Courts Reject Tech Corporation Bans on Class Action Suits 102
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.'"
Re:Anyone who gets overcharged for anything (Score:5, Insightful)
So, if you sign a cell phone contract, with a 14 day return policy, and on day 20 you get your bill and discover that they've overcharged you, you are a coward? Your options are basically:
The game is tilted against the consumer in these scenarios. And I'm glad this ruling came down the way it did. It's not right that a contract can force you to give up your legal right to seek relief in court. And before any wise-ass comes back with "then don't sign it", try living with a cell phone, credit card, phone service, bank account, etc, etc, etc. They are all doing it!
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try living without. *sigh*
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PS: I am 25.
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Getting a cell phone without signing anything is trivial. I have had prepaid service for a year now
Cool, I want to be cell-phone only so I don't have to deal with two numbers. Since it's my primary line, find me a pre-paid plan that's competitive. Counting nights and weekends I use about 2,500 - 3,000 minutes a month. On a post-paid plan of $39.99 (1k peak minutes/unlim n&w on T-Mobile) that's $0.013 a min for 3,000 minutes. Find me a pre-paid plan that's competitive with that.
Oh, that's right, you can't, because the pre-paid offerings are purposefully crippled to make them useless for anythi
Re:Anyone who gets overcharged for anything (Score:5, Funny)
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Introduce your friends/coworkers to email, forums, wikis, SMS, etc. I probably spend about 5 hours a day (call it 9000 minutes a month) communicating with friends and coworkers and relatives, *total*, but 50% of that is
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My grandpa uses 0 minutes per month, man that guy is really efficient!
Introduce your friends/coworkers to email, forums, wikis, SMS, etc
My daughter uses SMS and is much more efficient than me because I use voice, here is an example of a speed comparison:
Me speaking on cell phone to daughter: "I will pick you up in 10 minutes for soccer practice"
Daughter texting: OK
As you can see texting is clearly faster, now let's t
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Me speaking on cell phone to daughter: "I will pick you up in 10 minutes for soccer practice"
Daughter texting: OK
Why are you making plans to pick her up for soccer practice 10 minutes ahead of time instead of a day or a week? When I had after school or weekend activities as a child I knew which parent would be taking me, and when, at least a few days in advance.
Me speaking on cell phone to co-worker: "To boot the server, just flip the big red switch"
Co-worker using wiki: {1 mouse click on hyperlink to "Booting the Server"}
This is *EXACTLY* why we have set up a jabber server in our offices. 200 users, 2 IT/sysadmin guys. I'll take jabber over the phone for nonsense like that any day.
Me speaking on cell phone to friend: "Man I wish I knew if Sony had cut the price of the PS3, I really think I would buy one if they did, unfortunately I don't know and neither do you because we're both having this conversation on this dang cell phone!"
Friend reading slashdot: "Sony Drops PS3 Price"
Why didn't "friend" email you? Or ask on a forum where dozens of your friends could have an
Re:Anyone who gets overcharged for anything (Score:5, Funny)
Lets check and see how that would work:
As I pick up daughter for soccer, she asks: "You're late, why didn't you call?"
Me: "Traffic was bad but Sparr0 didn't want me to use my cell to make a voice call, so I used my cell and text'd my status to the Soccer Parents forum, I hoped you might have seen it there."
Daughter: "I don't go to that forum"
Me: "Dang"
Daughter: "Who's Sparr0?"
Me: "He's a poster on slashdot, seems to know all situations in which a cell phone might be used, turns out they just aren't efficient. Anyway, instead of me just telling you, why don't you check the the wiki I setup, it should explain everything."
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You need to find more efficient ways to communicate. I don't know if you are spending all that time for business or personal needs, but either way...
So, because my calling patterns don't fall into something that would work with pre-paid service I need to find a more efficient way to communicate? WTF? How does that disprove my point that pre-paid service won't work for everybody?
Yes, perhaps I'm a phone-aholic, but I could have made that example with somebody who only uses 500 minutes a month (16 minutes a day). At ten cents a minute on T-Mobile prepaid (the cheapest one there is) that's still $50 a month. T-Mobile's 600 minute post-paid plan is
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You must add $25 every 90 days. That works out to around $8.40 per month as long as you only talk about 33 minutes a month (if you choose the $0.25 per minute version). And as long as you keep adding every 90 days, you don't lose your previous balance. Perfect for semi-emergency use.
I don't consider that "price raping".
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AT&T has two variations of "Pay As You Go". No contract, no commitment. One is $1.00 per day plus $0.10 per minute. The other is $0.25 per minute.
Yeah, and T-Mobile's is just $0.10/min with no daily fee and the minutes don't expire for 365 days. Gives you about 83 minutes a month for $8.30. They are basically the only one of the big-four that don't cripple their pre-paid option.
I don't consider that "price raping".
I also don't consider it usable for a landline replacement unless you barely talk on the phone. Some of us use our phones pretty frequently and pre-paid isn't cost effective for us.
Re:Do class action suits ever benefit the consumer (Score:4, Insightful)
This is not to mention the bad publicity that comes from losing a major class action suit. That's probably where the most harm comes to a company in the long run. In this case the adage that "Any publicity is good publicity" is probably wrong as these are already well known entities. Of course the only "public" that hears about this may only be slashdot, which has the numbers to take down a server, but probably not a Fortune 500.
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What are you talking about? Why just look at that rapper Kevin Federline. He's as famous as ever. Compare with his ex-wife, who I can't even remember her name. Some singer I think.
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Re:Do class action suits ever benefit the consumer (Score:5, Insightful)
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(The same goes for holiday gift certificates.)
