first one was adhesionary, but that's not what made it invalid. What made it invalid was that the employees were bound to arbitration and the employer wasn't.

                And in Graham, there was plenty of benefit to him - reduced prices, for instance. What made it unconscionable was that the mandatory arbitration provision specified Scissor-Tail's board of directors as the arbitrators.

                Again, what you've missed is that in order for a contract to be invalid for unconscionability, there needs to

                • The first one was adhesionary, but that's not what made it invalid.

                  No shit.

                  Here's what you don't seem to be able to grasp about the process.

                  1. A binding arbitration clause in an adhesive contract is presumptively biased in favor of the Offeror.
                  2. Adhesive contracts ipso facto satisfy procedural unconscionability where the term in question is not essential to the benefit of the bargain.
                  3. Where the arbitration clause was not highlighted as a feature of an agreement, it constitutes surprise.
                  4. Where an arbitration clause unilaterally strips the Offeree of a right to conte

                  • 1. A binding arbitration clause in an adhesive contract is presumptively biased in favor of the Offeror.
                    2. Adhesive contracts ipso facto satisfy procedural unconscionability where the term in question is not essential to the benefit of the bargain.

                    Which is exactly what I said. Reading comprehension isn't your strong suit, is it.

                    You seem to keep focusing on procedural unconscionability. Yes, Sparky, an adhesionary contract is procedurally unconscionable. I've been saying that from the start. You know what, though? It's not necessarily invalid.

                    The "inconsistent citation format" is because they're coming from different Reporters.

                    That's what's inconsistent. You should always use the official reporter for your citations. Had you actually used Westlaw, you would have come up with 28 Cal.3d 807 and 24 Cal 4th 83.

                    You don't think the Pacifi

                    • Which is exactly what I said. Reading comprehension isn't your strong suit, is it.

                      Actually, it seems yours is the issue again. I haven't been saying anything different from the beginning, but at least three times now you're drawing a distinction where none exists.

                      There is no need to quantify procedural/substantive unconscionability, unless your only familiarity with it is as a law student working out of some horseshit secondary source. You don't need both, and since the procedural element is not a concern, your bizarre insistence on repeating the "you need both" pile of manure is mispl

                    • You don't need both, and since the procedural element is not a concern, your bizarre insistence on repeating the "you need both" pile of manure is misplaced at best.

                      No, you most certainly need both, and your analysis below is wrong:

                      the adhesive contract would fill any judge's desire to find procedural unconscionability, rendering it moot. The substantive issue, the waiver of rights without negotiation, is the operative portion.

                      See that phrase "without negotiation"? Why are you considering that to be a substantive issue? That is the procedural issue, and you're getting them confused in a silly effort to find all adhesion contracts invalid.

                      The simple fact remains that binding arbitration clauses are disfavored in agreements in rental contracts, employment contracts, and service agreements because they are unilateral imposition of surprising terms that remove rights one does not expect to surrender in the course of bargaining.

                      And as I pointed out several posts back, this is just wrong. Binding arbitration clauses have been upheld by SCOTUS in Shute and others. You really should review some of the material I cited rather than just complaining that I use

                    • No, you most certainly need both

                      No, you don't. The analysis was split, as I've said, for judges and jurisdictions that follow Leff's analysis. It is not binding, certainly not in California, and not most other places. You have provided no citation for your bizarre insistence on turning categorical factors into elements.

                      Perhaps you haven't gotten that far in law school yet.

                      See that phrase "without negotiation"? Why are you considering that to be a substantive issue?

                      Because it goes to the surprise--if it is point out to you, even if it is not negotiated, it's permissible. If it is hidden in a contract where one does not expect i

      • The basic premise is that choosing ADR should be preserved as an option

        What's so good about arbitration at all? I know, they seem like a better implementation of a court-system, which is quite bloated and awfully expensive. But the arbiters are not judges, usually have little legal experience, and aren't from the Judiciary.

        What's wrong with courts needs to be fixed, instead of simply deciding cases outside of them.

        Before some comes in blasting "corporate greed" or some such, let's remind, that the Gover

        • by nomadic (141991)
          What's so good about arbitration at all? I know, they seem like a better implementation of a court-system, which is quite bloated and awfully expensive. But the arbiters are not judges, usually have little legal experience, and aren't from the Judiciary.

