Consumers can usually sue corporations at a court in their own jurisdiction. Many European countries also allow class action law suits. Yet, we have few law suits against corporations. There are other reasons for this:
- consumers are not awarded punitive damages,
- court fees are higher (usually a percentage of what you ask for),
- if the consumers lose they pay not only their own lawyer, but (to an extent decided by the court) also the lawyer representing the corporation,
- many European countries have consumer "watchdogs" / ombudsmen, i.e. public entities that have the authority to start cases against corporations,
- many European countries have a variety of consumer complaint boards that handle small claims efficiently and at low cost.
Few who know consumer matters in both the US and the EU would trade the European system for the American.
The US also has Qui Tam lawsuits, meaning on behalf of the king, one of the more well known versions are whistleblower cases. Though the whistleblower only receives a rather small percent (10% is common, but varies), these lawsuits are some of the largest judgments in history, in particular as related to illegal kickbacks in the healthcare and pharmaceutical industries. The common facts are the business is engaging in illegal activities, the worker raises the issue to the employer and then as you might expect the employer instead of addressing the illegal activity instead retaliates against the employee (loss of hours, loss of wages, outright firings, etc...).
Here's a list of some of the largest, $16.5B by Bank of America; $3B GlaxoSmithKline (illegal kickback); $2.2B Johnson&johnson (illegal kickback); pfizer $2.3B (illegal claims); Merck (illegal kickbacks); HCA has 2 of the top 10 totaling near $1.5B (illegal billing, up coding; illegal kickbacks); and on and on it goes
I live in Florida, so I am all to familiar with the Lex Luther looking SOB. But it's fitting for a state that prescribes 10x more oxycodone pills than all other states combined and whose largest industry is Medicare fraud.
For some context if anyone is curious: to my incredible surprise, the claims in this comment are not obviously made in exaggeration. In particular, many news articles quote the "10 times" claim, eg http://www.npr.org/2011/03/02/134143813/the-oxy-express-flor... -- perhaps originating in a claim made by US Attorney Wifredo A. Ferrer: "According to recent estimates, Florida prescribes ten times more oxycodone pills than all other states combined." https://www.justice.gov/archive/usao/fls/PressReleases/2011/...
The claim however does not seem to be true, even in 2010 before Florida took a variety of opioid-related actions. For example, California has approximately twice the population of Florida, but probably no(t much) less than half the oxycodone prescription rate. It was hard to find specific numbers, but for example it appears that at its worst (in 2010) some people claim Florida prescribed 650 million pills per year; at the same time, Pennsylvania definitely prescribed over 200 million pills per year. (Pennsylvania has approximately half the population of Florida.)
The closest approximation to the claim that I can find that might have been true is "in 2010, Florida prescribed ten times fewer oxycodone pills than all other states combined". If the factor of ten is exact, then this would still imply that Florida's prescription rate is higher than the other states, as Florida has less than one-tenth of the population of the other states. In any case, it appears that Florida's prescription rate is now around or below the national average.
The idea of government injury is often invisible. Here is a specific example, and likely 3 of the 6 examples I listed have above are similar factually (anti-kickback):
1. Russians began opening pharmacies in Russian neighborhoods throughout the UD (yes, Russian neighborhoods are a thing);
2. The pharmacies would deliver drugs to the medicare patients and in those deliveries included certain gifts anything from Russian newspapers, magazines, to sometimes Russian caviar;
3. As they do CVS identified the success and bought the network of pharmacies;
4. After the sale a lawsuit was brought, because a pharmacist at just one of these pharmacies mentioned that these additions to the drug deliveries violated anti-kickback laws and as a result the pharmacy took retaliatory action (I believe day shift to night shift and reduced hours)
The US government would never have known if it weren't for the pharmacist, and it's the exact behavior prohibited by the Anti-kickback Statute, but I'd challenge you to articulate the injury to the government (in fairness I know you could, but I think you see the strong counter arguments).
Of course the intent of these laws are to protect Medicare, but you didn't articulate how Medicare was harmed in my real life example.
Whether or not the Pharmacy put extra gifts in with the Rx delivery Medicare was not effected. Moreover, the gift has no bearing on Medicare, patients, physicians or reimbursements.
To highlight the distinction, say a Dr. prescribed a drug to be filled at the pharmacy, and the patient never actually got it filled, but the pharmacy filed the claim for the Rx with Medicare anyway to get paid for the drug as if the patient had gotten it filled, the harm to the Government is obvious, they just paid a claim for a drug that was never actually dispensed. In fact, when that actually happens, the pharmacy usually double dips, and rips the label off the unfilled drug, sells it to another patient and still gets paid on the claim as if the original Medicare patient picked it up. Anyway sometimes the harm is obvious and sometimes its invisible, but it all illegal.
Sometimes this works for me if I end up in consumer hell. Be short, professional, to the point, and give all factual evidence. Make it easy for them to work with you, and you will get a response. Also the Office Of The Controller of Currency always responds to my overdraft charges from Wells Fargo. I make sure that it is extremely expensive to screw me over.
Whose fines, in the rare instance they're actually fining companies, never come close to the profits reaped by the activities that broke the regulations in the first place. For reference: The judgement against the banks after the 2008 mortgage crisis, the fines levied against Wells after the debacle with phony accounts, pretty much any case involving a collections agency, etc.
When the profits are in the billions, even a fine of 600 million is a paltry line item. You either should fine in an amount relative to the amount made by the illicit activity, or even better, go after the executives behind it directly with said fines or prison. As long as these slimeballs can conduct illegal activity and sail away after "resigning in disgrace" with an 80 million golden parachute, while the company pockets several hundred million, they will continue to do so as has been evident so far for anyone paying attention.
I've never quite understood how this works, I'm trying to imagine a burglar being asked to give back "some" of what he stole, but not everything, that would be "unfair". Fight fire with fire in many cases, start fining them the years profit, or maybe, just maybe, start treating corporates like the criminals they are.
Because when you're worth several million dollars, the justice system will go to great lengths to pretend your crime wasn't actually a crime. And yeah, this thought is uncomfortable, but I challenge anyone who reads it to prove it wrong.
The EU system seems to be very anti-consumer. Or is that what your summary statement is intended to elicit? (tough to tell, as it could mean either/or is the better system)
No, it's anti lawyer. Consumers are doing fine. Consumer watchdogs have actual teeth and when companies are found to have misbehaved the penalties can be quite severe.
The difference is that consumers don't usually get rich from suing companies, we don't have a 'legal lottery' for every little thing that spoils your day and that you feel grieved about. That higher barrier keeps the courts free for stuff that is important and at the same time makes sure that we don't end up with a climate where everybody is suing everybody else all the time.
