The end of American Class-Action Lawsuits?

[Den Valdron]

but there's a general right to due process, and people couldn't be barred from the courts entirely.

Due process!!! That's the words I was looking for. Due process. There is indeed in America an inalienable right to due process, which includes and consists of recourse to Court!

Arbitration clauses in contracts that one accepts are enforceable, however.

But only within the framework of the contract per se. For instance, if one was to argue that the contract is void ab initio, that the contract is in fundamental breach, or that the issue is outside the scope and jurisdiction of the contract, then you are outside the contract and outside the arbitration clause. All of these arguments have been used successfully.

In a larger sense, Arbitration clauses are themselves a form of 'due process.' Administrative and other forms of law suggest that you work your way up the hierarchy. So if there is an arbitration clause and an issue in dispute within the contract, generally courts will demand that you fulfill the contract and go through the process of mediation, arbitration, adjudication or whatever set out in the contract, before you should legitimately take it to court. It's a legal form of 'did you dot your 'i', cross your 't' and wash behind your ears?'

A lot of adjudication promises threaten or claim to be the final remedy. But if a Court really wants a crack at it, it'll open that sucker right up. There's a long history of appeals of unappealable arbitration clauses.

 

[Erik Mesoy]

I would like to express my very deep gratitude and satisfaction that I live in Norway, which has a consumer protection law of reasonable strength, which lets me go "bleep this, not applicable" to the great majority of clauses in contracts, licenses and agreements I allegedly enter into.

I'm not allowed to sue? Overruled by law.
I don't get a warranty? Overruled by law.
I can't claim damages of more then $5? Overruled by law.

I'll take minimal sane terms over having to negotiate everything I sign any day, TYVM, and the free market can put a sock in it. The free market is supposed to exist for the benefit of consumers, and it's a chimera anyhow.

 

[skadistic]

Then you don't know much about contracts.




You should get better lawyers.



Just friendly. I'm working off that 'smarter than the average bear' riff, which you will recall was one of Yogi Bear's favourite sayings. His sidekick was a little bear named booboo.

It's to show there's no hard feelings and I'm not taking this discussion all that seriously, booboo.



Actually, I'm trying to type with a 'yogi bear' voice, as you can see from the peculiar sentence structure. My way of having little fun. Not condescending. Just a bit of harmless light heartedness. If you feel condescended, that's just your insecurity, booboo.



Don't just settle for a page, booboo! Take a whole book. Read a book. Look it up. Any simple text on the law of contract. Or go read Cleo's reference.




I think my little friend is a little sensitive. You should lighten up, booboo.




Is booboo getting it? Hope springs eternal.




In Quebec, high school goes up to grade 13 I believe. In most Canadian provinces and American states, high school does up to grade 12. I suppose that it's possible that in some really beknighted American states high school only goes up to grade 10, who knows.

As for law as a part of High School curriculums, there's this link:

http://www.eric.ed.gov/ERICWebPorta...&ERICExtSearch_SearchType_0=no&accno=ED153932

Have a nice day, booboo

Thanks for calling me booboo. It show exactly the level of debate here. Nice link but it doesn't prove most high schools offer law classes. For claiming to be smarter then the average bear you stack up way short of the average human.

 

[Den Valdron]

Thanks for calling me booboo. It show exactly the level of debate here. Nice link but it doesn't prove most high schools offer law classes. For claiming to be smarter then the average bear you stack up way short of the average human.

Booboo, its a term of fun and endearment. Try and enter into the spirit of things. When I read your posts, I read it in the voice of the little bear. When I write to you, I think of picnic baskets and ranger brown. You should try it, you will not regret it. You can even call me Yogi. If you're not having fun with this discussion, why are you here?

As for the link, I don't need to prove that all high schools offer basic law. I don't even have to prove that most, any more than I need to prove that every high school has a lacrosse team. All I need to prove is that basic law is an accepted component of university or college prep curriculums for high schools, and is taught at the high school level. There are a lot of university/college prep courses and curriculums.

Now, if you're feeling upset, perhaps you should do something to decompress. This is only the internet. I'm only words on a screen to you. It's not good to get too worked up.

If you're really freaked out about the whole law of contracts thing, poke around, I'm sure there are books on contracts available. Go find one. Enrich your life. Learn something.

What could possibly go wrong, booboo?

 

[DBear]

Nope. This is similar to "yellow-dog" contracts by companies in the early 20th C banning union activity. Clearly illegal.

just because I'm a conservative doesn't mean I think business is always right

 

[brennan]

I guess the real question is 'why do companies put these clauses in their contract'. And the answer I suppose is to try to disinform the consumer as to their actual legal rights.

