Supreme Court Again Makes It Clear: Companies Can Erode Your Legal Rights Via Mouse Print
from the idiotic-precedent dept
For years, AT&T worked tirelessly to erode its customers' legal rights, using mouse print in its terms of service preventing consumers from participating in lawsuits against the company. Instead, customers were forced into binding arbitration, where arbitrators employed by the company unsurprisingly rule in their employer's favor a huge percentage of the time. Initially, the lower courts derided this greasy behavior for what it was: an attempt by AT&T to eliminate customer legal rights and save a buck. And with AT&T's massive history of fraud, you can imagine AT&T was looking to save quite a bit.But in 2011 the Supreme Court's AT&T Mobility v. Concepcion ruling declared that what AT&T was doing was perfectly ok. While lower courts saw this as an "unconscionable" abuse of consumer rights and the law, the Supreme Court bought into the ongoing myth that binding arbitration is a hyper-efficient, modern alternative to class actions. And again this week, the highest court in the land again proclaimed that this kind of sleazy fine-print is perfectly ok.
For a few years now DirecTV (ironically now owned by AT&T) customers have been trying to sue the satellite provider over its early termination fee (ETF) policies. A California court had invalidated the binding arbitration clause in DirecTV's contract with customers, since DirecTV's contract language stated that such a provision was unenforceable if the "law in your state" contradicted it. Unsurprisingly, this week's 6-3 ruling in DirecTV Inc. v. Imburgia (pdf) reiterated the 2011 federal ruling trumps all:
"No one denies that lower courts must follow this Court’s holding in Concepcion. The fact that Concepcion was a closely divided case, resulting in a decision from which four Justices dissented, has no bearing on that undisputed obligation. Lower court judges are certainly free to note their disagreement with a decision of this Court. But the “Supremacy Clause forbids state courts to dissociate themselves from federal law because of disagreement with its content or a refusal to recognize the superior authority of its source."If you're solely looking at the precedent set by Concepcion, that of course makes legal sense. Breyer (who dissented on the original ruling) is simply telling lower courts they must adhere to the federal ruling, even if they don't agree with it. Of course that doesn't magically make the original ruling good, nor does it obfuscate the fact that the Supreme Court is just as polluted as Congress when it comes to partisan patty cake and corporate influence.
In short, the Supreme Court bought into the myth that arbitration is a hyper-efficient alternative to the greed of class action lawsuits, even though there's an endless ocean of data highlighting how that's simply not the case. Class action lawsuits are indisputably obnoxious for all the usual reasons (I got $1 and the lawyer got a new boat!). But occasionally class actions do benefit consumers and force change (especially on the telecom front), and until the people complaining construct a better mouse trap, class actions are often the best bad idea we've got.
The Supreme Court's alternate-reality belief that arbitration is a sane alternative is notably worse. Since AT&T's original win, countless companies from banks to video game vendors now foist binding arbitration upon consumers, forcing them into a rigged apparatus where consumers lose the vast majority of the time, companies pay smaller amounts then ever before, and there's less meaningful change than ever. Thanks to the Supreme Court, that's something we'll all get to enjoy for many, many years to come.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: arbitration, binding arbitration, class action, supreme court
Companies: directv
Reader Comments
Subscribe: RSS
View by: Time | Thread
Accept them or don't, it's your right.
[ link to this | view in chronology ]
Re:
For a doctor?!?
Heck no!
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Free market capitalism.
"Right-wing" (or "left-wing") is a meaningless phrase to me, however you could call me a "free market enthusiast" (I'm pretty much a "Randroid"). I've always believed if you act a la P. T. Barnum ("there's a sucker born every minute") you're very quickly going to run out of repeat customers, and previous customers are going to spread the word to your potential customers not to trust you. Barnum's strategy should buy you early bankruptcy, in a perfect world.
It's very frustrating to those like me who think this way that it no longer appears to work. It astonishes me that Walmart is still in business. They sell crap that after one use is fit only for recycling or a landfill, yet people keep shopping there anyway.
Adam Smith's "invisible hand" (free market forces) appears to have lost a wrist-wrestling match with the "mailed fist in a velvet glove" (gov't directed mixed market planned economy).
