Class warfare.

Friday, November 5th, 2010 @ 12:11 am | Politics

That’s what they call it when you fight back. Meanwhile, they strip everything away from you:

It hasn’t gotten a lot of press, but a case involving AT&T that goes before the U.S. Supreme Court next week has sweeping ramifications for potentially millions of consumers.

If a majority of the nine justices vote the telecom giant’s way, any business that issues a contract to customers — such as for credit cards, cellphones or cable TV — would be able to prevent them from joining class-action lawsuits.

This would take away in such cases arguably the most powerful legal tool available to the little guy, particularly in cases involving relatively small amounts of money. Class-action suits allow plaintiffs to band together in seeking compensation or redress, thus giving substantially more heft to their claims.

Oh, I’m sure AT&T has crafted some lovely contracts, and hey, if you don’t want to sign it, you don’t have to. This kind of logic appeals innately to the right, who are hostile to anything that empowers an individual to resist corporate tyranny and abuse. See, if it’s private, it’s not tyranny. So any rigging of the game that corporations and moneyed interests can get away with, any amount of control they wish to attain over your life, it’s all excused. You’ll sign your life away in that contract, and you’ll take what the free market gives you, even if it’s chains.

I’m an actual libertarian because I am wary of tyranny from either public or private forces. I don’t discriminate that way.

Yet the Roberts court has been an utter enemy of the people, scoffing at anything they would do, any way they could unite to resist the tyranny of money. So now we have to wonder if the ability of citizens to join together to sue a giant entity is at threat. Or should I say the liberty of citizens to unite? Of course, Republicans just like to say the word, “freedom.” When it comes down to it, they are in complete subservience to private masters, and far too intrusive in our lives due to their overwhelming “social conservatism.” Should this activist Roberts court strip away the rights of citizens to unite to seek redress for their grievances, freedom will suffer a great loss.

-hw

10 Responses to “Class warfare.”

  1. Jldmeyer Says:

    If this bill passes, it will be the biggest Taxation without Representation ever! AT&T will be able to raise/change fees and rake you over with the fine print and there will be nothing you can do about it to defend yourself. If you mistakenly get a $5000 cell phone bill then too bad. Pay it off or you are going to court. How lovely. Yet more freedoms to be taken away for the sake of capitalism and liberty.

  2. AJKamper Says:

    That’s just not true. Consider:

    1) The average class action ends up as a settlement wherein the big company protects itself from further liability for what’s usually a small portion of their bottom line. The average consumer gets, oh, ten bucks as part of the class action. (The big class actions come from stuff like environmental disasters and accidents where no one is signing any contract at all.) Meanwhile, the lawyers, picking up a small percentage of millions of dollars, get really rich for not all that much work. It’s a scam.

    2) This is just for class actions. If AT&T screws you over on the bill, you can still sue them individually. The class action is only suitable when AT&T screws a million people over by fifteen bucks, not when it screws you over for $5K.

    3) The big preventative club over AT&T’s head is something like unlawful restraint of trade or similar regulatory provisions. Those are not only more effective than class actions, but they’re proactive and don’t get the lawyers rich.

    This kind of class action is little more than a scam to insulate big companies from liability and get lawyers rich while providing no particular protection to consumers. They’re awful. Good riddance, I say.

  3. AJKamper Says:

    That said, I also don’t think that this should be decided merely on “What we think is best as a matter of policy” but on what the law and our traditions say about the nature of class actions. Whether this is a good idea or not, people don’t have a “right” to a class-action; it’s extended at Congress’ pleasure as a way to give individual plaintiffs power over large defendants. When put that way, there’s no legal reason why that choice couldn’t be contracted away. If Congress doesn’t like it, they should change the law; I don’t think that the only guiding light in interpretation should be our personal policy preferences.

  4. ladk Says:

    How dare AT&T define terms that you must accept before you can do business with them. It’s not like there are other companies that offer similar services in a non tyrannical manner.

  5. Henry Whistler Says:

    “The class action is only suitable when AT&T screws a million people over by fifteen bucks, not when it screws you over for $5K.”

    And how is that not worthy of being fought?

