Microsoft ending consumers' ability to file class-action suits

http://www.latimes.com/business/la-fi-lazarus-20120608,0,2211927.column

by MRonney • 14 years ago

29 36 14 years ago

How come you can put random ridiculous claims in contracts in yor USA without this having no legal power?

It seems to us from the outside that the legal system of USA no longer makes any sense. What is bad that USA forces other countries to copy its broken legal system.

protomyth2• 14 years ago

You can put a lot of things in a contract, but it doesn't make them legally binding if the clause is illegal.

temp1912• 14 years ago

they should make it illegal to add things to contract that are illegal.. maybe heavy fines.

DannyBee2• 14 years ago

The contract forces mandatory, individual, arbitration. Congress passed a law that allows contracts to force this. This law has been around quite a while. Wikipedia says 1925, and i'm too lazy to look up if that's correct, but I know there are cases on it dating back to at least 1984.

It was only recently (~5 years ago) that they started to use it to ban class action lawsuits (instead forcing individual arbitration). The act neither explicitly allows or precludes this. Before you say that should make the answer obvious, realize class action lawsuits are entirely a judicial creation. There is no law that was ever passed to create the idea of a class action lawsuit, it was created entirely from whole cloth (well, imported is a better description) by judges.

Somewhat ironically, the supreme court that folks are yelling about is also the same court that basically created the notion of representative in the US.

sukuriant• 14 years ago

Why can such powerful stances be resolved with a 5-4 ending position? Literally one person makes the difference. You'd think for such a far-reaching situation, a resolution would require at least a 2-person majority to pass.

waiwai9332• 14 years ago

Mostly because it's not practical, since these are Supreme Court cases, so it's not a resolution as such. If you end up voting 5-4 and a 2-person majority is required, there's a problem. No one can appeal, because it's the Supreme Court, and you can't just ignore it, because you have to do something about the case in front of you.

celer2• 14 years ago

The supreme court is a court of appeals. If there is not a two person majority, Stare Decisis.

colindoc84• 14 years ago

Because these powerful stances can be reversed. Constitutional amendments are very difficult to reverse because once they become embedded.

tikhonj2• 14 years ago

With constitutional amendments, that logic seems a bit circular. Amendments are hard to reverse because it takes another amendment to do that and adding an amendment is difficult. If adding an amendment was easier (I think some state constitutions are like this) then they would also be easier to reverse.

DannyBee2• 14 years ago

Because if the cases were easy, you wouldn't need a final arbitrator? Everyone can make the easy decisions.

cletus• 14 years ago

I have mixed feelings about this.

Firstly, all these pesky class action lawsuits where each participant can get $7 [1] do absolutely nothing but enrich lawyers. I really don't see the point in them. So frankly I don't care if those go away.

But I guess it's some form of accountability.

Also, depending on the jurisdiction these provisions prohibiting or restricting you from suing may be unenforceable anyway.

[1]: A law firm will file a lawsuit on behalf of a number of participants (eg my monitor really isn't 19", it's 17.7" display size). The law firm will seek certification by a court as a class. At that point they'll sign up as many people as they can. These lawsuits nearly end up in settlement so the defendants may settle for, say, $10 million. The law firm keeps $3 million (give or take) as they're paid on a contingency basis. The million people they got to sign up will get $7 each.

ceol2• 14 years ago

Aren't class action suits more of a punitive thing instead of actually getting people money?

_delirium2• 14 years ago

That's one of the main use-cases, yes. The worry is that, due to the overhead of filing a suit and little that would be gained from a 1-person suit even in the event of success, a company could deliberately cause many people modest damages, if there were no class-action mechanism. The class-action mechanism is what makes it risky for a company to cause 1m people $10 in damage each, because they could face a $10m-damages lawsuit, plus punitive damages if it was reckless/deliberate activity. Otherwise it would be relatively safe to cause modest damages here and there, because even if you lose a $10 lawsuit with tripled damages, that's still only... $30. So companies could routinely deliberately harm people (if they kept the harms relatively modest) as a business strategy.

There are alternatives; in some countries, the public prosecutors take a bigger role and will prosecute those kinds of things on behalf of the public, instead of providing a mechanism for the public to band together into classes.

ktizo• 14 years ago

The law is not supposed to be a lottery. You sue people because something is wrong, not in order to profit.

That said, the evidence is not on my side with that.

kd0amg• 14 years ago

Ideally, you sue to be made whole again, which makes the $7 payment seem ineffective.

tzs• 14 years ago

In your example, the company selling deceptively labeled monitors pays $10 million. That should discourage them from continuing that practice.

tedunangst2• 14 years ago

Actually, they pay $3 million cash to the lawyers, $10k cash to the primary plaintiff, and give out one million $7 vouchers for a new monitor, of which about six will be used.

novalis• 14 years ago

The idea that a company can "prohibit" anyone from using a part of the law is the real red flag here.

tikhonj2• 14 years ago

Of course they aren't actually prohibiting anything. Rather, they're just saying that they won't sell you anything unless you promise not to start a class-action lawsuit.

They're basically acting like the little kid who owns the ball everybody's playing with: it's his rules or the highway. But that is still different from actively stopping people from doing things.

Even so, it's pretty horrible and I would love this to be unenforceable. Meanwhile I'll just use Linux, thank you very much.

_delirium2• 14 years ago

That's true, they aren't prohibiting anybody who has no commercial interaction with them. But in many legal systems, commercial interactions are held to always, and irrevocably, operate within the background legal framework. So you can agree on a contract, but you can't agree, in the contract, that the law of contracts doesn't apply to the contract, because the law of contracts always applies to contracts. Which then includes all the usual legal rights, such as the right to sue for breach of contract, to bring a class-action suit, etc.

temp1912• 14 years ago

Can they also make it legal to own a monopoly?

mtgx2• 14 years ago

"If you agree with this EULA, you'll forever be our customer, and you'll never be allowed to switch to one of our competitors". Might as well give that a try if they are getting away with this.

gouranga• 14 years ago

One word: bollocks.

It'll get overruled by a judge the moment they are taken to court.

Caerus• 14 years ago

Unfortunately no.

The Supreme Court has already ruled that this is legal.

http://en.wikipedia.org/wiki/AT%26T_Mobility_v._Concepcion

lini• 14 years ago

Not really surprising. Sony did the same after the PSN hacks last year - http://games.slashdot.org/story/11/09/15/1542247/new-sony-ps...

mtgx2• 14 years ago

Not really surprising? Are you expecting everyone to introduce this in their contracts with their customers then? Do you think it's something they should do, that makes it so unsurprising?

Microsoft ending consumers' ability to file class-action suits

Related Stories