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When a California couple sued AT&T for -- mid thirty dollar fee that was tacked on to their cell phone contract.
Little did they know the case would end up before the US Supreme Court.
The case could potentially end class action litigation in America as we know it affecting millions of consumers and workers with this now public citizen attorney -- It who argued the case before the Supreme Court on behalf of the couple -- back welcome.
I actor and are -- pouring into the issue of getting rid of class action as we know it let's go back to the facts of the case here.
I think it's interesting they say that the thirty dollar fee was hidden with it -- with it just in small difference.
No it was actually hidden that the phones were advertised as free -- you know you would get service along with free phones.
And -- AT&T didn't -- its customers is that what it was charging.
What it called sales tax on a full retail value of the phones but a consumer would have no way of knowing that.
And that ended up being thirty bucks.
Right okay are -- Apparently this case could have important implications for all consumers -- -- cell phone users.
If it were to ban class action -- how do you think that would happen and what would be the effect.
Well the questioning the case is whether companies can insert class action bands into the fine print of their contracts.
With consumers and employees and AT&T had a band like that.
In its contract in the California.
Supreme Court and courts around the country have said that those bands are unconscionable.
Which is just a fancy legal word for unfair.
Under state contract -- and the question before the Supreme Court is.
Whether federal law trumps those state law rulings and allows companies to band class actions.
You I find interesting about this is that lots of companies out there.
Forced you to go and arbitration if you have some kind of complaint you can't file class action suit you give up your -- to class action suit.
You have to go and arbitration in this is reduce costs -- financial companies brokerages that require this.
Is that a -- out.
Well actually I mean that's a big part of this question here.
The eighteenth he has an arbitration agreement and the question is whether -- can use that arbitration agreement.
To -- class actions and you you mentioned brokerage companies in the securities industry for about eighteen years they've had a system where.
You have you go to arbitration for individual disputes but if there's a class action.
The New York Stock Exchange and all the other regulatory bodies allow you to bring a class action and go to court.
I interestingly enough just this week there was a big story when the newspapers in New York here.
About how hedge finds -- investors now are actually investing.
In class action lawsuits.
They're feeding money to people who sue companies and probably god knows who else.
And and more and roll up huge amounts of debts.
And even those people get settlements sometimes the settlement isn't big enough to.
To -- the tab they have with the lender who is you know act hedge find is a private equity find somebody like that.
Are you favor that.
I think you know I think if this is a system that allows.
People to level the playing field that's a good thing I think is the New York Times story this morning points out.
It can have a really big effect and leveling the playing field allowing people to bring cases they wouldn't otherwise be able to bring I think of the movie.
A civil action or Erin Brockovich those cases are expensive.
And you need to be able to finance them on the other hand if there -- abuses.
If lawyers are telling their clients or if that the clients get stuck with interest payments that eat up their recovery and that's something that needs to be looked at.
Ultimately it's consumers were to lose the right to pile up at class action lawsuit what would it mean for them.
I think it would mean that -- -- a lot of practices that you simply wouldn't be able to address imagine.
For example a fast food company -- -- cheating it's employees out of the minimum wage or.
A company that pays women a little bit less than men across the board there's -- kinds of things.
They already heavily -- that's already illegal -- can't pay me exactly happened exactly but it doesn't take a class action lawsuit to stop it.
Well it does actually I mean that's the point these things are illegal.
But the only mechanism of enforcement for most of these practices is a class action lawsuit if you take away class actions.
Nobody is going to be able to bring those Kate claims on an individual basis it's not economically feasible wife sue for example for thirty bucks nobody does that.
I have absolutely -- people do it -- to make up a break like you -- pay any of fairway which I'm gonna bring sit simply the threat of the suit.
Can buy you a better way.
Evidently economic reality is that no sensible lawyer's going to take a thirty dollar claim it's too expensive to do the discovery necessary to figure out.
Whether there's really wrongdoing and to prosecute the suit and so you need class actions to incentivize.
People to bring those cases but I just make another point which is.
If we want to throw -- the class action -- the way we do things like that in this country is to go to the legislature.
And that's the political branches to do.
Right don't write private legislation the fine print of contracts and then get the Supreme Court to say that's okay.
Well thanks for your help today -- we appreciate it thanks so much.
Thanks for --
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