  6. AJKamper Says:

    Henry:

    “And how is that not worthy of being fought?”

    It’s not an amount that’s going to have a significant effect on the consumers’ life; most of us don’t care when we win a class-action suit. (Additionally, many consumers who do take that settlement might end screwing themselves out of potentially higher damages–like if that $50 outage led to $2K in damages, hypothetically. Such events are rare but not unheard of.) So the point of it is not to make the consumers whole at all, but to make sure we punish the wrongdoers–to fine them, basically.

    Well, if that’s the case, why use these class-action settlements that are basically collusion among the lawyers to earn hefty fees, and leave a sword of Damocles as a threat dangling over corporations’ head that even for quasi-frivolous actions may need a settlement just to go away? The purpose of this kind of class-action is essentially regulatory in nature–so use regulations to do the same job. Give the Federal Trade Commission broad powers to define unfair trade practices and to institute per-infraction fines that can aggregate in a hurry. Trying to use the courts for this sort of thing just gums up the works.

  7. Henry Whistler Says:

    I really don’t get it. Class action lawsuits are bad because most people aren’t really that bad off, yet they could be screwing themselves out of a better deal?

    Sword of Damocles? Isn’t that true of anybody who can be sued? And yet it’s not an effective dissuader?

    I dunno, if you say better regulation, I’d say that’s certainly not a bad idea, but class action lawsuits look to me like an important tool for people to band together and fight, whereas regulators can be fought politically.

    And lawyers get rich. The sky is blue, water is wet. I’m not saying there isn’t some grift, but that’s emblematic of the entire justice system.

  8. AJKamper Says:

    “I really don’t get it. Class action lawsuits are bad because most people aren’t really that bad off, yet they could be screwing themselves out of a better deal”

    Sorry, I was much less than clear. For _most_ people, they don’t stand to gain very much from a class action. It’s rarely the sort of amount that will change people’s lives. There are exceptions–for example, mass tort claims like environmental disasters, or getting environmental injunctions. But in general, those are not the sorts of things that will arise out of a contract.

    Moreover, occasionally there does appear someone who has had significantly more damages than the class as a whole. But, whoops–the person returned the opt-in form and cut him/herself off from the possibility of gaining more. This is why I wouldn’t be surprised if someone like Toyota didn’t have people waive their class-action rights even if they could: class actions for them represent the possibility of avoiding worse liability if a hundred people had to get brakes replaced, but only one had his car go out of control and hit a tree. Not as applicable here, but it adds to my general distaste.

    “Sword of Damocles? Isn’t that true of anybody who can be sued? And yet it’s not an effective dissuader?”

    Because of the incredible fees relative to the individual harm done, lawyers salivate at the possibility of class actions, so they seek to enforce them at any opportunity. In other words, individuals gain far less than the harm caused to the corporations in many instances.

    That’s probably my main beef. If we measure people’s well-being in terms of their overall happiness, then even the aggregate gain from a class-action settlement for low values (like the AT&T thing) is minimal, completely disproportionate to both the harm and the risk to corporations. I’m pretty far from a corporate shill, but most class-action suits aren’t about people banding together to fight: it’s about ten plaintiffs who feel taken advantage of and fight, enormous fees for lawyers goading them on, and a nominal settlement that most customers will see and immediately forget. Heck, much of the time the settlement is a coupon, which actually helps defendants’ business more than anything (and fills the lawyers’ pockets).

    I think that there’s a danger in romanticizing class actions, because they are the collective power of the little guy against some large and powerful entity. But the reality is pretty far removed.

  9. Phoenician in a time of Romans Says:

    It’s not an amount that’s going to have a significant effect on the consumers’ life; most of us don’t care when we win a class-action suit.

    Which is to say that you’re opening yourself up to let the entire population be screwed by every company they do business with, as long as it’s only a little at a time?

  10. AJKamper Says:

    PiatoR:

    That’s why you use regulatory penalties instead. Same threat, less chance of frivolous lawsuits.

    I don’t want to downplay the harm caused by small abuses aggregated over millions of customers: I am just unsure that class actions are the best route to deal with them.