Massive Win for Corporations... again!!!

phobicsquirrel

So now the Supreme Court makes another win for corporations, this time taking away the ability for people to ban together to sue a large company over damages. Someone losing a couple of grand from a large company are SOL unless they can go into what is called a "class" action suit, which means that hundreds, thousands or millions of people all ban together to bring up damages. This is done because the cost of bringing up a case against large companies cost several million dollars which is never going to happen if a single customer or consumer has a few grand in losses. So now we as citizens are even more at risk of being taken for.

http://articles.latimes.com/2011/apr/28/business/la-fi-court-class-action-20110428

http://slumz.boxden.com/f5/may-1-companies-can-block-customers-class-action-lawsuits-supreme-court-rules-1537589/

xmacro

Pheebs, stick to the soft socialism you typically peddle; this stuff is out of your league.

Class actions work like this; there are generally 5 requirements:

Numerosity
adequate number of plaintiffs; typically requires thousands

Commonality
common damages and legal issues between all defendants; meaning all defendants were injured in the same way by the same entity

Typicality
each class member's claim must come from the same event that gave rise to the complaint, and must make the same legal argument

Adequacy of Representation
the representative plaintiff will adequately protect and represent the interest of the class; this means the representative plaintiff must be typical of the class

Viability of Defendant
although it is not a requirement of the court, it is reasonable to assume that if the accused does not have the means to compensate for the alleged damages and legal costs, it would be difficult to entice a law firm to represent the class. This is why class-actions are almost never initiated against mom-and-pop stores - it's simply not worth the law firms time to sue, since they would likely never recover enough to pay for their expenses

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What does all this mean? Class-actions are for situations where the same corporation being sued by something like 20,000 people individually, so it's just too much to handle - it's a type of consolidation of individual suits. What happens in practice is that it typically recovers millions for the Plaintiff attorney, and a few cents for the individuals in the class. If you'd ever participated in a class action, you'd know what I mean when you get that check in the mail.

Furthermore, if a person loses "a few thousand", they can sue and hire a lawyer who works on contingency - meaning the person suing doesn't pay a dime even if they lose. Believe it or not, the legal system thought of the problems of David vs Goliath long before you were sucking your thumb in diapers.

Third, like I said (it bears repeating) it doesn't cost the person suing millions of dollars - most Plaintiffs lawyers who take these kinds of cases work on contingency, meaning the plaintiff doesn't pay a cent and the lawyers bear all the risk.

Last, this ruling does one thing - it upholds the contract you signed and says you can't cry foul after-the-fact when things didn't turn out the way you planned. Contracts exist for the sole purpose of making the future predictable, so parties know where they stand. If you don't want to submit to binding arbitration, don't sign or agree to the contract. Simple as that - you know what you're getting when you sign it, and you can't complain after-the-fact that you didn't know

So what does this ruling mean in practice? If a company injures you, you can still sue for millions in damages, by yourself, and you can still hire a lawyer to work on contingency so you never pay a dime and the law firm takes all the risk of losing - this ruling doesn't affect YOU at all.

It only affects trial lawyers who cobble together large classes of people, then sue, hoping the court will throw out the arbitration contract and award the class millions of dollars, 30-40% of which will go to the lawyers, while the rest is distributed to the class, which typically means each member of the class will get, literally, a fwe cents, maybe even a few dollars if they're lucky.

This ruling doesn't affect YOU at all - it affects trial lawyers who specialize in class actions. So like I said, stick to your typical soft socialism/repubs-and-corporations-are-trying-to-kill-everyone-type of posts - the legal profession is out of your league.

beatnic

Massive! Evil corporations. Hey Phobic, I see you own your own business. Do you employ people?

fla-gypsy

This seems like corpophobia, oh wait it is the squirrel again, nevermind

PuroFreak

Yea, this isn't a win for corporations, its a win for personal responsibility. The couple here in question failed to read their contract, or maybe they felt like they are better than the contract they signed... Either way they made a choice to sign that contract. No corporation forced them to. Maybe this will make people slow down and actually read things before they sign them... I know that's probably too much to ask of people like the couple in this story.