Consumer satisfaction indices are published with some regularity, the United States is usually somewhere between the 20th and the 30th position of such rankings.
Now obviously the United States is huge and there is huge diversity between the various demographics and localities but it is beyond dispute that consumers in Europe are doing fine (and that consumers in the United States are not doing much worse on average).
It would be strange to find anything different, taking into account that we're talking about the wealthiest segment of the world.
> Consumer satisfaction indices are published with some regularity, the United States is usually somewhere between the 20th and the 30th position of such rankings.
Thanks for the data point. I'll point out that consumer satisfaction depends on many things in addition to what we are talking about in this thread.
Eurostat ? ("Eurostat is the statistical office of the European Union situated in Luxembourg. Its mission is to provide high quality statistics for Europe").
They have stats for anything and everything, most renewed annually, in all 3 working language, in complete free access, and provide aggregate for EU17 and EU28.
The EU as a whole is arguably much more diverse than the US as a whole, though. The 'oh the US is most diverse evar!' narrative is just American exceptionalism IMO.
I'll give you two little samples of what my impression is based on (besides the thousands of articles read and stories of fellow business people operating in the American market):
- when I was in New York I got hit from behind by a guy in a car doing maybe 5 mph. He got out of his car right away, ran over and started pleading with me not to sue him before he thought of asking me how I was. When I told him I'm European and he doesn't have to worry his relief was extreme.
- A customer of ww.com had viewed a scene that he considered 'shocking' (a gay couple walking around nude in their house) and that he would sue for emotional distress because of this. When he found out we were located in Canada he promptly forgot about it.
The first one sounds like an uninsured (maybe unlicensed) driver. This is definitely not the norm. Car accidents are one area where we pretty much don't have to worry about lawsuits at all. Your insurance company talks to their insurance company and they work it out.
The second one just sounds like a crazy person. They probably had no intent to sue, and were just trying to stupidly use the threat as leverage for something.
WW.com has had a number of such threats of lawsuits for all kinds of reasons, exclusively these were by Americans and they were all looking to get money out of us.
In business circles this is simply seen as a cost of doing business in the USA, if you are large enough to be visible you will get sued.
I don't understand what that google link is supposed to demonstrate. Is there something in the results showing that people's insurance doesn't protect them?
I don't know what people being insured or not has to do with the fact that people will sue for whiplash claims (even when they don't actually have whiplash) in order to extract some $ from the system, enriching a bunch of lawyers in the process.
For all you know the guy was illegally in the United States, it still doesn't matter.
In Europe the most likely response to such a minimal accident would be two parties getting out of their car, assessing the damage - if any - filling out a form and getting on with their day after taking some pictures and shaking hands.
Nobody would even think of being sued, misfortune in Europe rarely leads to some kind of civil lawsuit here (though, if you're drunk or under the influence of drugs or negligent it is of course very well possible there will be a criminal case brought against you).
> In Europe the most likely response to such a minimal accident would be two parties getting out of their car, assessing the damage - if any - filling out a form and getting on with their day after taking some pictures and shaking hands.
I've been in 3 (minor) accidents in the U.S., and they've all basically ended that way.
- I rear-ended a pickup truck. He had his back gate down, and didn't suffer any damage. He shrugged and drove off.
- A private security patrol car rear-ended me. We took pictures of each other's license and insurance. I filed a claim with my insurance, and their insurance paid the claim.
- A semi/lorry made an illegal turn and hit me. The driver wasn't afraid of a lawsuit, but that he'd lose points on his driver's license and have it revoked. We traded license+insurance information and left.
25 years ago, my mother was in 2 major accidents within a month (neither were her fault). She still suffers from those injuries, but she never filed suit.
I'd have to say that "the most likely response" in the U.S. is probably similar to that in Europe, but the best case is no better in the US, and the worst case is much worse.
> I don't know what people being insured or not has to do with the fact that people will sue for whiplash claims (even when they don't actually have whiplash) in order to extract some $ from the system, enriching a bunch of lawyers in the process.
From the very top of your Google link:
> There is no guarantee that the person who caused the accident will even have insurance. You may have to file a personal injury lawsuit to facilitate collection of your damages.
You sue when the other person is uninsured. That's why insurance matters. Insurance is legally required to drive in most states (New York is one of them).
It's just a scam in general. If you have insurance, they go after your insurance for as much as they can. Also a claim to sue isn't actually suing. Nobody sued you, they just claimed they would twice. The threat is very common, but it actually happening is not. It's all very overblown, like the McDonald's coffee incident.
> In Europe the most likely response to such a minimal accident would be two parties getting out of their car, assessing the damage - if any - filling out a form and getting on with their day after taking some pictures and shaking hands.
Is there no form of insurance at all in Europe? You just take the damage to your car and deal with it? What if you're too badly injured to get out of the car and shake hands?
> You sue when the other person is uninsured. That's why insurance matters. Insurance is legally required to drive in most states (New York is one of them).
Well, or you don't. See, that was the point. Being insured or not is not relevant, it is relevant for the other party but seeing an accident as an avenue to a payday is a fairly uniquely American thing. So whether you claim from the other party or from the insurance company is immaterial, the point is the claim, not the way in which the claim is eventually settled.
> Is there no form of insurance at all in Europe?
Insurance is mandatory, hence the 'filling out a form'.
No. You do. Otherwise you're not reporting the accident and eating the repair bills yourself. Unless you live in a no-fault state, in which case your insurance only ever applies to yourself and damages from other drivers to you are covered by your own insurance.
Otherwise, whomever is at fault (and their insurance by proxy) are responsible for damages caused to the other driver and their vehicle.
You can choose to not press charges, but that only means you're going to pay for the full repair bill out of pocket.
You also can't take money that doesn't exist. So someone without insurance likely doesn't have a huge savings to pull from. Which is why underinsured and uninsured motorist coverage is available.
> Insurance is mandatory, hence the 'filling out a form'.
Insurance is mandatory in the states too. But that doesn't mean people never drive uninsured, I'm sure it's the same in the EU. What happens if an uninsured driver hits you? You pay the bill entirely out of your own pocket with no repercussions for the uninsured?
Again, from one of the top results of your Google search earlier
> There is no guarantee that an insurance adjuster will pay out on your claim. There is no guarantee that the person who caused the accident will even have insurance. You may have to file a personal injury lawsuit to facilitate collection of your damages.
> In no-fault states, pursuing a lawsuit for a whiplash injury can be difficult due to threshold injury and damage requirements. In states not governed by no-fault law, you may be able to file a lawsuit as a matter of right. Should
> Insurance is mandatory in the states too. But that doesn't mean people never drive uninsured, I'm sure it's the same in the EU. What happens if an uninsured driver hits you? You pay the bill entirely out of your own pocket with no repercussions for the uninsured?