They do, by making companies think twice (Score:4, Insightful)
After all, the companies have massive legal departments, paid 24/7 access to the Congress with the ability to (re)write the laws, they can drag out even the most solidly grounded lawsuits forever through the appeals process and wait for the victim to go bankrupt with all those legal and court fees. Any individual claims that do get through all the way are likely to be small, and will not impact the profit margins at all.
Consequently, limiting class-action suits, along with court-awarded damages and restitution is a horrible idea; corporations would be able to literally kill thousands and still turn a profit!
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Thank you. This is what the corporate shills on television and radio don't understand (well, actually they probably understand, but they will never openly say it). A rise in taxes or an assessment of fines for illegal business practices does not translate into a direct increase in consumer costs since, in a healthy marketplace, competition will help set the price. What taxes and fi
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If a company "passes along" a charge to a consumer, that makes their product less attractive, and they stand to lose out to unburdened competitors. The company's having to decide where to trim costs or hike prices to pay the settlement is part of dealing with the settlement.
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It doesn't necessarily have to come in the form of higher prices. There are dozens of ways to 'pass it along'.
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Well where do you think the customers got their money? From the business that they work for. So really it's just the other business that's paying the fine. But THAT business is really just getting its money from its customers, etc.
Arguing that business never really pay anything is just as sill
Re:They do, by making companies think twice (Score:5, Interesting)
How about my idea: punitive damages go to the federal government's general fund. That way, you can still punish corporations that don't understand motivations other than financial penalties, but remove all profit incentive from the equation. Would this have any drawbacks?
not a new idea (Score:2)
Some states already do that.
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Well, yeah, nobody would file class action lawsuits because there'd be no money in it. The whole point of the class-action statutes is essentially to recognize that the government is incapable of fixing every illegal corporate behavior, yet individual victims of widespread behavior face a hopelessly lopsided and financially rui
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Re:Do class action suits ever benefit the consumer (Score:4, Insightful)
If the lawyer can shoulder the time and cost, I don't mind them getting a big payout, I wouldn't hope to get much back if I only lost like 50 bucks to the corporation. Hopefully they'll change their policy and that would still help me at least.
Re:Do class action suits ever benefit the consumer (Score:2)
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Re:Do class action suits ever benefit the consumer (Score:5, Interesting)
On the other hand (bet you forgot about that first hand up there!) according the TFA, Cingular is willing to pay out the state's defined small-claims amount _or more_ in individual arbitration. That's $4,000 in Washington state. But they're banking on the idea that only a handful of individuals would bother. However, if the customers were actually pro-active about it and all those who were eligible for the class action took the initiative and entered arbitration for something that was provably wrong on the part of the corp, then the individual plaintiffs stand to gain significantly more on an individual basis while the corpp stand to lose significantly more.
I would like to see some consumer advocacy group take a different approach in cases like these. I'd like to see them run a couple test arbitrations from their pool of original plaintiffs. If they are successful, use the information gathered as a result of this to assist additional plaintiffs in pursuing the same arbitration. They could put together packages of "how-to arbitrate the cingular over-charging thing" and send them to anyone who would have been eligible for the class action in the first place. Then you'd possibly see (provided the rewards were high enough) a significant number of well-armed plaintiffs entering arbitration at the same time. THat would likely have a real affect on a large corp. Nothing like having the legal dept suddenly swamped with massive number of arbitrations and then finding lots of well informed and prepared plaintiffs across the table from them. They may find themselves in a situation where they are _asking_ for a class action in violation of their own contract. That would be nice.
Re:Do class action suits ever benefit the consumer (Score:4, Informative)
In essence, you have to take up the complaint you have with the company with the company itself, and they're hardly unbiased. And I'm sure they would require that the arbitrations happen on their time table, one on one only, no lawyers allowed on the customer's side.
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Imagine the splash when many thousands of certified letters requesting arbitration arrive in the legal dept all at the same time. A little press action thrown in would make for an interesting day. The point is to make the co
Taking advantage of the non-tech savvy? (Score:4, Insightful)
Re:Taking advantage of the non-tech savvy? (Score:4, Insightful)
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.
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Just a reminder... (Score:5, Insightful)
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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,
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Re:Just a reminder... (Score:5, Interesting)
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
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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
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Let us know how that works when you get sued for breach of contract. kthxbye.
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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.
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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
So, where is that part on Amazon.com... (Score:2)
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
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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
Opposite decision just released today in Canada (Score:5, Interesting)
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.
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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
Here in the UK (Score:2)
Other than Washington, that is...
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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.
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However, I don't think consequential losses are necessarily covered. So you could perhaps demand your money back, but that's as far as you
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They do this because if they can prevent x% of returns, they will make y% more money, which is > than the cost of defending against a law suit which may never come. Despicable? Definitely. Good business? Very.
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See: Release [wikipedia.org].
As long as there's a quid pro quo, c'est la vie, so to speak.
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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
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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
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Where do I sign up?!
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T-Mobile has the same clause. (Score:1, Informative)
Unfortunately, this is very common (Score:5, Insightful)
Any business that forces a customer into binding arbitration in a contract can't be trusted.
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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
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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
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"You can't sue us for any reason" should automatically invalidate all of a EULA/contract. Even the cancellation fees and other bullshit.
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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
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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
Good news (Score:2)
Class action suits (Score:1)
"Let the Market Decide!" (Score:3, Interesting)
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Right, because when one utters the word 'Washington' NO ONE EVER thinks of this nation's capital. Ever. Just doesn't happen. Nothing to see here, move along...
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and besides it's Washington State University
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