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To Fight Class Action Limits, Lawyers To Inundate Corporations With Claims

By Nicole Flatow on November 8, 2012 at 2:20 pm

"To Fight Class Action Limits, Lawyers To Inundate Corporations With Claims"

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The U.S. Supreme Court under Chief Justice John Roberts has not looked kindly on class action lawsuits and arbitrations. In a series of decisions, the court has eroded the ability of individuals to hold large corporations accountable through the only feasible, cost-effective mechanism, and they have two more chances to continue that trend with cases argued before the high court this week. (A third case this term challenges the similar collective action mechanism).

Arguably the worst case in the line, AT&T v. Concepcion, upheld a provision in AT&T contracts that forces consumers to waive all rights to class arbitration – preventing individual consumers from challenging a fee so small that it is far outweighed by the expense of filing a challenge. In the wake of this decision, federal courts relied upon the precedent to block no less than 76 class actions, and companies such as Netflix, PayPal and Sony are adding similar class arbitration waivers to their contracts.

Now, two plaintiffs’ lawyers have developed a nonprofit crowdsourcing website that they hope will foster a work-around to the limits set in Concepcion. Reuters’ Terry Baynes explains:

Just as Groupon measures consumer enthusiasm for a deal, ConsumersCount.org gauges how many consumers are willing to file arbitration claims against an offending company, with the goal of being able to inundate businesses with such claims.

“Browse. Submit. Act. Are You Outraged? Did It Happen To You? You Build The Crowd, We’ll Make The Case,” reads ConsumersCount.org, which elicits consumer responses on a variety of situations, including Sirius XM’s use of “unwanted robocalls” and Nissan failing “to refund vets lease payments.”

Beneath each type of claim is a percentage bar, measuring the level of consumer interest. Once enough people indicate they have had the specific problem, the bar turns from red to green. That’s the cue for Friedman and Mason, or lawyers they work with, to move forward, filing masses of individual arbitrations against the company. Friedman and Mason don’t give a specific number but are hoping to be able to overwhelm a company with hundreds or even thousands of complaints.

ConsumersCount.org’s goal is to show corporations that, even if the system were fair and consumers could typically file complaints easily and free of charge, individual claims would be overly burdensome and inefficient for corporations – not to mention arbitrators and the courts. It’s hard to believe this alone will prompt corporations to change the waiver provisions in their contracts, but at the very least, it may hold a few more corporations accountable.

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