          Huh? Every arbitrator I know has extensive legal experience; they're usually lawyers and/or judges with substantial careers behind them. I remember going through an arbitrator list sent by the American Arbitration Association last year and except for a
          • by mi (197448)

            Every arbitrator I know has extensive legal experience

            In the field of financial arbitrage, at least one of the "judges" is a financial expert, not a legal one... Subject-matter experts are needed in courts often, but they don't decide there...

            Let me rephrase the question. Do we want multiple justice systems? A resounding "No". But, if we don't, we must get rid of the "arbitration" (at least, of the "binding" kind) least it competes with the main judiciary, that ought to be the one and only...

        • What's so good about arbitration at all? I know, they seem like a better implementation of a court-system, which is quite bloated and awfully expensive. But the arbiters are not judges, usually have little legal experience, and aren't from the Judiciary.

          Slight exception, not affecting your major point: many arbiters are lawyers, or at least have JDs.

          What's wrong with courts needs to be fixed, instead of simply deciding cases outside of them.

          True 'nuff.

          ... I wish, all of these special arrangements got stricken out for good along with binding arbitrages between private parties...

          Only thing is, binding arbitration has a few good points... Limited to times where the arbitration doesn't favor one party over the other of course, binding arbitration allows a party to essentially front-load their risk. By saying, "in the event of a dispute, we'll limit our payout to X", a company can factor the potential for X payouts into the price, reducing the overall cost of their product. Wh

          • by mi (197448)

            By saying, "in the event of a dispute, we'll limit our payout to X", a company can factor the potential for X payouts into the price

            There is no reason, the same clause can't be respected by a real court — in fact, a lot of non-arbitration contracts and service agreements talk about any compensation being limited to the amounts actually paid by the customer at some point.

            And if a court finds it unenforceable and/or unfair, then either the court is wrong (and needs fixing), or so it should be. This, i

    • Re: (Score:1, Insightful)

      by Anonymous Coward

      Class actions are often the only way some people can afford the attorney's fees to bring suit. The winners may end up giving half of their spoils to the lawyers, but the losers still lose.

      Arbitration is a pay-per-judgment scheme. An arbitrator will be more likely to side with the party that will most likely hire him again in the future, which would be the big company.

    • Re: (Score:3, Insightful)

      As the FTA mentions, these arbitration clauses are widely-used elsewhere. AT&T will appeal to federal court, and win.

      No, they won't. This was a state case filed on the basis of the laws of Washington state. Federal courts have no jurisdiction.

    • It was solidly supported by law. Other similar actions have NOT been overturned in Federal Court. I doubt very much that a Federal court would even agree that there are grounds for appeal.
    • by schwaang (667808)

      And even if they win in Federal court, the contract will still be unconscionable to any reasonable human being.

      The California version of this contract change has bold screaming letters that say I have to hold NSAT&T harmless for any invasion of my privacy on their part. And why does AT&T feel the need to reserve the option to *break the law* without consequences?

      If I don't cancel my phone service this agreement kicks automatically on Oct. 1. Given that my local government has handed monopoly right

      • The California version of this contract change has bold screaming letters that say I have to hold NSAT&T harmless for any invasion of my privacy on their part. And why does AT&T feel the need to reserve the option to *break the law* without consequences?

        They're CYAing for future versions of the warrantless wiretapping should they lose on that, plus "pretexting".

        Slimy dogs!

        If I don't cancel my phone service this agreement kicks automatically on Oct. 1. Given that my local government has handed monopoly rights to the copper wires to AT&T, I don't actually have many realistic options if I want to maintain a landline, which is still a practical necessity for most of us in modern life.

        I'm not sure how it's still a necessity. Many have cell phones today and can depend on them. Others (me) have VoIP and cut the traditional telco landline when I got it. The one may be more expensive but can go wherever you do, while the other one isn't quite as portable but is /much/ less costly, with /way/ more features. Many have both of the above.

        Yes, I'd call some sort of remote v

    • by Atario (673917)

      Many states don't even have class action anymore. They're a racket; only the head, and the attorneys make money.

      The point of class action lawsuits is not to make thousands of plaintiffs rich. It's to punish the defendant for wrongdoing.

  • by davidwr (791652) on Sunday August 31, 2008 @09:38AM (#24818999) Homepage Journal

    Thank you Judge Skywalker.