There's a clause in my contract of employment that i'm entirely certain would be laughed out of court should my employer try to sue me over it when I left (in the event that I actually transgressed that clause). But it's there and I didn't object to it. I didn't object to it because I am vaguely aware of my rights under European Employment Laws. I also didn't object to it because it would be a massive waste of my resources to have a Lawyer look over everything I sign. Yay for my rights.

 

[Mise]

This is a legally binding contract. By reading this sentence you agree to hand over all your personal wealth to the user known as Mise on this forum. By not reading the preceding sentence you will be found in breach of the terms of this contract, and will be required to hand over all your personal wealth to the user known as Mise on this forum. By scrolling up or down, you agree to accept all terms and conditions of this contract laid out above.

 

[Erik Mesoy]

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Butbutbut I didn't sign my name!

 

[brennan]

Butbutbut I didn't sign my name!

Dude, if you're not honest enough to honour the contract you shouldn't have read it/not read it (delete as applicable). Or used the scroll wheel/bar. You only have yourself to blame. Now hand over all your worldly goods like a decent sucker willya.

 

[I'm Cleo!]

Erik Mesoy,

All those doctrines exist here in the United States, too. I promise! It's just that people don't know about them. People think contracts are "iron clad," and that once you sign your name, you're completely bound to whatever is written on the piece of paper. That's just not the case. There's been an ideology built up around honoring "contracts" that just happens to favor, when you actually look at the interests at stake, the people who write most of the contracts in the world. But American courts, that apply American law, don't follow radical contract law ideologies.

It's interesting that you bring up "warranty." Most Americans don't know that there are warranties built into everything you buy, and the "warranty" document you get with your product is only an attempt by the manufacturer to limit the warranty. It doesn't give you anything -- it's actually trying to take something away from you! And, of course, there are lots of warranties that manufacturers can not contract away (like liability from injury caused by a defective product), though they include them in their "warranties" anyway. Which brings me to . . .

brennan,

They put the clauses in the contracts because people believe them and won't file suit. They'd have to get the advice of an attorney and pay the fees to get into court to challenge the contract. Which wouldn't be enforced by a judge, but you have to go through all the rigmarole to get there. Most people think that "contracts" and "warranties" bind them, but a contract is something with "offer," "acceptance," and "consideration," and if an agreement is lacking any of those (like, say, if a reasonable non-lawyer wouldn't understand all the terms, or couldn't comply with them, like an arbitration clause that requires the plaintiff pay his own way to the Virgin Islands for the arbitration), it's not a contract (or, at least, the offending term is not part of the contract).

And yet people don't know this stuff. Why? It's not like giant media conglomerates and publishing houses write lots of contracts with which they attempt to bind their custo . . . oh, wait. Never mind.

Cleo

 

[Erik Mesoy]

Erik Mesoy,

All those doctrines exist here in the United States, too. I promise!

All right, but I sort of doubt that they're quite as extensive. Do you get an unvoidable five-year warranty to repair or replace your laptop, washing machine or cellphone in the US? I do here. (And I regularly see press releases from international company executives claiming "Norwegian law is wrong" after they've been sued into warranty compliance, which makes no sense. )

It's just that people don't know about them.

Well, steal the Norwegian school system and make contract law a large part of the obligatory economics class, then.

People think contracts are "iron clad," and that once you sign your name, you're completely bound to whatever is written on the piece of paper. That's just not the case. There's been an ideology built up around honoring "contracts" that just happens to favor, when you actually look at the interests at stake, the people who write most of the contracts in the world.
[And yet people don't know this stuff. Why? It's not like giant media conglomerates and publishing houses write lots of contracts with which they attempt to bind their custo . . . oh, wait. Never mind.]

I was torn here between a mock conservative response excoriating you for imagining a big business conspiracy and a mock liberal response exhorting you to explain the big business conspiracy in detail.

But American courts, that apply American law, don't follow radical contract law ideologies.

How much do you know about the SCO v. Novell/IBM/Linux/Whoever set of lawsuits? I've been following those for a few years now, and my view of American courts is rather cynical: they may not follow radical contract law ideologies, but they don't seem to apply very much American law either, and the justice they mete out is so delayed (SCO gets a court order to produce evidence, and five years later, they've produced nothing and haven't been sanctioned for it) that it's almost denied, not to mention the cost of lawyers.

 

[damunzy]

There are people who think that a contract should be enforced no matter what. That's seriously bad idea.

A couple of months ago I was on a ferry between Canada and the US. The terms of the contract said that if an employee of the ferry service assaulted me in transit that I could not sue and that in any case, I agree that US courts have no jurisdiction in the matter.

Contracts like these should simply not be permitted.

That they are allowed is just a further attempt to shield firms from responsibility for their actions.

I once had to sign a contract in order to stay at a rental house (the 2nd highest permanent residence in USA) that stated that I would not sue them or their employees even if one of their employees were negligent. Would that hold up in court? Maybe, maybe not. But, since I wanted to go for my father's wedding (it was being held there) I had very little choice but sign it.