It depends on the level of insurance you have. If you have "third-party" insurance (the legal minimum), then that doesn't cover any of your costs. Comprehensive insurance is more common which will cover all your costs (excluding an excess), however the insurance company will treat it as a "at fault" claim for you and you may lose any no claims bonus you have. The person who caused the accident will then generally get prosecuted for driving without insurance.
> Insurance is mandatory, hence the 'filling out a form'.
What's the result if the other driver is driving without insurance, despite it being mandatory? Or if they don't carry enough insurance to cover the costs of the accident (or is this not a problem)?
There are a total of 3 states that don't require insurance, and there are another 2 that have laughably low minimum coverage requirements. It's still relatively common for people to drive illegally (e.g. borrowing a family member's car).
Well, if you have uninsured driver coverage, you just let your insurance handle both your compensation and collection from the uninsured driver to make themselves whole (including lawsuit, if necessary and likely to be cost effective.)
> In Europe the most likely response to such a minimal accident would be two parties getting out of their car, assessing the damage - if any - filling out a form and getting on with their day after taking some pictures and shaking hands.
We actually have enough of a disincentive here to not report accidents to insurance companies because of its effect on long term rates, that this tends to be the outcome of most (anecdotally) auto accidents. I've been in 4 accidents in my lifetime, half my fault, and they've been completely out of the system. Most people have bigger fish to fry like exorbitant healthcare costs, or a racist president.
> We actually have enough of a disincentive here to not report accidents to insurance companies because of its effect on long term rates,
The UK had to regulate this because insurance companies were pushing Uberrimae fidei a bit too much. If you've had an accident and not reported it too them you're not acting in utmost good faith. They were using previous undeclared accidents as a reason to avoid paying out for later accidents.
> In Europe the most likely response to such a minimal accident would be two parties getting out of their car, assessing the damage - if any - filling out a form and getting on with their day after taking some pictures and shaking hands.
Also in the US. Even when whiplash and compensation for it becomes involved. Like, by far the vast majority of minor accidents go this way.
> Nobody would even think of being sued, misfortune in Europe rarely leads to some kind of civil lawsuit here
It only very rarely leads to civil lawsuits in the US, too.
Being insured is why the most likely response to such a minimal accident in the US is exactly how you describe it in Europe. You don't jump out of your car saying "omg please don't sue me!" You document the damage, exchange info, call the police if necessary (often legally required), and contact your insurance company. They handle the rest.
If I rear-ended somebody and later found out they were suing for whiplash, I'd pass the info along to my insurance company and let them worry about it.
The point is - at the risk of becoming boring and repeating myself - that this has nothing to do with being insured or not but with such a suit or claim being brought in the first place. That's an absolute rarity in Europe and a case would have to be pretty severe to get any compensation.
In the United States there are plenty of people who see wrong or harm (imaginary or real) done to them as a potential payday, whether through the courts or through an insurance company is immaterial.
And my point is that a person who reacts to a minor crash by begging you not to sue him is not even remotely representative of how things work here. You described "the most likely response" in Europe, as if it was somehow different in the US. It's not.
So, are you or are you not in agreement that monetary compensation after accidents (or crimes) is more likely to occur in the United States than in Europe regardless of the mechanism of getting such compensation (through the courts or through an insurance company)?
There are approximately 500K personal injury cases annually in the United States, roughly 50% of those are related to motor vehicle accidents. The vast majority of those (90%+) are settled out of court.
Whether the man was a weirdo or not is a thing I have no knowledge about (and why you would have knowledge about it is a mystery to me) but it seems that he didn't exactly pull his fear out of thin air.
All I need to know to conclude that the guy was an outlier is the story you told and a basic understanding of how things work in the US after a car accident. That is super far from the norm. The way you describe things in Europe is exactly how it happens here nearly every time.
There are lots of crazy people, and gaming the courts is way many of them make a living, or garner attention, or just give themselves something to do when they are otherwise put together. I've been 3rd party to multiple frivolous suits in california. It's shocking to see the amount of work put into lost causes, but people still show up and fight speeding tickets too...so that's just the USA.
I suspect one of the key differences that enables this is that in the United States lawyers can take cases on a contingency basis.
There are other (some European countries too) places where this is possible but in the United States it seems to be much more common, especially in such cases where outcome is a long shot but the pay-off is large.
If you know for sure that you will lose money (and possibly a substantial amount) for bringing a frivolous lawsuit that works as a deterrent. Of course it isn't perfect and may result in some cases that do have merit also not being brought.
The impression is not limited to non-Americans. Filing law suits is tedious and expensive. The common defendants (big companies) like to give the impression that frivolous lawsuits are common because it makes people feel bad about filing them.
That said, of course there are some frivolous lawsuits. There are also many with merit, and it's hard to tell which is which a priori.
You shouldn't be down voted for this even though you are wrong.
The EU system is very pro-consumer and is doing a lot of things to make life easier for consumers ditching roaming is just one of them. With regards to lawsuits the EU system takes the need out of much of that by having fairly strict rules for corporations and giving consumers much more legal backing when it comes to the return of goods, protection from harmful chemicals in food etc.
It's just a different way to look at it than the US.
In academic US legal theory, litigation is frequently portrayed as an efficient substitute for regulation, particularly from a libertarian perspective. Our political narratives also tend to reject regulation as government overreach or unconstitutional when carried out at the federal level. So we ended up with a highly litigious system, which (unsurprisingly) resulted in high litigation costs. Corporations have responded (also unsurprisingly) by trying to reduce their litigation costs. Our childishly uninformed political discourse has prevented the libertarian/conservative elements of American society from having to confront this contradiction. It's idiotic. If litigation was efficient it would be cheap. Or at least as cheap as it can be and cheaper than the alternative. It's pretty clear that that isn't true.
Yes, to academic idea that efficient litigation can be a substitute for regulation. That gets to the main issue in the linked article, which is that consumer financial contracts often require consumer to use arbitration and prohibit them from joining class actions. The issue isn't that consumers can't sue. It's that suing (or arbitrating) individual cases is inefficient. Claims never get brought because no sane person is going to waste their time going through an individual arbitration to recover a $10 or $20 claim.
It's hard to imagine any legal system where a claim to recover a $10 or $20 injury in an individual lawsuit (or arbitration) could be efficient. Such claims could be aggregated in class actions, if consumer contract terms didn't prohibit it. Class action lawyers often think of themselves as doing "social engineering"; forcing companies to pay for injuries they cause in situations where nobody is likely to bring an individual suit at all (e.g., small harms).