[ link to this | view in chronology ]
Re: Free market capitalism.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
AT&T is an evil company
I had AT&T for my landline but switched to ooma.com because they charged too much for a landline.
I had AT&T cellular for my wife and I. We were paying a whooping $30.00/month extra for a data plans on top of what I thought was a sky high phone plan. Got AT&T net10 SIMs and now we are at a very reasonable $90.00 total for phone and 5Gb data.
[ link to this | view in chronology ]
Re: AT&T is an evil company
But all music and movie streaming is free, so you'll never use it.
[ link to this | view in chronology ]
Re: Re: AT&T is an evil company
Besides, T-Mobile coverage sucks where we are at and at $45.00/phone it is much better for us than with AT&T proper but the same signal. On the flip side, Net10's customer service sucks so there's that. Good news is that we don't need our hands held regarding phones since we are Nexus ASOP Android users.
I can only imagine the slogfest Net10 iPhone users have.
:P
[ link to this | view in chronology ]
Re: Re: AT&T is an evil company
[ link to this | view in chronology ]
"By advertising to this party you are agreeing to:" etc
The best way to fix the loopholes is for the common people to exploit them against the companies.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
hypothetically...
[ link to this | view in chronology ]
Slightly misleading
Your elected representatives (or those of your great-grandparents, in this case) passed an awful law, with numerous unforeseen consequences, but it is not inherently Unconstitutional. As pointed out many times recently, they refuse to be judges of the wisdom of pieces of legislation, merely judges of its legality.
They got this one right, but that doesn't mean the law is just.
[ link to this | view in chronology ]
Re: Slightly misleading
[ link to this | view in chronology ]
Re: Slightly misleading
It is if it takes away your right to due process.
[ link to this | view in chronology ]
Lousy solutions
Insist that any House or Senate candidates currently or in the future running for office commit to and sign an absolutely binding contract that they will force congress to either eliminate binding arbitration as a concept or create a consumer oriented version of it that the corporations will refuse to use.
I am not holding my breath for either.
[ link to this | view in chronology ]
Re: Lousy solutions
Good luck finding a phone company, cell or otherwise, that doesn't have this in their contracts.
Forced arbitration should go the way of forced gag orders like the ones from Roca Labs - an attempted invasion of the rights of every single customer of the business should not be tolerated. If class actions are a problem, I'd rather see specific legislation targeting those problems. But making a two-tiered justice system where those businesses with enough leverage can simply opt out makes no sense.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
Karl did mention that (I got a dollar, and the lawyer got a yacht!). He also mentioned they're a lousy tool, but the best lousy tool we've got.
Read the article next time. You might learn something.
[ link to this | view in chronology ]
Re: Re:
Honestly, I would disagree with this statement. If everyone involved in a class action filed a local civil lawsuit in their own jurisdiction, the system would collapse. Imagine every DirecTV subscriber filing a local suit against them in the state county legal systems, there's no way they would be able to respond and the whole system would need reworking. This is the reason for Class Action suits in the first place, and I'm sure that many local governments would end up siding with individuals because of lack of response.
[ link to this | view in chronology ]
Re: Re: Re:
Such a strategy was how the Church of Scientology won it's tax-exempt status and recognition as a religion by the US government, by burying the IRS in so many lawsuits that the agency had little choice but to surrender.
[ link to this | view in chronology ]
Re: Re: Re: Re:
Such a strategy was how the Church of Scientology won it's tax-exempt status and recognition as a religion by the US government, by burying the IRS in so many lawsuits that the agency had little choice but to surrender.
That might be effective, but it's not necessarily just. I would rather have the case decided on its merits, not because one side can't afford to defend itself against the lawsuits.
[ link to this | view in chronology ]
Perhaps the time has come to set up a government agency whose job it is to sue corporations on behalf of consumers? Instead of suing the corporation, the class would petition this government agency which (should the claim agree with the letter of the law) would sue the corporation in its own name and, if it should win, distribute appropriate compensation to consumers.
[ link to this | view in chronology ]
Re:
The Supreme Court seems to be going out of its way to make its decisions as narrow and meaningless as possible, so maybe they would be happy to have fewer problematic cases to decide. They keep to keep the nice job without having to actually do difficult things.
