Customers can sue AT&T, after all

A federal court in San Francisco has decided that AT&T's wireless contract is "unconscionable". On Friday, the US Court of Appeals for the Ninth Circuit came out against AT&T's "arbitration clause," which forbids wireless customers from bringing class-action suits against the company. Arbitration clauses are quite common in …

[Anonymous Coward]

"unknowingly agreed"?

"But it wouldn't let him install the chip without signing a new agreement with the company, and in doing so, he unknowingly agreed to the arbitration clause."

Why didn't he know that he had agreed to arbitration? Did they send him a copy of the new contract? Did he read it before agreeing to it?

I'm in the minority in that I take time to read and understand every contract I sign.* I have, however, been bitten once by a "verbal contract" over the phone, in which I (allegedly) agreed to some contract language I never got to see — which is a yet another realm of corporate evil that needs to be explored in the courts. Wondering if that's what happened here.

(* Usually it involves me reading the text, saying to myself, "I'm getting f&#%ed in the arse," and finally signing, although occasionally there's room to bargain.)

[Morely Dotes]

Hidden clauses

In the US, it is extremely common for cell phone providers to deal with customers in a brisk fashion, and rush them through the sign-up process. Sometimes the whole transaction is telephonic, and the new cell phone is sent through the Post; the customer is asked something incomprehensible, "agrees" to it verbally, and has no idea what was just asked.

I love my country, but I fear my government, and despise the corporations which obviously own it.

[Anonymous Coward]

9th Circuit...

Although the lawyer stated, "The Ninth Circuit has been a legal trend setter in many ways, with various laws," he neglected to mention that it is the most overturned of all the circuit courts by an immense margin. This circuit is basically the "lunatic left" of the American judicial system finding itself spanked the the Supreme court more often than not... I suspect this ruling too, will find its way deep into the dustbin of history.

[SnowHawk]

I just signed one of those contracts last week for T.Mobile

I read through my T.Mobile upgrade contract before signing last week. It seemed that half the paragraphs began, "The customer waives any right to...". It mentioned a California consumer protection law in particular several times. I believe that law prevents just the sort of arbitration agreements that this contract was spelling out. I signed anyway, I wanted my KRZR K1. At least I didn't have to tattoo T.Mobile on my son.

Glad to hear about this court ruling though, even though the 9th Circuit is the most overturned of the Circuit Courts. Seems their 'liberal' interpretations are often found to be lacking a certain Constitutional validity that the Supreme Court likes. I think this one should stand however, at least it makes sense. Hopefully this will lead to a general reduction in these Arbitration Agreements.

[Scu]

Goose v Gander

Perhaps AT&T should drop their appeal and settle through arbitration, if they believe arbitration is sufficient.

[Danny]

@"unknowingly agreed"?

It is very easy to tie up a contract with 'legalese' and make them very difficult to understand without a law degree. Most corporate lawyers in America are well trained in this practice as they make fortunes from companies trying to do away with consumer rights altogether.

[Dave]

For Entertainment

I can recommend reading such contracts and crossing out/initialling the bits you don't like. I did this with a credit agreement once, where I objected to the company phoning me with an automated dialler. It caused the salesman in the shop no end of hassle and worry, he called the credit company to see if they'd still accept it (they did, interestingly enough) and was obviously worried about losing his commission.

[Anonymous Coward]

Change the law

Maybe the USA should have an "Unfair Contract Terms Act" like other, more intelligent, countries.

Contracts which seel to take away legal rights need to be declared unlawful and prohibited by law, not demolished in a piecemeal fashion.

[John Manzione]

Arbitration is the best way to solve problems

Do any of you honestly know what arbitration is? If you did you might not see this as such a bad thing. (Despite the 9th Circuit being a court full of weird, activist ex-hippies)..

With Arbitration you get to put your side of issue out there to someone who is paid to act as an honest broker. Someone with NO agenda, no need to get elected or stay elected, just an impartial judge/lawyer hired to here this case in its most simple terms. Arbitrators are the most fair minded people on the planet, and I would much rather have my case heard in arbitration than taking a chance in front of jury.

That said, IF your intent is to get rich, abuse the system, bring a "class action in name only" because of the larger settlement number, then being asked to arbitrate your "problem" is something you just don't want. There is no get-rich-quick in arbitration, but there IS a fair minded decision that will more often than not come down on the side of person wronged.

If you go out of your way in your daily life to look for that loop hole that will give you the "opportunity of a lifetime" to sue some corporation so you can get rich with a nice big settlement, then arbitration is your worst nightmare. But, if you are someone that was wronged and your ONLY interest is to be made whole again, arbitration is the best way possible.

[Chad H.]

@ John Manzione

John, your missing the point. Completely.

The issue here isnt whether arbitration is a good thing, its whether a company can FORCE you to waive your legal rights.

While I tbhinl Arbitatration can be a good thing and save both sides money, please remember that should it fail, under the law I should have the right to take legal action.

And noone, noone has the right to take that away from me.

[Lou Gosselin]

This is all too common.

Unfortunately it seems most companies with well paid lawyers seem to have arbitration clauses from credit cards and banks, to rental agencies. This is obviously because it is within the companies best interest to waive consumer's rights while protecting their own.

I agree with this verdict, it is unconscionable that a company is able to sidestep the laws designed to protect consumers from bad business practices. One may blame the individual for waiving their rights in the first place, however when this practice is the "norm" it becomes impossible to have credit cards, bank accounts, even cell phones, etc.

Essentially allowing consumers to waive their rights makes those rights pointless any time a contract is involved.

[Luther Blissett]

Never say Bush

didn't ever display leadership as far as waiver of US citizens' rights was concerned. The US corporations are just boldly going where no man has gone before.