Class actions don't normally result in much of a recovery at all for individual consumers, both because amounts for each individual are typically quite small, and because costs of litigation and attorney fees eat up huge percentage of claims defendant corporations are forced to pay. But at least if there were threat of class actions it could scare corporations into not violating terms of consumer agreements. So even if class action suits do end up mostly enriching lawyers, they still help consumers by giving corporations a strong incentive to honor consumer agreements. Class action lawyers as "social engineers".
I believe litigation in the United States is based on the idea that access to the courts to redress grievances (against private individuals or public institutions) is fundamental for a civil society. This goes as far as preventing habeas corpus from being suspended in Illinois during the American Civil War as the courts were still in operation, and the "justification" for holding people in Guantanamo. While I have heard the vague generalities of "overreach" and "unconstitutionality" levied against regulation by some opponents, the more nuanced economic argument is that regulation creates barriers to entry, slowness to adapt, and governmental bloat (i.e., bureaucracy which can only be reined in by more bureaucracy). The market solutions to regulation are more properly insurance (by producers) to cover claims and tort constraints. Snowflake society doesn't like calculating the economic (market) value of risk to life or limb, but the truth is that without reasonable tort the economic impact will still be born, but socialized by non-risk takers subsidizing expanding bureaucracies.
Funny how litigation in the United States being based on the idea that access to the courts to redress grievances being fundamental for a civil society then causes that very same society to go out of its way to deny those rights to others.
Fairly incredible actually if you think about it for a while.
Not sure what the subject of that sentence was; it appears to be passive (and actorless) in the first part but the dependent clause (after "then") seems active voice.
What or whom is causing society to go out of its way...? Litigation?
> Snowflake society doesn't like calculating the economic (market) value of risk to life or limb, but the truth is that without reasonable tort the economic impact will still be born, but socialized by non-risk takers subsidizing expanding bureaucracies.
Sounds like you should move to Somalia, land of the free market -- it's quite untouched and unregulated by nanny bureaucracies, in fact. Lots of opportunities to make money, I'm sure. Or perhaps you'll be lucky enough to break both your kneecaps and die on the streets, or get sold into slavery!
I can only imagine the reason you wouldn't do this is due to being a needy snowflake yourself. Hmmm....
I suspect that the thinking is that it's efficient in the sense that you don't have the wrong regulation.
ie. in the sense that wrong regulation is extremely expensive.
And if people was always employing an optimal strategy, then litigation would rarely be needed as the outcome would be predictable. But I guess people aren't optimal :)
> it's efficient in the sense that you don't have the wrong regulation. ie. in the sense that wrong regulation is extremely expensive.
How efficient is it to regulate the behavior on a case-by-case basis, taking years and often millions of dollars for each case, and with all the unpredictable outcomes of a lawsuit? Maybe one ruling by an expert regulator rather than many by inexpert judges and juries isn't such a bad idea after all.
It sounds like a rationalization for deregulation.
> if people was always employing an optimal strategy, then litigation would rarely be needed
If people did that, we wouldn't need government at all. We could live in happy anarchy with all our well-meaning, honest, optimizing neighbors!
And you are more competitive if you have fewer costs that have to be passed on to the consumers. Just because they can pass it on doesn't mean they don't try to reduce it.
> No, they simply pass those costs on to the consumers.
I believe this is a false narrative spread by those who want to reduce consumer access to courts.
Businesses don't price their goods at (cost + profit). They price them at the level that will maximize profit. Sometimes that's at a loss, sometimes that's around break even, sometimes it provides a healthy profit, and sometimes they make extraordinary profits (what do you think the cost is for that $4 soda at the movie theater?).
But the price is already set to maximize profits. If the seller's costs increase, raising the price won't increase profit or help them at all - it would merely reduce revenue due to the negative impact on sales volume. And if their costs go down, they of course don't lower the price, they take more profit.
> I believe this is a false narrative spread by those who want to reduce consumer access to courts.
You are free to believe whatever you want but that's a quote straight from a conversation with the CEO of a very large manufacturer of consumer goods, who - in my experience - tended not to speak stuff that wasn't true.
Where it's inelastic then a profit-maximizing business would already have priced their goods accordingly, and there would be no room to raise prices. Most businesses won't just leave money on the table.
There are exceptions and complexity, of course. In health care, raising the price of a good with inelastic demand such as, say, Epipens, might attract social and political penalties. On the other hand, pricing such goods (e.g., pills that cure terminal diseases) at very high levels to begin with is an accepted practice.
Most consumer-goods markets have relatively elastic demand and high levels of competition. Companies have little ability to "pass on costs" in such markets.
It isn't cheap, because (surprise) lawyers write laws to prevent efficiency from creeping in.
Law should be as efficient and precise and cheap and scalable as code. Hell, that's why they use the term "codified" when they talk about laws on the books.
How do you deal with a negative externality, such as a factory dumping pollutants into the water? Liberals would say: strictly regulate the factory so it limits pollution to an acceptable level. (Statist) libertarians would say that pollution is an infringement of peoples' property rights, and that property owners should sue the polluter. Conservatives tend to reject both approaches as an impingement on business freedoms.
Why do you say "Conservatives tend to reject both approaches as an impingement on business freedoms."? I really do want to know what you are basing your beliefs about Conservatives on.
I, and the circles I've been in, would not necessarily do that. We would reject regulations that are too strict (which, lately, most environmental regulations have been). We would also reject the Federal Government being involved, since it would be a violation of the 10th Amendment in cases that don't cross the state lines. When they do cross the state lines, we'd still prefer it be left to the states, and the Federal government should keep their nose out of it unless the states just can't deal with it. As for State and Local governments, we would accept them implementing regulations when the factory and local residents are unable to come to an agreement on their own.
Note, I'm a US citizen, so I'm referring to that Government. :)
Well this is pretty much exactly what I meant when I said our political discourse is "childishly uninformed." You claim that environmental remedies should be worked out between factories and local residents. Disregarding the absurd implication that factories are the only or even the most important polluters, the only mechanism by which local residents can directly negotiate enforceable restrictions on factories is litigation. So you have unknowingly parroted the talking point you claim conservatives don't believe. You've just swallowed the misleading political messaging whole without realizing what it was euphemistically disguising.
Failing direct negotiation you say states and localities should enact regulations where state boundaries aren't crossed. Essentially no environmental regulations deal with things that do not cross state boundaries. Water and air don't respect lines on a map. Nor do ecosystems.
Worse yet, that isn't even really your position. You say "most" environmental regulations are too strict. So you actually don't think states and localities should regulate the environment. You think we should remove federal regulations and states should not replace them. So really you are parroting the exact positions we have described above without recognizing their true import.