  • Right to Contract (Score:5, Insightful)

    by Detritus (11846) on Sunday August 31, 2008 @10:00AM (#24819145) Homepage
    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.
    • by nomadic (141991) <nomadicworld@@@gmail...com> on Sunday August 31, 2008 @10:22AM (#24819253) Homepage
      Arbitration was designed to be used between businesses; when it's done that way it can actually be a superior alternative to court. It's when it's applied to adhesion contracts with consumers that it get unfair.
    • by shmlco (594907)

      A contract spells out, in very specific terms, what's expected of both sides in an agreement. Or are you saying that two people or businesses should ignore them, enter into agreements based on vague promises and a handshake, and then let things devolve to a he said/she said battle when one side or the other feels dissatisfied or disgruntled?

      If you think the terms of a contract are unfair then negotiate them. And if you can't or won't, then don't sign them.

      • If you think the terms of a contract are unfair then negotiate them. And if you can't or won't, then don't sign them.

        unless EVERYONE thinks and works in this way. And the fact of the matter is most people are too ignorant to do so, crippling the minority who are not.

        This is how corporatism has gotten as far as it has in the United States and abroad.

      • by Detritus (11846)
        Negotiation isn't an option when everyone just says "take it or leave it", and everyone is offering the same terms. I've seen this many times, where all the vendors in a given market segment have nearly identical contract terms, usually as hostile as the law will allow towards the customer. It's not in their interest to make an exception for a customer.
        • by Tuoqui (1091447)

          Easy just take a marker and scratch out the portions you dont like. If they give you the service after that then they've agreed to your modified contract the same as if you just sign it and they give you the service. Not reading over contracts can work both ways you know.

  • So does this mean any service agreement which contains a very limiting arbitration clause is essentially fucked?

    This could be handy.
    • It depends on the state law. As mentioned in the decision, the requirement of arbitration would probably have been upheld in New York state, which does not have a state law invalidating such in cases like this (another way in which New York sucks).

      However, in general, the more states that rule this way, the more likely that similar policies will be adopted by other states.
  • by DragonTHC (208439) <Dragon@gamerslST ... .com minus berry> on Sunday August 31, 2008 @10:21AM (#24819249) Homepage Journal

    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.

    • by Courageous (228506) on Sunday August 31, 2008 @11:05AM (#24819555)

      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".

      They sort of do have the legal right to do that. They give a new agreement out, and you, should you continue with service and pay, have given them consideration and voila. New contract of adhesion.

      It's just another line item in why I disagree with the very concept of the contract of adhesion. No contract should be permissable that doesn't obey the rules of ordinary contracts ("meeting of the minds," etc).

      Business wants the ability to enter into contracts without going through the due dilligence. This is, and always has been, ethically lopsided. For the consumers, there is no real fairness.

      C//

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        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".

        They sort of do have the legal right to do that. They give a new agreement out, and you, should you continue with service and pay, have given them consideration and voila. New contract of adhesion.

        "I am altering the deal. Pray I do not alter it further."

      • by Xelios (822510) on Sunday August 31, 2008 @12:46PM (#24820407)
        How does that work? If they modify the terms of the contract then the contract has changed. The old one no longer applies, and you should be required to sign the new one if you want to keep receiving the service. If you choose not to sign the new contract you should be allowed to cancel your service with no penalty, since it was the company that modified the agreement.

        That should be common sense, I'm amazed that it doesn't work that way. Wait... on second thought, no I'm not.
        • Re: (Score:3, Informative)

          All of the "contracts" that I have entered into that contained clauses that said that the other party could change the terms and conditions when they wanted to, also allowed me to cancel without penalty if and when that happened.
          Usually, they send you letter explaining in detail the changes they are making (in full legalese) and then somewhere on page three or four list how to cancel your contract with them. I have always found that it appears to be very simple and easy to cancel the contract when they mak
        • by Solandri (704621) on Sunday August 31, 2008 @03:19PM (#24821799)
          You can cancel without penalty when this happens. A lot of people took advantage of it to get out of cell phone contracts back when cellular 911 service became mandated. The wireless carriers lobbied for and got the right to charge a fee for the 911 service. This fee was a change in the contract, so spades of people who'd been itching to get out of their contracts without paying the early termination fee simply said they didn't agree to the new fees. Since the carriers were required to provide 911 service and they wanted to charge the fee, they canceled the contract, thus nullifying the early termination fee.
          • Really? Tell that to DirectTV. They altered my contract, and when I said I didn't agree to the new one, they slapped the $150 early termination fee on me. Reading the old contract carefully showed that I had agreed to pay early termination fees if I refuse new contract alterations. Their passing my final bill to a collection agency before it was even due was just abusive.

