The End of Class Action Lawsuits

http://www.chicagotribune.com/business/sc-dc-0428-court-class-action-web-20110427,0,6781234.story

WASHINGTON — The Supreme Court gave corporations a major win Wednesday, ruling in a 5-4 decision that companies can block their disgruntled customers from joining together in a class-action lawsuit. The ruling arose from a California lawsuit involving cellphones, but it will have a nationwide impact.

In the past, consumers who bought a product or a service had been free to join a class-action lawsuit if they were dissatisfied or felt they had been cheated. By combining these small claims, they could bring a major lawsuit against a corporation.

But in Wednesday's decision, the high court said that under the Federal Arbitration Act companies can force these disgruntled customers to arbitrate their complaints individually, not as part of a group. Consumer-rights advocates said this rule would spell the end for small claims involving products or services.

In the case before the court, a Southern California couple complained about a $30 charge involving their purchase of cellphone service from AT&T Mobility. The California courts said they were entitled to join with others in bringing a class-action claim against the cellphone company.

But the Supreme Court reversed that decision Wednesday in AT&T Mobility vs. Concepcion. Justice Antonin Scalia said companies may require buyers to sign arbitration agreements, and those agreements may preclude class-action claims. Chief Justice John G. Roberts Jr. and Justices Anthony Kennedy, Clarence Thomas and Samuel A. Alito Jr. formed the majority.

Scalia said companies like arbitration because it is efficient and less costly. "Arbitration is poorly suited to the higher stakes of class litigation," he said.

But the dissenters said a practical ban on class action would be unfair to cheated consumers. Justice Stephen G. Breyer said the California courts had insisted on permitting class-action claims, despite arbitration clauses that forbade them. Otherwise, he said, it would allow a company to "insulate" itself "from liability for its own frauds by deliberately cheating large numbers of consumers out of individually small sums of money."

Breyer added that a ban on class actions would prevent lawyers from representing clients for small claims. "What rational lawyer would have signed on to represent the Concepcions in litigation for the possibility of fees stemming from a $30.22 claim?" he wrote. Justices Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan joined his dissent.

The court itself divided along partisan lines. All five Republican appointes formed the majority, and four Democratic appointees dissented.

Still pending before the court is a major dispute over class-action suits involving job discrimination. Lawyers for Wal-Mart have asked the justices to throw out a sex-discrimination claim brought on behalf of 1.5 million current and past female employees.

At least we're eliminating socialism!

That's always good. 😛

U-S-A, U-S-A, U-S-A!

Glad to see this. We really do need to get rid of bad class action lawsuits. Class Action Lawsuits are mostly an atrocious, disgusting, abuse of the legal system...and a shame to the US.

We've done quite a bit to curtail the poisonous CA suits, recently...which gives me a little bit of hope.

Originally posted by dadudemon
We really do need to get rid of bad class action lawsuits.

This will kill all of them.

Baby --> Bathwater

Originally posted by Symmetric Chaos
This will kill all of them.

Baby --> Bathwater

It won't. Where did you hear that it would kill all of them? I read nothing in there that can kill all of them. There's still a large body not blocked by this decision: damage (physical), risk of damage, or damage via proxy. I'm not even covering the half of it because I'm not a lawyer.

There's quite a bit of Class Action suit types not covered by this. What this ruling does is block claims which have to be "money". That's things like not being paid enough, illegal fees, etc. That's a really good thing. What did people get in the past? A $5 check? Free mascara? (Those are actual references to Class Actions cases. 10 points go Gryffindor if you can guess which "recent" cases those were from.)

Originally posted by dadudemon
It won't. Where did you hear that it would kill all of them? I read nothing in there that can kill all of them. There's still a large body not blocked by this decision: damage (physical), risk of damage, or damage via proxy. I'm not even covering the half of it because I'm not a lawyer.

From what Scalia wrote it seems that businesses will now be allowed to add a line to contracts that says you can't be part of a class action suit against the company, which previously would not have held up in court. No company will not include such a clause.

But even if it were limited to money do you really not see a problem with, for example, Apple cheating 20 million people out of $50 each and them having no real recourse since their claims are too small to care about individually?

I'm really hoping someone retires before this stupid 5-4 shit ruins our country.

