The New Trick To Suing Your Phone Company

The Supreme Court has waged war on class action suits, but there may be a workaround to take the telecom companies to court.

There are many affronts to basic concepts of justice to spring from the Roberts Court over the last 10 years. The declaration that racism isn’t a big deal anymore decision of course. Or when they declared open season on harassing your interns. And it’s impossible to forget the whole your boss can impose religious beliefs on you thing.

Much less sexy, but equally unjust, is the Court’s approach to class action waivers in arbitration clauses. With cynical faux naïveté, the Court upholds the “right to contract” as though Cletus signing a 10-page cellphone contract in 4-point font drafted by a Biglaw firm billing out tens of thousands a day for their effort is an equitable “meeting of the minds.” This is how you end up a Human Centipede. And one of the rights that consumers — the classy word for Cletus — and the company equitably agreed upon was the fact that Cletus was giving up his right to realistically take his phone company to court no matter what they do.

Which makes everything worse for everyone since lawsuits aren’t solely about individual vindication, they’re disincentives to corporate irresponsibility. If there’s no risk of getting sued, there’s not much to keep companies honest.

To break this down, Congress saw people getting harmed by large entities without a realistic hope of tackling the financial behemoths in court. So they explicitly created a law to give folks a chance to band together to vindicate their rights. And when the companies got butthurt about having to defend themselves for screwing their customers, they responded by saying, “Well… what if we just put in fine print that our customers live in a world where that law doesn’t exist?” and the Supreme Court said, “Awesome.”

Because corporations are people. People you can’t sue.

How committed is this Court to the cause of upholding the stacked deck “negotiated” by parties on nothing approaching equal footing? So committed that it threw states’ rights under the bus to get there. Just when you thought there were very few laws the “laboratories of democracy” couldn’t make, the Court in AT&T Mobility LLC v. Concepcion struck down California’s state law that rendered such a rights forfeiture “unconscionable.” It’s Big Telecom’s world, we’re all just living in it. And probably only getting one bar for $100/month while doing it.

Most folks have written off the David and Goliath pipe dream of financing a drawn out civil case against a Fortune 500 company. But some lawyers have found a clever workaround. It doesn’t restore a customer’s class action rights, but it may be the next best thing.

Sponsored

A Chicago attorney named Ben Kinney read the AT&T v. Conception opinion and figured there must be some way for customers to redress their grievances no matter what these veritable contracts of adhesion say. Thus CrowdSuit was born. CrowdSuit, which recently teamed up with Robins, Kaplan, Miller, and Ciresi out of Minneapolis, accepts assigned individual claims and wants to use these to bring massive suits against phone companies as the holder of a sufficiently large number of individual claims. With enough aggregated claims, the payout can actually be worth its while to litigate.

Now the bad news is that the original claim holder gets nothing out of the litigation. Well, nothing directly anyway. Indirectly, if the case results in forcing the phone company to change its policies and lower its bills, the customer wins over the long-haul. Considering a class action was only going to pay off 30 cents when it was all said and done, that’s not such a big deal.

And I guess there’s one more thing in it for the customer: CrowdSuit donates half of the eventual recovery to a selected charity voted on when the individual claim is assigned. While a few cents isn’t a big deal to an individual, a lot of aggregated money can make a difference to a charity.

It’s a novel approach to the hostile environment the Roberts Court created and unfortunately the tactic may need to see a lot more use. Right now, CrowdSuit is focused on phone companies — it recently voluntarily dismissed a suit against AT&T to further tailor the complaint — but CrowdSuit says it’s received requests to tackle cable companies (I’d love to see someone actually drag them to court on their pretty much proven throttling), online gaming services, and even Uber. It’s also heard from employment and antitrust firms about employing this strategy in those fields. Class action waivers are cropping up all over the place in light of the Court’s stance, and CrowdSuit may have found the whack-a-mole mallet consumers need.

As Kinney puts it, “Class actions are dead. Crowdsuits are just beginning.”

Sponsored

Until the Supreme Court decides it’s OK to add a clause barring customers from assigning claims.

What Is CrowdSuit? [Crowdsuit]
Thrown Out of Court: How corporations became people you can’t sue. [Washington Monthly]

Earlier: How Does This Week Affect The Legacies Of The Nine Supreme Court Justices?
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