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U.S. Supremes Rip Class Actions a New Mass-Hole

April 28, 2011

AT&T Logo Parody (white background)Tied in to my post over a year ago about a guy in Chicago who was going to sue AT&T for (allegedly) illegally taxing his Internet access, now we move to California, where a couple brought a class action over that type of issue.

Goes to the U.S. Supreme Court – yes, that one, so recently renowned for defending the rights of common folk over big biz… snark.  And they strike again, split 5/4 right down the political line.  L.A. Times lays it out most cogently.

BlitzBlurb:  See, CA finds some contract clauses unconscionable and unenforceable, like lopsided contracts that deny class action rights; Couple brings class action over $30 charge for mobile access; issue of class-actionability goes to the Supremes; they say Fed Arbitration Act trumps.  No class action here.  CNN notes:

In dissent, Stephen Breyer warned requiring consumers to arbitrate disputes on an individual basis could lead them to walk away rather than litigate, if the typical monetary stakes are relatively small.

“What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?” said Breyer. “Why is this kind of decision– weighing the pros and cons of all class proceedings alike– not California’s to make?”

So, now that big biz has been given a roadmap by the Court, they will all write non-class-actionability arbitration clauses into contracts, then they can rip off as many people as they like … as long as it is for a minor, pointless-t0-sue-over amount. Hey, they can make it up in volume!

Now, to be clear, I am not a big fan of many of these class actions over stupid or unimportant stuff, or even the class actions about something important, but which brings little benefit to the class.  Case in point, the Dell Service Contract case, which I only know about because I am a putative class member.  Dell allegedly didn’t disclose their first-year at-home service contract cost money.   Sounds sketchy (I got it out of them).  But is it worth my time to read it and make a claim for $8?  No, but Dell must have rectified the issue, so that’s good.  But … can’t wait to see what the attorneys get out of it … oh, but they deserve it because they took all the risk (yeah, I know, but $XXX Million?).   And  so, while I do think there’s something wrong with some of these class actions, they gotta exist.

And I can tell you what would work just as well: one or two plaintiffs who go in an get an injunction against the company for the allegedly wrongful conduct, save everyone else.  Ahh … but how often does that happen?  Not enough.  So we need class actions.  Too bad they’re likely to virtually disappear faster than you can say, “Call our contract lawyer.”

For good measure, here’s USA Today.

Super Graphic Courtesy: Electronic Frontier Foundation

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