A law outlawing companies requiring you to give up rights would be nice...but, I guess that could backfire. Most of the eXtreme sports and entertainment would probably be hurt by this.

I voted 2. Not fair - because, as the article states, there isn't an alternate choice because all 4 of the main carriers have these clauses. Under the idea of the companies using our public airwaves to provide their services they lose some of their "rights" on restricting the rights of their consumers, IMO.

 

[I'm Cleo!]

Erik,

We don't get five-year warranties for replacement for everything we buy, but we do get everything you mentioned in the post I replied to -- we can sue, we get warranties, and liquidation of damages clauses are frequently thrown out.

And you don't even need a conspiracy theory to explain why Americans don't know about this. It's simple self-interest. Why would a big company publish a book, "How to beat big companies?" It would be a bad business decision. Anyone who supported that should get fired.

(Okay, maybe there is a little conspiracy theory. Lawyers don't allow people who haven't joined a particular club to represent others in court, so people have to hire lawyers, and then they artificially limit the number of lawyers to drive up the price. That's an actual conspiracy. )

I don't know anything about the SCO suits. Reading the Wikipedia page, it looks like what we call "Complex Litigation," and I wouldn't feel comfortable speaking intelligently about it unless I read a ton of stuff. But in litigation like that, actions take years to work out, and it's not unusual that discovery could last five years. Sometimes there are warehouses full of bankers' boxes to go through. The Wikipedia page indicates that the original complaint claimed $1 billion in damages; the judges and parties are going to be careful.

Cleo

 

[I'm Cleo!]

damunzy,

It's almost impossible to contract away liability for actual negligence.

Additionally, most sports and stuff don't need formal waivers of liability. It's all covered by a tort doctrine called "assumption of the risk." If you participate in a MMA fight, you consent to getting your ass kicked. It doesn't have anything to do with contract law. Good point to bring up, though.

Cleo

 

[joycem10]

Just some numbers for anyone interested. The cost to bring a case to the point where you have briefed and filed a Motion to Dismiss in a decent sized class action lawsuit can run between 300-400K. This is assuming a mid-range firm, not someone like Skadden Arps, Clifford Chance or Jones Day. If you're using a white stocking NY, DC or Boston firm, the numbers can double.

Assuming you fail at MTD, likely unless the Plaintiff's firm is incompetent or the case is completely without merit, you're looking at another 200-300K on class certification, assuming a decent sized class. Discovery will likely pop you over 1mil, and add another 300k or so to finalize your Motion for Summary Judgment. In a case with stakes this big, there will be an appeal. So add on another 100-200K to brief and argue the appeal and pray theres no demand for an en banc hearing or motion for cert.

The major Plaintiffs firms know these numbers and, like the former Milberg Weiss firm, use them to extort settlement in cases that may have just enough merit to get past the MTD stage but would not survive at summary judgment.

Thats why companies want to try to avoid the class action process.

 

[LAnkou]

In France, we have of course doctrines too...

Some may seem very fun to you (the renting agency can't ask compensation fees if you ask to get your home rent bill sent at home, a consumer can never see his monthly fees rising, but a decrease "other than promotionnal action" must automatically be applied)

about class actions, it's something that a lot of people would like to get in France. Today, it's hard to get one (since there's no legal tool). the closest from a class action was a consumer association against the three cellular phone company for market oligopoly. The highest fee in a judgement (over 500 millions&#8364 in France

 

[Den Valdron]

Of course, the other side of the phone is that the lawyers representing the consumer class come away with absolutely nothing in the event of a successful motion to dismiss.
The expenses on this side would be about the same as the expenses involved in defending, or perhaps greater, given burdens of proof. These law firms are generally considerably smaller than the defending corporation, and consequently, their risk is really quite disproportionate. The potential cost to them of a failed suit in terms of lost wasted time and effort, lost revenue and lost opportunity costs are vast.

Hence, law firms dealing with cases of this sort are highly motivated to be as sure as possible of their case. They generally avoid frivolous or clearly meritless cases like the plague. Even where a case has merit, there has to be a judicious calculation vis a vis the chances of success and the possible returns.

For this reason, proponents of these sorts of cases are generally pretty willing to sit down and negotiate at any point in the proceeding. That's not always the case on the side of the defendants, who always have deep pockets and occasionally have bad attitudes.

 

[Masquerouge]

This is a legally binding contract. By reading this sentence you agree to hand over all your personal wealth to the user known as Mise on this forum. By not reading the preceding sentence you will be found in breach of the terms of this contract, and will be required to hand over all your personal wealth to the user known as Mise on this forum. By scrolling up or down, you agree to accept all terms and conditions of this contract laid out above.

Very clever