Class-Action Rights Court Ruling

A victory for consumers happened Thursday July 12th when the Washington State Supreme Court ruled 6-3 that consumers cannot sign away their class-action rights. Many times consumers sign contracts agreeing to resolve their disputes through mandatory arbitration. Most people do not realize that when they sign this type of contract they are also waving their right to file a class action law suit against the company. A consumer may come across this type of contract when signing up for such things as credit cards, wireless service, buying new cars, and for employment. According to Justice Tom Chambers, the class-action waiver denies large number of consumers the protection of Washington’s Consumer Protection Act.

In 2004, five consumers sued Cingular Wireless, now AT&T, citing improper billing for long distance calls and roaming charges. The consumers were overcharged from an average of $1 to $45 each month for calls that were supposed to be free. Instead of going after Cingular individually, they decided to band together and form a class-action law suit against the company. They filed the suit for themselves and for others who were similarly overcharged. Even though none of the five consumers were significantly overcharged, they claimed that Cingular unilaterally overcharged the public large sums of money. After filing the suit, a King County Superior Court judge denied the class-action because of the contract the consumers had previously signed with Cingular. The judge ordered the claimants into individual arbitration with the company.

Fortunately for consumers, the Washington State Supreme Court disagreed with the judge’s orders. In the court’s majority opinion, class action “is often the only meaningful type of redress for small but widespread injury,” and “claims as small as those in this case are impracticable to pursue on an individual basis even in small claims court, and particularly in arbitration.” A spokesperson for AT&T stated that the company still believes that consumers are better off pursuing arbitration rather than through class-action.

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