Microsoft ending consumers' ability to file class-action suits(latimes.com)
latimes.com
Microsoft ending consumers' ability to file class-action suits
http://www.latimes.com/business/la-fi-lazarus-20120608,0,2211927.column
7 comments
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.
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.
You can put a lot of things in a contract, but it doesn't make them legally binding if the clause is illegal.
they should make it illegal to add things to contract that are illegal.. maybe heavy fines.
You can get into some serious trouble. Stuff like voiding the whole contract and providing an easy way to sue. The problem is that nobody knows everything that is illegal, even lawyers and judges get tasked with determining legality and maliciousness. Heck, try to get the complete list of federal regulations.
It often is illegal to make a contract to do something illegal.
However, the contracts are usually written to say that any parts which are found to be illegal are severed from the contract, so as long as such clauses are allowed, very few contracts are likely to illegal.
However, the contracts are usually written to say that any parts which are found to be illegal are severed from the contract, so as long as such clauses are allowed, very few contracts are likely to illegal.
One word: bollocks.
It'll get overruled by a judge the moment they are taken to court.
It'll get overruled by a judge the moment they are taken to court.
Unfortunately no.
The Supreme Court has already ruled that this is legal.
http://en.wikipedia.org/wiki/AT%26T_Mobility_v._Concepcion
The Supreme Court has already ruled that this is legal.
http://en.wikipedia.org/wiki/AT%26T_Mobility_v._Concepcion
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The idea that a company can "prohibit" anyone from using a part of the law is the real red flag here.
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.
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.
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.
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...
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?
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.
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.
Aren't class action suits more of a punitive thing instead of actually getting people money?
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.
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.
Wouldn't the company spend far more that $10m trying to address a million lawsuits (in small-claims court) for <$10 each though. I imagine any one small-claims proceeding would cost them several hundred dollars at least.
So are they banking on just defaulting to the judges decision and paying the money for such cases and then hoping that not many people will bother to pursue?
Personally I'd love to be in Redmond when, on the back of this decision, they get half-a-million or more court summons in the post one day.
So are they banking on just defaulting to the judges decision and paying the money for such cases and then hoping that not many people will bother to pursue?
Personally I'd love to be in Redmond when, on the back of this decision, they get half-a-million or more court summons in the post one day.
> I imagine any one small-claims proceeding would cost them several hundred dollars at least.
Yes, but it would also cost that much to everyone suing. Would you lose a day of work (Say, $20/transport + ~$150 if you're make $40K a year, ~$400 if you're around $100K) to recover $10, even if you knew you had 100% chance of winning?
Almost no one would. (And almost no one does)
Yes, but it would also cost that much to everyone suing. Would you lose a day of work (Say, $20/transport + ~$150 if you're make $40K a year, ~$400 if you're around $100K) to recover $10, even if you knew you had 100% chance of winning?
Almost no one would. (And almost no one does)
There aren't going to be a million lawsuits. I'm probably part of a half dozen class action suits per year. I never would have considered suing in any of them. In fact, I would generally prefer if there were some way for me to opt out and let the company keep my 0.0001% of the settlement. As far as I know, I can opt out (even if it's more trouble than it's worth), but that doesn't reduce the settlement amount.
My iPod nano worked just fine, my Netflix DVDs showed up in a reasonable time frame, I don't have receipts for the RAM I bought back in 1998, the list goes on and on. Consumers did not come out ahead as a result of those class actions.
My iPod nano worked just fine, my Netflix DVDs showed up in a reasonable time frame, I don't have receipts for the RAM I bought back in 1998, the list goes on and on. Consumers did not come out ahead as a result of those class actions.
Heather Peters is trying to get people to opt out of a class action settlement by Honda and instead sue Honda in small claims court (where the individual would have a better chance at wining their case against the Honda rep.
Maybe a million is unachievable, but the idea is there.
http://www.dontsettlewithhonda.org/
Maybe a million is unachievable, but the idea is there.
http://www.dontsettlewithhonda.org/
It says Honda won the appeal.
In your example, the company selling deceptively labeled monitors pays $10 million. That should discourage them from continuing that practice.
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.
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.
That said, the evidence is not on my side with that.
Ideally, you sue to be made whole again, which makes the $7 payment seem ineffective.
As mentioned above, class action lawsuits are a useful tool to penalize the company for wrongdoing that is diffused over a large set of people. Let's say AT&T overcharges 5 million people a dollar each, on purpose. I could take them to court to try to get my dollar back, but that would cost me far more than it is worth. There need to be some mechanism by which I can defray that cost among others like me and we can as one unit seek renumeration, otherwise AT&T has no real reason to stay honest because they will almost certainly come out ahead.
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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.
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.
The supreme court is a court of appeals. If there is not a two person majority, Stare Decisis.
I'm afraid I don't quite follow. Yes, the supreme court is an appeals court, but what I'm saying is that you can't appeal from a SCOTUS decision, so it's not like a case with a 5-4 decision can be resolved through some other method.
As for stare decisis, the Supreme Court often deals with cases for which there is no precedent. Isn't that precisely the type of case we're dealing with here?
As for stare decisis, the Supreme Court often deals with cases for which there is no precedent. Isn't that precisely the type of case we're dealing with here?
I am saying that if the case comes down to a 5-4 decision, the court issues no ruling, and in all respects participants act as if a writ of certiorari had not been granted, except that you extend any relevant deadlines by the amount of time the supreme court spent dealing with the case.
There are no cases in which there is no precedent. It may be a new technology, or a new law, or a new amendment, but there is never an utter lack of precedent. In this case, I used stare decisis to mean that the court should choose to let the decision stand and not overrule the lower court.
There are no cases in which there is no precedent. It may be a new technology, or a new law, or a new amendment, but there is never an utter lack of precedent. In this case, I used stare decisis to mean that the court should choose to let the decision stand and not overrule the lower court.
Because these powerful stances can be reversed. Constitutional amendments are very difficult to reverse because once they become embedded.
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.
Because if the cases were easy, you wouldn't need a final arbitrator?
Everyone can make the easy decisions.
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.