[ link to this | view in chronology ]
Choice of arbitrators?
If it's only that an arbitration process must be used, what's to stop the customer from choosing their own arbitrator? That would certainly sway the balance back to the customer's favour somewhat.
[ link to this | view in chronology ]
Re: Choice of arbitrators?
Don't know for sure offhand, but if I had to guess most arbitration clauses probably state that the company is the one that chooses.
If it's only that an arbitration process must be used, what's to stop the customer from choosing their own arbitrator? That would certainly sway the balance back to the customer's favour somewhat.
No, it wouldn't. The arbitrators are going to see you once, whereas they might be seeing a given company multiple times. Given the arbitrators aren't in it for the good of their hearts, but for money, they have a very real interest in being known for ruling for companies, because if they don't, then companies will just go elsewhere.
[ link to this | view in chronology ]
gov't regulated arbitration
[ link to this | view in chronology ]
Re: gov't regulated arbitration
[ link to this | view in chronology ]
Re: Re: gov't regulated arbitration
Oh yeah! It might make you want to make your customers even happier than they already are with you. You might be tempted to improve your products/services or shave down the cost of producing them so they want or can afford more of them or, gawd forbid, they might tell their friends that you do good work. Aiiiiieeee! You might even (Pthoooo!) get rich! Mein Gott!?!
Or, was there another corrupting influence that you were thinking of? The only other ones I can think of involve bribing politicians for preferential regulations and laws that lock out competition.
Or, can the simplistic, moldy old Marxist epithets which never made a lick of sense the first time some envious twit propounded them.
[ link to this | view in chronology ]
Re: Re: Re: gov't regulated arbitration
* In the case before me, there are two parties: the company and the customer.
* The company will be involved in many arbitration cases in the future.
* If I decide in favor of the company, the company will be more likely to hire me again for those future arbitration cases.
* If I decide against the company, the company will be less likely to hire me again for those future arbitration cases.
* The customer will very likely never be involved in another arbitration case, no matter how I decide this case. Therefore, the customer is unlikely to hire me again, no matter how I decide this case.
* Therefore, if I decide against the company, I am likely to make less money in the future.
* Therefore, in order to make the most profit, I should decide in favor of the company - regardless of what the actual merits of the case may be.
This is an example of what is known as a "perverse incentive", where what is in the best interest of one of the parties to a transaction is in conflict with the design goals of the system which the transaction is a part.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
This ruling is neither sane nor sober. It's a sellout.
So what do we call these judges, then? I'm thinking "Neoreactionary" might be a good fit given their pro-corporate authoritarian tendencies.
[ link to this | view in chronology ]
Re: Re:
We called them part of "The Establishment" (or "existing order", or even "The Man" :-) back in the '60s. Their job as they see it is to uphold the status quo. It's the social societal version of the "stasis field" from Sci-Fi.
Ignorant fools can't accept that the only constant is change.
[ link to this | view in chronology ]
I used to work in a call center (I'm sorry) working for Qwest, who had a deal with DirecTV for bundling packages, making selling DirecTV one of our responsibilities (I'm REALLY sorry).
Before the hate flies in, no I did not enjoy my time as a telemarketer, no I would not go back to it if it was the only way of feeding myself, and no I never EVER successfully sold a DirecTV package (I don't know how my conscience would have survived). Honestly, I barely even TRIED, dispute pressure from management, because ~I~ didn't agree with DirecTV's terms surrounding early termination.
I got to hear horror stories from customers who called to cancel WITHIN AN HOUR OF THE TECH LEAVING, and being told they would be responsible for several hundred dollars worth of cancellation fees. I also failed a fair number of quality reviews for not pressing these customers harder on DirecTV.
(Yes, when you tell them you will hang up if they mention a product, and they don't mention the product, the sales rep has a good chance of getting in trouble, even if they successfully made a sale off of you.)
Initially, we only had to collect credit card information based on credit checks (which wound up being pretty much every time anyway), but then we were informed that we needed to collect credit card information in all cases, because DirecTV was implimenting a $20 'handling fee', which apparently was to cover the tech, who had to come to install the service anyway, bringing the hardware to the customer.