            Since then, I have refused to enter into any contract with early termination fees. I pay for cell phone month-by-month, and laugh m
      • by DragonTHC (208439)

        I was referring specifically to credit card agreements. Sure, you can decided not to continue the contract when they change it, however doing so requires you to pay your whole balance off right then and there or you're agreeing to the contract by not being able to pay.

        When I was fresh out of high school, I got a credit card and maxed it out within a year. They were in my college breezeway giving out free gifts for signing up. I was stupid and ignorant about the responsibilities of having a credit card.

      • by phorm (591458)

        They give a new agreement out, and you, should you continue with service and pay, have given them consideration and voila

        Except that it often doesn't work that way. Sometimes it's a notice posted up on their website (often in a not-obvious area). Sometimes it's a hidden clause buried in a mound of other useless paperwork. And in any of the above cases, there is no verification process using written or even verbal acceptance.

        And furthermore, there's already a fucking contract. Sorry, but if I have an agreem

        • Except that it often doesn't work that way. Sometimes it's a notice posted up on their website (often in a not-obvious area). Sometimes it's a hidden clause buried in a mound of other useless paperwork. And in any of the above cases, there is no verification process using written or even verbal acceptance.

          I am aware.

          Frankly, in most contract of adhesion, the buyer isn't aware of the terms during the early rounds, no less the later ones. I'm against the whole concept. If the thing being contracted isn't wort

    • by kramer (19951) on Sunday August 31, 2008 @11:10AM (#24819583) Homepage

      No. No. No. Wrong. Wrong. Wrong.

      You can sign away certain rights, including the right to sue. There is (apparently) nothing unconstitutional about this contract. There is no constitutional guarantee to sue someone.

      What the judge said was that it was unconscionable, meaning that the contract has clauses that are so burdensome that no person would agree to them if they had a choice. Unconscionable clauses are typically rendered unenforceable by courts. The case was decided on Washington state law. The constitution, the U.S., Washington's, or otherwise doesn't enter into it.

      Oh, and since this was decided by a state court, this ruling has no legal effect on anyone outside of Washington.

      • by yoshi_mon (172895)

        You can sign away certain rights, including the right to sue. There is (apparently) nothing unconstitutional about this contract. There is no constitutional guarantee to sue someone.

        What the judge said was that it was unconscionable, meaning that the contract has clauses that are so burdensome that no person would agree to them if they had a choice.

        If you would be so kind to someone who did not RTFA what part of AT&T's service was the EULA attached too? Because if it was anything other than home phone service would that not put it in the same boat as any other EULA where you have other options?

        By that I mean I can choose not to play WoW and thus avoid the EULA. I can choose not to use AT&T Wireless and instead use someone else. So on and so forth. To me the only thing I could not avoid are local monopolies like the local telcos, power, etc

        • by kramer (19951)

          It was long distance phone service. However, courts play sort of fast and loose with the "no other choices" portion of the unconscionable test. Often it is enough to have the other contracts have similar provisions. In this case the provision that was objectionable to the court was the mandatory. arbitration clause. From what I know many, perhaps even most long distance contract have language requiring arbitration. Apparently that language is now ineffective in Washington.

      • by Tuoqui (1091447)

        True but sometimes judges will take precedence from other districts and apply them to their own. The more the precedence spreads the more traction it gains in the remaining states.

    • by Jimmy_B (129296)

      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".

      That one's already been tested, and found invalid - specifically, the "without notice" part. Contracts can do many things, but they can't change the underpinnings of contract law. It isn't possible to accept a contract which doesn't exist yet, because by definition, a contract only exists when there is offer, acceptance, and consideration. If a company changes terms without n

  • by Il128 (467312) on Sunday August 31, 2008 @10:49AM (#24819411) Journal
    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 [worldofwarcraft.com]
    http://www.worldofwarcraft.com/legal/termsofuse.shtml [worldofwarcraft.com]
    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/ [virtuallyblind.com]


    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...
    • Re: (Score:2, Funny)

      by Anonymous Coward

      Hi person who got banned for using hacks/bots in WoW.

    • The agreement does not state that the physical RAM is theirs. It only states that they can monitor it and that the contents of regions may not be modified by programs other than their own.So the claim that they own the computer is a little bit of a stretch.
      • by toddestan (632714)

        Well, if they can monitor the contents of the your ram and change it their will, then they "own" it in the pwn3d sense.

    • Sorry, but I already have another entangling allian...er..I mean agreement with Microsoft that preempts Blizzard's...

      So my RAM is neither mine nor yours to give.

