A class action which may cost the manufacturer 10s of millions of dollars. Yeah, you only get a small check. Yeah, the lawyers get a lot. But what other remedy does the average consumer have against this type of subtle but abusive behavior.
I just got an $80 check in the mail over a class action regarding the dishwasher (appliance) I had a few years back that broke long before what should have been it’s usable life. Roughly $1000 to replace it. $80 class action settlement.
Class actions are a crappy way of extracting the actual cost or damages done by a corporation and then getting those damages into tha hands of people that were on the shit side of the stick in the transactions.
But no, I have no grand answer for how to do it any better either.
Theoretically, people who purchased complain to their state attorney general or report the manufacturers to the FTC. There might be some recompense under consumer fraud laws. If enough people had bought them, there might be enough people to form a class action (doubtful though).
The problem is that amount of $ involved here is just not something anyone is likely to get up in arms about. It's $5. Most people will just write it off and never think about it again. No lawyer would bother either unless there were 10,000s of consumers willing to come forward and complain.
Just one of those shitty situations. Caveat emptor.
The article quotes Consumerist in giving this reason for class actions:
> companies can harm large groups of customers but get away with only paying out to those people who are willing to arbitrate.
Class action isn't just about big guy vs little guy, or corporation vs individual. It's also about discouraging practices that are illegal, and valuable in aggregate for the defendant, but too small to warrant a court case for any single plaintiff.
I would imagine not. The class action would settle, most consumers would get a trivial sum in the form of a check, and the litigating firm would get a large payout. The settlement would result in no one taking responsibility for anything.
Lawyers just bring up class action lawsuits to skim money off the payout. The individual payouts are usually so small barely anyone goes through the hassle of claiming them. The one positive is, at least it’s a small slap on the wrist for bad corporate behavior, but I doubt any company actually will change their behavior because of it.
I am not from the US, is a “class action lawsuit” supposed to be something scary? From the instances I’ve seen over the years, these lawsuits result mostly in tiny $22M fines and a slap on a wrist.
The typical class action case goes something like this:
500,000 people suffer some small injury by a big company. Say they bought a coffee maker that's supposed to filter water but the filter doesn't always work right. Call it a $10 injury. An entrepreneurial lawyer gets wind of it, and files a class action suit. After some discovery and motion practice, he decides to settle with the manufacturer for $2 for each class member ($1 mm total, with unclaimed money to go to Consumer Affairs), plus $300,000 for settlement administration, plus an injuctive promise never to do it again, plus $300,000 for the lawyers' legal fee.
The manufacturer settles because the legal fees of going to trial would probably not be much less than that and if it lost it could be looking at $5 mm in damages plus the possibility of punitive. The lawyer is happy because he made $300,000 for the equivalent of a few hundred billable hours. The class members are mostly indifferent. Even if many of them open the letter and read it (unlikely) and even if many of them think the settlement is BS, they are unlikely to write a letter to opt out for something that didn't even bother them that much. And they can't practically sue on their own anyway over $10.
This case was very different. The federal government had already forced the credit card companies to admit that they had acted in an anti-competitive manner. This lawsuit was the private follow up to that. The Sherman Antitrust Act provides for treble damages. These potential damages are in the tens or even hundreds of billions of dollars. And they aren't all distributed $10 dollars at a time. Some of the members of the class are giant retailers that individually have in the hundred million or billion dollar range. So there are a fair number of class members that are and were very well aware of what was going on in this case and weren't going to just throw out an opt out notice like most class members in most class action cases.
Like most class lawyers these guys just wanted to settle. Sure maybe they could have gotten even more after trial but $500 million in hand is worth quite a lot in the bush! What's unusual is that there was someone with the incentive and ability to litigate and point out this conflict of interest.
Sue in small claims court? I thought part of the point of class actions were to make things cheaper for defendants by only having to defend one case instead of thousands.
We have class actions, where hundreds or thousands of people can join together and sue a company- the claims for each consumer might be small, but put together they can add up to a substantial value.
We could do with the inverse, too. One person could sue for small-ish claims hundreds of harassers. You called me a rapist on social media together with a mob of idiots? Good, that's libel for you and for the other thousand who did. It's going to cost you 10 grands and a reprimand- not enough for a single court case maybe, but put them together and they can be worth it :)
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