One of the campaign supervisors, during a 'pep talk' (it was never very peppy), informed us to address this credit card concern by informing customers that they could call DirecTV's loyalty department to contest the fee under threat of cancellation.
I asked 'Isn't the customer liable for over $300 of early termination fees the moment the tech leaves the property?'
His response?
"It's not our problem at that point.".
I had to go over his head to the floor supervisor to get this 'policy' corrected before new, impressionable agents (I was new, but thankfully not impressionable) seriously screwed over a bunch of people! This was also when I learned no... seriously... this is ACTUAL DirecTV policy. (The early termination fees, not his suggestion of directing new customers to DirecTV's loyalty department.)
I contacted DirecTV's loyalty department later, independently, to verify whether or not customers would be told to either 'Pay the $20, or the termination fees' and as informed that yes, customers who call in to Loyalty to cancel are told they are bound to these fees, regardless of how few minutes they have had the service.
I always thought I would be good at sales because I'm good at giving people what they want. I quickly learned sales is not about giving people what they want. It's about tricking people into accepting what they don't want. I now annoy sales agents to no end by picking apart terms, conditions and contracts.
I have made cell phone agents very uncomfortable by diving into their 'unlimited' plans and exposing (loudly, in the store) exactly what people are signing up for.
I also go out of my way to praise sales agents who take the time to actually address these things when I ask about them, without desperately trying to change the conversation. To their managers and supervisors.
As an unrelated note... I honestly think everyone who messes with, cusses out or lectures a telemarketer should be required to try BEING one for two months.
You think it's frustrating being called? Trying being the one getting your head chewed off for trying to do your damn job while the people in charge of motivating you constantly reinforce that you are not doing enough to MAKE angry people buy things.
Never in my life have I more wanted to hurt someone than when I hear demands for my personal home phone number, or mocking retorts to 'go find a real job'.
Had a contest with a teacher once to see who makes less money.
They were MUCH nicer after learning just how little I got paid for the abuse I suffered. Some campaigns even got away with paying less than minimum wage because they had a 'commission structure' that most agents were consistently JUST failing to meet, while being told 'We have the highest commission revenue potential of all the campaigns in the call center'.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
I'd love to see what you'd choose to do if faced with inconveniencing people for a living, or starving to death.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
It makes you feel sympathetic towards Marie Antoinette. She too lived in a bubble, never seeing the outside of Versaille. So, when she heard the peasants were starving for lack of bread, it was perfectly sensible for her to suggest, "Let them eat cake." Just imagine that woman being forced to submit to the guillotine. It must have seemed a horrible travesty to her.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
A free and democratic America was a nice idea while it lasted, but it's done now. Stick a fork in it.
[ link to this | view in chronology ]
Re:
Seriously: if you can't build enough consensus via the democratic system to effect change, what do you think will happen if you go nuts with a gun at some public authority building or other? Have you got a plan for managing the aftermath if you should succeed?
Yeah, that's what I thought. Work within the democratic system to get enough people on side to build consensus. If they won't join you when you're all decent and law-abiding, they're not going to if you get all rowdy and violent.
[ link to this | view in chronology ]
Re: Re:
Except that the democratic system is an illusion. The people will never be allowed to have a say in truly important issues. Those in power pretend to listen to the little people and then they do whatever the hell they want, usually at the behest of those with money.
The system is rigged. It's like the chickens getting together and telling the fox that they don't want to be eaten. Even if all of them agree, it's not going to change anything.
If everyone in the country demanded that the government abolish the IRS, how likely do you think that is to happen?
Even if you could get enough people together peacefully demanding change, if those in power didn't like what they were asking for, they would label them a domestic terrorist group looking to overthrow the government.
[ link to this | view in chronology ]
Re: Re:
There were a few British loyalists who were saying pretty much the same thing back in 1776. There were a lot of Jews in the 1930s who said the same thing about the Nazis.
I've been saying for years that the Jews should've been shivving every Nazi they could find or potting them with a sniper rifle, or fighting back like the Jews in Sobibor, instead of passively marching into the showers in Auschwitz et al, but too many still believe negotiation and patience is the only course open to the civilized.
I don't have a lot of nice things to say about Zionists, but at least they learned the folly of passivism in the face of murderous predators.
[ link to this | view in chronology ]