After AT&T Ruling, Should We Say Goodbye to Consumer Class Actions?

http://blogs.wsj.com/law/2011/04/27/after-att-ruling-should-we-say-goodbye-to-consumer-class-actions/

by grellas • 15 years ago

24 19 15 years ago

blogs.wsj.com

Joakal2• 15 years ago

I wonder if USA justices have been indicating to citizens that they should form their own company, elect representatives, foster contractual obligations between companies than individuals, etc.

You might think that sounds political, but it sounds tribal to me.

bluedanieru2• 15 years ago

They aren't, and if they were they would be absurd. A corporation is a legal device for making money. You shouldn't need everyone to join/form one in order for democracy to work and justice to exist.

The simpler explanations tend to be correct, and that applies here: the American government is captive to corporate interests.

flipbrad• 15 years ago

I live in a fully mutual housing cooperative; we each own a share in the 'corporate' body that owns the land we live on. It does not exist to extract or "make" money from us: it exists to receive and hold our collective rent (at rates which we set) and apply it as we see fit (on improvements, on other cooperatives requiring seed capital, and eventually, on renewing our lease from the council), to shield us from individual liability (e.g. in occupier's negligence), and to be a single voice or party in dealings (or even legal proceedings) with outside entities or individual members. Forming one enables our internal democracy to work, and protects and promotes out individual interests (especially in shielding us from personal liability). I disagree it would be absurd; I agree you shouldn't need to form or join one; but it helps.

starwed2• 15 years ago

Does the article cut-off or something? It says "...we just might be getting ahead of ourselves. Let’s back up."

But it never really revisits the initial claim that this could kill class actions...

gbhn• 15 years ago

The article argues that the Supreme Court interprets the Federal Arbitration Act as superceding state class action rules. It's a borderline thing, I suppose (5-4 decision), but it seems like a fairly straightforward ruling, predictable for this court, and a pretty defensible interpretation of what the law meant and Fed > State precedent.

tedunangst• 15 years ago

“What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?”

Isn't this the purpose of small claims court?

That question actually sums up my dislike of most class actions. It's not about righting a wrong, it's about a lawyer winning the jackpot. I've been a part of about a dozen class action settlements, and had I dug up sales receipts from ten years ago, could have earned myself awards sometimes approaching $5.00. Meanwhile, the law firm earned about $10 million. Not bad for a year's work.

Joakal2• 15 years ago

You might assume it's a lawyer hitting the jackpot, but the company had to pay it out of their coffers. The hit to the coffers (typically investors' money) means the company needs to avoid doing the same issue again.

Same argument for governments. If the taxpayers are upset at government losing taxpayer dollars in court, then they have their chance to voice a change in government. The opposition could point out the waste in next election and the current government gets defeated.

If you don't want to be part of a suit for $5.00 refunds, you can put yourself down as an exception. You can then sue them yourself.

bluedanieru2• 15 years ago

Exactly. Griping about lawyers getting a payday is just class warfare nonsense. (I agree they generally get too much, but this is throwing the baby out with the bathwater).

There is also the argument that when companies lose lawsuits they just pass the expense on to the consumer. I've always thought that was part of the point though. If the company in question is a monopoly however, I suppose there is some merit to that...

guelo2• 15 years ago

Without class-action why would these giant corporations NOT steal $5, $30 or more from all of its customers, when probably less than 1% will fight back?

hncommenter132• 15 years ago

Um, the potential to lose in arbitration? Possible state and federal criminal liability? Civil enforcement actions by federal and state agencies? Bad publicity? Competition?

dmethvin• 15 years ago

AT&T has nearly 100 million wireless subscribers now. If they can gin up a reason to add a $5 annual charge to every subscriber's bill, that's an extra $500 million to the bottom line.

Many customers won't notice a bogus charge like that. A few will silently gripe, figuring it isn't worth their time fighting. A few will complain to AT&T. Nobody will need to go to arbitration to get their $5 back, because AT&T will give it back if they're persistent. Even with maybe ten percent refunds, AT&T will have stolen away $450 million.

Class-action lawsuits definitely have been abused in the past and consumers often don't fare that well (whee, coupons) but the "arbitration" alternative doesn't give companies any incentive to treat customers fairly.

guelo2• 15 years ago

This conservative supreme court is a disgrace. It is a court that always sides with the prosecution over the defendant, the state over the condemned, the executive branch over the legislative, and the corporate defendant over the individual plaintiff.

cookiecaper2• 15 years ago

Citation please. I have a hard time believing your statement.

schwit• 15 years ago

The court ruled based upon the laws that Congress passed. I agree that the law needs to be changed, but that change must come from Congress. When judges overrule Congress it better only be because Congress violated the Constitution, otherwise you have judicial activism.

starwed2• 15 years ago

This was a case where the court split on partisan lines.

cookiecaper2• 15 years ago

It's worth noting that the Supreme Court is not the ultimate say. If the SCOTUS does something that the public does not approve, the duty of the public's elected representatives is to change the law such that it is brought into line with the interests of their constituents. The judiciary does not make law, but they do decide what the law means, and in this case the Federal Arbitration Act was decided to disallow a class-action lawsuit.

If you're worried that class-action will disappear all together, let your representatives know.

gcb• 15 years ago

It always amaze me how little I know of all the machinations that in the end rule everything in my life.

yardie• 15 years ago

Going from experience, SCOTUS is really the ultimate say. Can you think of any ruling SCOTUS has made that was against the publics favor that was then rewritten by lawmakers? I can't think of one. It's quite understandable that people believe the legislation has been bought by corporations. If any new law does get written its going to be written by corporate lobbyist to favor the same corporations it's trying to rule over.

Remember these are the same representatives that passed the Federal Arbitration Act. That act and this ruling make it all but impossible to punish corporations for malfeasance. This is why it's important to vote. Whoever leads this country will have an impact not for the next 4-8 years, but possibly 20-30. This ruling was made 5-4 along party lines. The majority were Reagan, Bush I, and Bush II candidates. Remember that when someone tells you they won't vote because they don't like either party.

hncommenter132• 15 years ago

1. It's easy to name a ruling on a statute that was then revised--this is not that uncommon. Try http://en.wikipedia.org/wiki/Ledbetter_v._Goodyear_Tire_%26_.... The Court's ruling hewed close to the text of Title VII, but Congress didn't like the outcome, so it changed the law.

2. The Federal Arbitration Act was originally enacted in 1925 (and has been amended and interpreted quite a bit over the years, obviously). Today's Congress is not composed of the same representatives who passed the act, nor does its view of arbitration necessarily reflect the view of those who enacted it originally.

3. This is not a cut-and-dried liberal vs. conservative issue. There are complicated issues of preemption of state laws by the FAA, and what constitutes "unconscionability" in an arbitration agreement--which has been in the Court quite a bit lately (see Rent-a-Center v. Jackson from last term).

After AT&T Ruling, Should We Say Goodbye to Consumer Class Actions?

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