Originally posted by Symmetric Chaos
But even if it were limited to money do you really not see a problem with, for example, Apple cheating 20 million people out of $50 each and them having no real recourse since their claims are too small to care about individually?

The individual did not lose the ability to sue...even a little bit.

The difference?

Each individual will be responsible for obtaining their justice. This means that we will not see gift certificates or free mascara for the individuals and lawyers take home millions to tens of millions of dollars. Instead, those who actually care can pursue and obtain the $50, if they legally deserve it. Most people don't care.

decent example

bad argument

The money just went to greedy lawyers anyways.

Who gives a shit if it's a waste of money? The Federal Government has no ****ing problem with spending like 10 million dollars on creating a case to try to throw Barry Bonds' black ass in jail. At the very least, petty class action lawsuits, regardless of how petty, can result in companies losing tons o tons of money, which is always a good thing as it keeps them (just a tad in most cases) humble. Is that less noble then lustfully pursuing black athletes, or 60 billion a month blowing up arabs in the middle east?

Honestly, on the totem pole this is just a waste of time. Our gov't really has bigger shit to worry about then CALS, imo.

Class action lawsuits mainly benefit the attorneys, rather than the plaintiffs, but also have the positive effect of punishing corporations who behave improperly. This is yet another ruling by this supreme court that is going to kill the country.

Originally posted by dadudemon
The individual did not lose the ability to sue...even a little bit.

Not legally, no, but for practical purposes it becomes impossible. No one will take the case because they're all too small. It allows for massive acts of fraud that won't be effectively and in fact cannot be punished by the courts without grinding them to a halt with hundreds of thousands of cases.

That's bad.

Originally posted by Symmetric Chaos
Not legally, no, but for practical purposes it becomes impossible. No one will take the case because they're all too small. It allows for massive acts of fraud that won't be effectively and in fact cannot be punished by the courts without grinding them to a halt with hundreds of thousands of cases.

That's bad.

That is certainly a large part of the problem with the outcome of this descision.

RE: Blaxican, the opinion that the government has better things to do is not relevant.

As when Justice Alito mouthed his dissent at the President's comments during the State of the Union, there is a disconnect with reality for these justices some times. When the supreme court ruled that corporations could contribute to political campaignes as individuals, it was an effort to destabalize, counter and undermine the influence of unions on politics. Now we see what is going on in places like Wisconsin. These are erosions of liberties for every American individual, in favor of the rights of the corporate entity.

Originally posted by dadudemon
Glad to see this. We really do need to get rid of bad class action lawsuits. Class Action Lawsuits are mostly an atrocious, disgusting, abuse of the legal system...and a shame to the US.

We've done quite a bit to curtail the poisonous CA suits, recently...which gives me a little bit of hope.

While most class-action lawsuits are shit, as the lawyers take far more than the lion's share of the profits, CAL allow the little guy a chance to challenge the corporations.

Do you really think you'd get anywhere by yourself trying to sue say a large insurance company for overcharging you for the last 5 years? No, you wouldn't, you'd spend more than was worth and you'd likely get nowhere. With a CAL, you at least can hope to get refunded for the overcharges.

Edit: I see SC basically covering this already.

Wow, you guys really don't get it at all. This means that corporations are now officially ABOVE the law since they can stipulate that plaintiffs must go into PRIVATE ARBITRATION which consumers always lose because those boards are always stacked with a revolving door of corporate cronies and corruption is rampant. 5-4 nothing. 4 of those conservative justices can easily be impeached and possibly even do some time for bribery among other things.

Originally posted by Tha C-Master
The money just went to greedy lawyers anyways.

Originally posted by Symmetric Chaos
Not legally, no, but for practical purposes it becomes impossible. No one will take the case because they're all too small. It allows for massive acts of fraud that won't be effectively and in fact cannot be punished by the courts without grinding them to a halt with hundreds of thousands of cases.

That's bad.

not to mention the resources of the company to file bogus countersuits and generally harass any individual who might bring a case

one person versus a multi-national corporation is hardly equality before the law in any practical sense

Originally posted by skekUng
RE: Blaxican, the opinion that the government has better things to do is not relevant.

Neither is this statement here. Heraderpderp.

That aside, how is it not relevant? It was relevant to DDM's point, which was that most class action lawsuits are usually a waste of money and, therefore, bad.