Interesting response with lots of "You <x>..." in there. I'm also a conservative minded person (leaning more libertarian) and thought I would add a response.
First off, the conservative/libertarian discourse is not "childish" or "uninformed." Libertarian thought has been in development for centuries beginning with classical liberalism. [https://en.wikipedia.org/wiki/Libertarianism#History]
Second, the commentor clearly indicated that states and localities can be involved in regulation but only when local discourse fails. The commentor only stated that "most" environmental regulations are too strict, but that doesn't mean we should not have sane ones driven by local (not nationwide cultural ebb and flow demands of the day)!
Third, apparently you are not very familiar with environmental regulation. Environmental regulations need not cross state boundaries (we can regulate water and air from entities in in our own states). Unfortunately, we do not have that capability to balance the locality's needs and the environment's. The current system leaves little if any recourse for citizens or small businesses against government. Who do we go against? Oh yes, the EPA which is nearly or more difficult to reason with than a court system.
>First off, the conservative/libertarian discourse is not "childish" or "uninformed." Libertarian thought has been in development for centuries beginning with classical liberalism.
The length of time that a school of philosophy has been around does not relate whatsoever to how people talk about it today. See, e.g., flat earthers.
>Third, apparently you are not very familiar with environmental regulation.
I used to practice environmental law.
> Environmental regulations need not cross state boundaries (we can regulate water and air from entities in in our own states).
That would make sense if the air and the water themselves did not cross state boundaries. Turns out they do. Speaking of the classical liberalism you are so fond of, you should really check out this crazy new theory called "the tragedy of the commons."
This is a childishly uninformed discussion because you do not (and I am sure cannot without googling) refer to any specific regulations. Would you care to discuss the Clean Water Act and how you think it is too strict? Do you take issue with the "surface water connection" jurisdictional test for defining the navigable waters of the United States and thus the geographic limits of the CWA? Do you think the National Pollutant Discharge Elimination System defines "impaired waters" too broadly? Are NPDES Total Daily Maximum Loads set unreasonably low? Do you think joint Army Corps of Engineers and EPA jurisdiction over impaired waters leads to excessive enforcement bureaucracy? These are not things I just googled but rather regulations I have helped draft, administer, enforce, and even challenge. I am happy to debate the finer points and would be thrilled to see that debate on a national level.
But the debate on the national level is instead childishly uninformed because conservatives argue in nebulous generalities, using catch phrases and talking points, but do not engage with the specifics of the policies in question. The vagueness of their claims allows them to avoid rigorous standards of proof or argumentation.
Statements like "Unfortunately, we do not have that capability to balance the locality's needs and the environment's." This is simply a nonsense talking point, which wholly disregards the non-local nature of the environment. Localities don't get to choose to prioritize their needs over the environment's because they share their environment with other localities. So those localities get together and decide as a group how to regulate the environment via this fancy new invention called the federal government.
What precisely do you even mean? The ability for localities to decide they want more pollutants discharged into the environment? What needs are not being respected? Their need to have lower costs for businesses in order to keep jobs? Which they can only have at the expense of their neighbors, by emitting pollutants into the environment which then flow into their neighbors' jurisdictions and by taking jobs from neighbors who choose not to poison their own and others' land, water, and air?
It's also nonsense because it's factually untrue in many cases. Take NPDES. States enforce it, with the exception of four direct implementation states that have elected to allow the federal EPA to enforce it. The federal EPA simply sets standards and partially funds enforcement via block grants.
Worst of all, your argument does not contribute anything useful to the discussion. "There's too much federal regulation of the environment and more needs to be done at the local level." Ok, fine, let's unpack that statement and see where the argument takes us and why it is so damaging to our national discourse. What federal regulations are excessive and need to be moved to the local level? Your answer will likely be the result of something you recently googled, but let's assume you make a legitimate, well-informed point and identify one federal regulation that should be moved to the local level. I will then point out another ten regulations that clearly need to remain at the federal level. Assuming we then go through every federal regulation on the environment and make this assessment, we are left with a list of some regulations that need to be changed and some that don't. Great. So we then reform the EPA and localities start regulating more efficiently etc. etc. That would be a really awesome result of a national political debate.
This has not happened nationally because we are not having a discussion with that specificity. Conservatives simply argue that the EPA is bad and has to go. Even if they admit in argument that theoretically some regulations should be federal, the practical manifestation of their ideology is a concerted effort to abolish the EPA. See, e.g., Scott Pruitt's current activities.
And that's the real problem with your vague talking points. They drive poisonous, poorly thought out policy-making which does not even reflect your own stated positions. This is why we have Trump, the master of spewing vague generalities. A man wholly unprepared to be president, who is incapable of engaging with policy details on even the most superficial levels, resulting in absurdly awful legislative proposals and a complete absence of legislative progress.
Please, point to specific regulations or policies that you think unreasonably burden localities. That would be a productive contribution to the national debate about environmental regulation. Perhaps the regulation needs to be revised, or perhaps there is a justification you are not considering. Either way, the conversation is worth having. Regurgitating talking points doesn't.
I will add to your thorough rebuttal the fact that all of this manifests in very concrete ways. I live on a river that flows into the Chesapeake Bay. TDMLs are not some abstract concept--they directly affect the muddiness of the river my family swims in. TDMLs go up and that saves the surrounding farms a lot of money on land management. But I'm directly and negatively affected by way of a muddier river, and receive no compensation for that. That is the negative externality both liberals and libertarians recognized needs to be eliminated.
Nor is it an issue that can be addressed at a state level. The Chesapeake Bay watershed encompasses New York, Pennsylvania, Maryland, Delaware, Virginia, and West Virginia. Water flows to the ocean. The mining industry in West Virginia and the farming industry in Pennsylvania dump pollutants into waterways that affect the tourism industry on the Eastern Shore. The former have every incentive to maximize the externalities they can dump on the latter; the latter has no ability to control how much pollutants are dumped into waterways by the former.
I was being specific to the example situation you presented. You specifically mentioned factories, so that's what I used in my answer.
Litigation is not the only option. A group of people can get together and go talk to the owners of the factory directly. No need for lawyers at all. Just individuals working together to come to an agreement.
It's only when that fails that Government should get involved. Either by passing a local law that enacts proper regulation, or via litigation if that's the best option. I seriously doubt there's a one size fits all solution...
I did address issues that cross state borders. Again, I only used the environment related example because you did so first.
I disagree. It is true that it is harder for EU consumers to sue a corporation, but in general I feel that consumer rights are generally stronger in the EU than in North America (OP's point about consumer watchdogs), so there is less reason for an EU consumer to sue a corporation.