      Ignorance of a contract is a good enough excuse until the lawyers arrive.

    • Re: (Score:3, Informative)

      by Solandri (704621)

      Just saying, most Game Company EULAs actually state that you don't even get a service in return for your payments

      Then the agreement is automatically invalid. All contracts have to have something called consideration. Basically, both sides have to get something of value out of the agreement. A contract in which only one side is getting value lacks consideration and is legally invalid.

      • by Il128 (467312)
        "A contract in which only one side is getting value lacks consideration and is legally invalid."

        That was a true statement up until about twenty years ago. Now all one side has to do is show "intent of good will" and they do not have to provide anything at all, even when they actually possess the ability to provide the service.

        And you can't sue. You go to arbitration which does not hold the same legal view of a contract that a court of law does.

        The agreement has been upheld in arbitration num
  • by Anonymous Coward

    The ruling explicitly applies Washington state law (not New York law, as the agreement originally called for), under a theory that appears settled. The decision relies heavily on the strongly pro-consumer slant to Washington state's consumer protection statutes.

    Reading the decision, there are a number of places where the justices make conclusions of law specifically based on legal tests that pass under Washington state law, where they acknowledge those same tests might fail under other state law (for examp

  • This means Sweet Fuck-All until and unless the Court subpoenas the boards of directors of firms like this. Corporations will continue to try destroying their customers' rights under law until it gets treated as the criminal activity that it is.
  • by houbou (1097327) on Sunday August 31, 2008 @01:40PM (#24820883) Journal

    I remember commenting about this in an earlier post (about Telus) I believe.

    You have to love any company's balls as they write their contract stipulations, and yet, often, write them in such a way that they contradict local/state/province or country laws.

    And AT&T right now is a fine example of a company inserting clauses into their contracts that are not legal to begin with, thus non-binding.

    And I'm sure that if I knew enough about laws and clauses, etc.. that most companies out there have many non-binding clauses, but we just don't know. It's too complicated to read.

    Another example are the games and their EULAs, all these "thou shall not and this isn't and so on and so forth", I would bet that it's all bluster and very little substance, that if anyone had a bit of money and time to blow and a good lawyer to partner with, they could blow holes in those EULAs.

    • by Kaenneth (82978)

      Usually there is a 'severability' clause, stating that if a portion of the contract is found invalid, it dosn't invalidate the rest.

      Not sure if you meant the the contract as a whole, would be non-binding, or just the unlawful clauses.

      • by Tuoqui (1091447)

        Then its about time some courts start finding these 'severability' clauses as unconscionable. I'm quite sure that if the shoe were on the other foot the company would be able to sever the contract against the individual without any problem.

  • OF PARTICULAR NOTE (Score:3, Interesting)

    by Jane Q. Public (1010737) on Sunday August 31, 2008 @04:15PM (#24822279)
    Quote: "The trial judgefound AT&T's Consumer Services Agreement both substantively and procedurally unconscionable. McKee was notprovided with a copy of any agreement at the time he signed up for AT&T services. Even when a consumer contracts for a service electronically, the consumer has an opportunity to review the contract and is given the choice to "agree"McKee (Michael) v. AT&T Corp., No. 81006-1 before the contract is formed. See, e.g., Koresko v. RealNetworks, Inc., 291 F. Supp. 2d 1157, 1163 (E.D. Cal. 2003)(describing electronic "clickwrap" agreements). AT&T apparently mailed the terms and conditions to McKee 10 days to two weeks after he subscribed for service. AT&T retained the right to unilaterally change the contract by posting the change on its web site or by mailing the notice of the change. A consumer wasdeemed to have agreed to the changes by continuing touse AT&T servicewhether the consumer had actual noticeof the change or not.13 At no time was the consumer required to read and sign or affirmatively acknowledge acceptance ofthe terms and conditions. These facts raise anissue of whether McKeehad a reasonable opportunity to understand the terms and a meaningful choice."

    So, yet another judge states that "after-the-fact 'agreements'" are very questionable. However, he refused to actually rule on the matter because it was not specifically germane to the case at hand. Sigh. But at least it shows that some courts are willing to go by reason and law rather than corporate ass-kissing.
  • You can not, under any circumstances, give up your right to sue. It does not matter what you sign or what you say or do, you can sue anyone for anything.

  • What makes it even worse is that AT&T remains essentially a monopoly, or at least a polyopoly in limited market giving few to no other options. To attempt to take away guaranteed consumer rights is truly unconscionable.

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