IANAL, but I'd say the EU system is anti-litigious, not anti-consumer.
> I feel that consumer rights are generally stronger in the EU than in North America
I agree with this, I feel the same. However, it seems to me, that if there is a customer related problem already in place, US will find it and react to it faster. To put an example here, all of the major automotive recalls of the last few years were exposed in the US, while Europe reacted to them with a delay (Volkswagen diesels, Takata airbag, Toyota accelerator pedal).
The VW scandal is a bad example. They broke the law, but consumers only lost value in their cars indirectly (and there were some health effects).
Given how extreme the American reaction to the VW scandal was I do wonder what the response would have been if that company had been GM, Ford or Chrysler. A part of me is really happy that the US brought this to light and made VW pay for their transgression, a part of me feels that the asymmetry between the damage VW has done to Americans and the damage that America has done to other countries is so extreme that it feels as though this is simply a cheap trick to extract some $ from VW and to harm their brand relative to US brands.
Even so, stupid on the part of VW and it should have never happened.
> Given how extreme the American reaction to the VW scandal was I do wonder what the response would have been if that company had been GM, Ford or Chrysler
There were recalls related to GM (GM ignition switch recall - 30M cars worldwide) or Chrysler (just recently [1]) too. ..you are right, these are more dangerous things like cheating the emissions. However, I believe they are not showing favor toward US companies. There are recalls of Fiat-Chrysler cars too because of cheating on emissions [2]. However, they are not affecting millions of cars as in VW case.
VW scandal wasn't so bad because all consumers knew the mileage numbers was unrealistic.
People know VW was promsing something they couldn't hold.
That certainly doesn't make it right. But it is a mitigating factor. That said, I'm super happy it got exposed so that mileage numbers might actually have meaning in the future.
It's very consumer friendly, but generally speaking it's also not that bad for corporations since they don't have to fear frivolous lawsuits in Europe.
European consumer law is full of mandatory rules (rules that you cannot derogate from in contracts or in your terms of service). Half of the clauses in your standard American terms would be tossed out by a European court.
European consumer law is far from perfect but I wouldn't trade it for the US system (and I represent corporations).
The EU system doesn't encourage consumers to sue corporations. But as the last two points show, it offers a much easier and cheaper way for consumers to get what they want from corporations, without going through the hassle of a lawsuit.
Consumers should be able to sue corporations if they really need to, which is what the article is about. But it's even better if they don't need to sue in the first place.
Class actions can be effective where the class members are relatively large, sophisticated entities. E.g. the data-breach class action brought by banks that is mentioned in the article. But in the consumer-protection space, we should consider alternatives. Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up serving neither to compensate consumers nor really to deter illegal conduct.
Notably, in the EU, the tendency is to have more "ask for permission before doing something" regulation, and less "ask for forgiveness after doing something wrong" litigation. E.g. unlike in the U.S., there are laws setting forth detailed safety requirements for consumer products, and agencies responsible for enforcing those requirements. I suspect that approach yields the desired level of product safety at lower cost than the American approach. Similar approaches could, of course, be applied to consumer financial products.
>Where the class members are individual consumers, litigation ends up being lawyer-driven. Cases settle for pennies on the dollar of potential damages, and end up serving neither to compensate consumers nor really to deter illegal conduct.
You're completely misunderstanding the purpose of class actions, and are using an oft-repeated error. The article itself explains the value of class actions.
Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them.
This is the source of the fallacy you commit: the idea that this involves large compensation for consumers. Consumers ARE compensated in class actions, it's just that their individual harm is small so their individual payout is small.
So if, say, Comcast has been secretly overcharging customers $10/month, it's not a big enough problem for any one of them to sue. But as a class of millions of Comcast consumers, it may be worth it, and can have a real punch at that level.
This is the other part of your error: of course class actions are "lawyer-driven" because, again, the harm to any individual is small. It's the lawyers and firms pursuing the class action that are doing the work and organizing the action, often on contingency. Related to your first mistake, you and many others see the lawyers getting a big payment as "stealing" from the class when they are being compensated for the work they did and winning restitution for harms that no individual consumer would pursue, and the class members STILL get fairly compensated for the small harm done to them.
Finally, and perhaps the largest part of your error, this does and, in the US, is really the only way to, deter illegal conduct because, again, this illegal conduct is premised on the idea that it's too small for any person to care or find it worthwhile to fight. By organizing a class action you enable consumers to hit back and stop this kind of behavior, and put companies on notice that they can't try these underhanded tactics without risk.
I agree that a regulation model would be preferable to this kind of litigation, but until we have regulation we must use the litigation tools we have available.
Be very wary of screeds against class actions, they're almost certainly corporate propaganda.
You missed the most critical points of the parent though. To use your example, Comcast has been overcharging by $10/month for years.
A just resolution would be for each customer to get $120/year they were with Comcast PLUS Comcast should have some penalty for their fraud.
Instead what happens is Comcast agrees to a "huge" $30 million fine that works out to $12/customer per year if everyone opts in to the lawsuit and the lawyers take 50% for their efforts, so the lawyers get $15 million, the customers who sign up get $12 back and the ones who miss the memo get $0.
The customers don't have any recourse to say "no, that's a shitty settlement, we want 100% of what we're owed not 10% of it" or "hey, 50% is too much for the lawyers, I'd rather take $0 than the shitty deal we were offered".
A just system would make the corporation pay the lawyer fees (as part of their punishment for doing illegal things) and the customers/victims would be made 100% whole.
> The customers don't have any recourse to say "no, that's a shitty settlement, we want 100% of what we're owed not 10% of it"
They definitely do, they can decide to opt-out, and retain the right to sue the company on that issue. But those who opt-out would have to go start their own lawsuit. For small matters where you were wronged by $120, and you only get $30 back, this is definitely not worth it to start your own lawsuit, the best action here is to take the money and boycott that company if possible. For bigger amounts, like lemon-law cars, it might be worth it, especially if the payouts look too small. For instance, $300 refund if you had to do multiple transmissions repair on your car doesn't seem that great, given that a transmission repair can cost from $500 to thousands of $ each. In that case it can make sense to opt-out.
> or "hey, 50% is too much for the lawyers, I'd rather take $0 than the shitty deal we were offered".
The article says they usually get $2 for $10, which can still look high I agree, but definitely not 50%.
You actually can remove yourself from a class action and retain the right to sue independently, if you think you will do better and win your 100%. (Or for any other reason)
"Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them."
Actually, you are misunderstanding the purpose of class actions.
You may see it as s some ideal, but it's not why they were created.
They were created to simplify similar cases into one case for the purpose of not having two trials when you could have one.. That's it.
It was literally for the efficient administration of justice.
Not to do what you suggest the purpose is. Take a gander at the history of the federal rules of civil procedure, this is very widely documented and known.
This is one reason the supreme court was able to say "no more". They are just a collection of court rules.
I'd also argue they are not the ideal instrument, as they rarely actually achieve any real gains for the individuals.
>I'd also argue they are not the ideal instrument, as they rarely actually achieve any real gains for the individuals.
I can't say whether or not the process is ideal, but I can say that the benefit to individuals is irrelevant. The COLLECTIVE - the whole society - benefits in a big way when the behavior of a large corporation doing very small harm to thousands or millions of individuals is punished and deterred. The bar for success can't always be directed at individuals; there are very positive societal level benefits that are small to individuals but huge to the whole ecosystem.
"but I can say that the benefit to individuals is irrelevant. "
Again, never the original purpose, and while a good goal, class actions are surely ineffective at this.
" The COLLECTIVE - the whole society - benefits in a big way when the behavior of a large corporation doing very small harm to thousands or millions of individuals is punished and deterred."
Also as mentioned, I think this is very true, but class actions have pretty much not had that effect at all.
There are very few areas where class actions have been effective at accomplishing this.
How about a citation instead of the somewhat snarky suggestion to "take a gander at the history of the federal rules"? I am not an expert here, but Wikipedia suggests that the history of grouping similar cases for efficient resolution by the courts is not actually the basis for the modern American class action--it was pushed by those who thought it would be a good vehicle for new cases that wouldn't have been viable previously (as the GP suggested):
The Advisory Committee that drafted the new Rule 23 in the mid-1960s was influenced by two major developments. First was the suggestion of Harry Kalven, Jr. and Maurice Rosenfield in 1941 that class action litigation by individual shareholders on behalf of all shareholders of a company could effectively supplement direct government regulation of securities markets and other similar markets. The second development was the rise of the civil rights movement, environmentalism and consumerism. The groups behind these movements, as well as many others in the 1960s, 1970s and 1980s, all turned to class actions as a means for achieving their goals.
Also, it's somewhat misleading to cite to the history of the class action and ignore current justifications. This is like arguing that U.S. democracy is bad because it was originally a method for a small group of wealthy landowners to control the country, while ignoring the fact that currently anyone can vote. The history of class actions in England, although interesting, does not make the GP comment incorrect. If the modern purpose is only to simplify similar cases, we already have coordination and consolidation.
How does that work, then? If I sue a company and then N other people separately sue the company for the same reason, then the courts turn it into a class-action? That doesn't seem just. The parent's perspective seems to make more logical sense. That is, the only reason why I'd want to participate in a class-action was if the damages were so low that it wouldn't be worth the effort to sue separately. If I had high damages, I'd be upset if someone transformed my case into a class action.
"How does that work, then? If I sue a company and then N other people separately sue the company for the same reason, then the courts turn it into a class-action? That doesn't seem just. "
Yes.
Second, just in in what sense? If the questions affecting everyone are the same, there's no point in having 5 trials about it.
"(b) Types of Class Actions. A class action may be maintained if Rule 23(a) is satisfied and if:
..
(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. "
> Class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them.
If you think of litigation in economic-theoretic terms, yes, that's the purpose of class actions. But while you're in that head space, you also need to consider the principal-agent problem: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble.... Where the claims are small and the class members are unsophisticated, the principals (the consumers) don't have sufficient incentive to control their agents (the lawyers).
That manifests in class action litigation in two ways. Class action lawyers are incentivized to bring cases that are marginal on the merits: http://www.abajournal.com/news/article/posner_opinion_blasts.... They also are incentivized to settle good cases for for a fraction of potential damages.
The end result is a system that doesn't do a great job of really anything. Consumers get only a tiny fraction of what they've lost. Companies aren't deterred--they just treat the occasional payout as the cost of doing business.
Is this related to the transactional principal-agent problem in things like real estate, where the incentives of the agents are to close transactions as quickly as possible, since optimizing for the quantity of transactions handled is wildly more lucrative than optimizing for the outcome of any one transaction?
It's more a manifestation of thst problem than merely related.
Class action lawsuits are a crappy solution, but often better than the alternative, which is often nothing.
(In some cases, mass direct-action lawsuits are superior, but coordinating those also has substantially increased overhead, and they gave some of the same settlement incentives; OTOH, because they are positive approval rather than opt out, it's less likely that a small-fraction settlement gets approved.
The alternative is regulatory agencies with teeth, as you see in the EU. 'Doing nothing' is a false dichotomy unless you subscribe to libertarian/corporatist philosophy. (Which would, if it could, abolish the position of the attorney general.)
> The alternative is regulatory agencies with teeth, as you see in the EU.
I was referring to the alternatives available in the status quo legal system in the US, but I disagree that more powerful regulatory agencies are a complete replacement for class actions, though they are perhaps independently desirable.
> 'Doing nothing' is a false dichotomy unless you subscribe to libertarian/corporatist philosophy. (Which would, if it could, abolish the position of the attorney general.)
No, it wouldn't (at least, most libertarians and even more so pro-corporate types recognize a role for government and a role for AGs within that government, though a narrower role than the status quo for each.) It might eliminate state causes of action on behalf of consumers, but those aren't the whole (or even main) thing that AGs, who are the state or federal government's chief legal counsel and law enforcement officer, do.
(Also, you seem to be missing “corporatist” to mean “pro-corporation minarchist capitalist”; corporatism is a disinct politico-economic philosophy that is about as far from libertarianism/minarchism as possible.)
I don't meant to conflate corporatists with libertarians - just that they tend to come to the same conclusion on these issues.
And looking at the American political landscape, there are far more dyed-in-the-wool anti-human corporatists holding power then there are libertarians.
Yes, I think so. There is at least a significant subset of the industry where the most lucrative strategy is settling a large volume of mediocre cases quickly.
I think you're making a "perfect is the enemy of good" mistake. Yes, the class action mechanism has its flaws and is open to abuse. But you're trying to imply that ALL class actions are like the one in the linked article, which is not the case, and it's not exactly honest to paint all or most class actions as being like the one in your link. Or even that the problems of incentives invalidates any use of class actions.
Not to mention that the article offers data to refute this idea that only the lawyers benfit (from a study the author commissioned in 2010 while at the Consumer Financial Protection Bureau):
>Opponents also claim that the rule benefits lawyers rather than consumers. In reality, lawyers collect a small portion compared with consumers, and only if they succeed. For every $10 that a company pays out for wrongdoing, we found about $8 goes to consumers and $2 goes to pay legal costs. In any event, banks choose to hire lawyers to file class-action lawsuits, and ordinary people deserve to make the same choice.
>Consumers get only a tiny fraction of what they've lost.
But the whole point is that consumers have, individually, lost very little. If you were overcharged $20 and got $10, or $5, the company in aggregate has still been forced to pay out a lot. Any individual consumer isn't going to receive significant compensation even in a 100% win.
The article again offers data to refute this idea that consumers don't get fair compensation through class actions:
>First, opponents claim that plaintiffs are better served by acting individually than by joining a group lawsuit. This claim is not supported by facts or common sense. Our study contained revealing data on the results of group lawsuits and individual actions. We found that group lawsuits get more money back to more people. In five years of group lawsuits, we tallied an average of $220 million paid to 6.8 million consumers per year. Yet in the arbitration cases we studied, on average, 16 people per year recovered less than $100,000 total.
>Companies aren't deterred--they just treat the occasional payout as the cost of doing business.
This is true of any litigation, yet we don't usually see arguments against the very concept. It still at least forces companies to consider one more bar to abuse.
Until we have better regulation, this imperfect tool is something consumers have available to them to fight abuses of a type that normally wouldn't be addressed because of their nature. Without this tool, consumers would have no recourse. As the article says:
>As one judge noted, “only a lunatic or a fanatic sues for $30.”
>When a bank charges illegal fees to millions of customers and then blocks them from suing together, a result is not millions of individual claims, but zero. So the bank gets to pocket millions in ill-gotten gains.
Arguing against class actions makes no sense until we do have legislative or regulatory alternatives.
Everyone in my family growing up was a lawyer, and the saying I always heard was "in class action lawsuits only the lawyers are getting rich". I've also heard this from many other lawyers outside my family. So it's at least a widely held belief.
But that's the point: what does that comment mean? Class actions, like any court action, isn't meant to make the plaintiffs rich. It's to obtain restitution for their harm. If they were ripped off $10, then they should get something around that. The lawyers who got them that compensation should of course be paid for their work.
Right, but if we take his statement at face value, and a significant portion of the money changing hands in a class action is going towards lawyers, it's at the very least a massively inefficient system.
Well, in the article the author of the linked article points to a study he commissioned at the Consumer Financial Protection Bureau which found
>In reality, lawyers collect a small portion compared with consumers, and only if they succeed. For every $10 that a company pays out for wrongdoing, we found about $8 goes to consumers and $2 goes to pay legal costs.
Of course we could take issue with this study, but unless someone can present some evidence in its favor the notion that only the lawyers ever profit from class actions seems like received wisdom "everyone just knows".
How much would you pay to somebody to ensure that a big evil corporation is not cheating their ~10M customers by $10/year (100M/year in total)? $10M? $50M?
This is the perspective that makes sense to me. Regular Joe individuals may not be getting rich, or even getting decent compensation for the harm they experienced, but is society getting a benefit by having a process that disincentives large companies from harming millions of people in small ways for big profits? I'd say that yes, that is VERY valuable for society, and if a handful of lawyers are getting millions for it... so what?
This doesn't mean it's the ideal solution to widespread consumer harm, but it's a tool we have at our disposal NOW instead of hypothetical legislation or regulation we might have at some point in the future...
I don't think you should assume Rayiner doesn't understand what a class action is. He's an appellate lawyer, I'm pretty sure he gets what a class action is.
He's basically saying class actions don't work the best if your goal is greater consumer protection. There are other ways to do it that are more effective.
I'm not assuming anything. I'm saying that he's misunderstanding the purpose and value of class actions based on the content of his comment, and am not impressed by attempts at arguments from authority. Appellate lawyer or not, his points were not good ones.
I mean, the very article he's commenting on directly refutes his points about class actions resulting in less compensation for consumers and only or largely benefiting lawyers.
It's not an argument from authority. It's an attempt to sidestep the breaking things down into basic parts for non-technical discussion, by pointing out that the person you responded to is capable of having a technical discussion on the subject.
You make some statements here that are arguable - for example, that 'class actions are an ideal instrument for redress of harm where the harm to any individual is small, but the harm is widespread, meaning that a company is cheating or hurting many people but it's not worth any one individual's effort or expense to sue them.'
That's not always true. Legislation or regulatory oversight are often better solutions as they occur faster and have broader implications. You even acknowledge that later in your comment as you agree that regulation is better.
I don't think anybody in the thread is arguing that individual arbitration is a better method. The question is whether class-action suits is the final method or if we should be considering different regulatory controls.
Yes, I noted that regulation or legislation is better, but we don't have them now. Under the current system, class actions are valuable instruments for consumers.
No one, myself included, is saying class actions should be "the final method", just that it's wrong to argue against them when they are currently generally the only method available to consumers for certain kinds of harm. I'd be the first to support robust regulatory protections that protect consumers to the point that they render class actions redundant, but sadly we don't live in that world.
You don't live in that country. Many other countries do indeed have much stronger consumer protections. Regulatory ministries in other nations often have nearly plenipotentiary authority in their area of regulation. Once your business is noted as doing something anti-social, you can expect increasing interest from them, and they have full authority to just inspect the books and premises of your business and see what you're up to, and decide how they want to react to it.
Class actions are a poor substitute for good regulation. They are the bare minimum, or somewhat less than the bare minimum.
Personally I don't like that regulatory oversight is being outsourced to lawsuits both class action and from regulators. One might say that if Comcast were overcharging their customers they were defrauding them. And while I am generally in favor of weaker regulations I am in favor of much stronger penalties for those that break the law. In your example not only should Comcast be disgorging any fraudulently obtained gains with interest, people should be going to jail. We have as a country for too long accepted this system where when a company does something illegal we let those that committed the fraud off the hook and send the bill to the companies shareholders. The idea that HSBC should have been allowed to continue to operate in the US after its conduct is absurd, (and yes I understand what would have happened if their banking license was pulled). That there have not been large numbers of arrests of Wells Fargo employees given the amount of fraud committed and laws broken is also absurd. If you or I fraudulently opened millions of accounts we would rightly be going to prison for a very long time.
I do find it gratifying to see VW employees being indicted. But the arrest of executives who commit wrongdoing is far too rare these days.
It's a chicken and egg problem. Let's the see the effective government regulators start regulating before withdrawing the admittedly flawed class action lawyer-regulators.
Yes. I am in France and IANAL. When you act as an individual, you are a consumer and as a result, you can always ignore EULA. But beware if you act as a company (even a single people one). It becomes a binding contract.
I don't understand why binding arbitration is legal for anything ever. Having your disputes resolved in court is a fundamental right. Signing away that right in a contract should be impossible, like signing yourself into slavery.
I agree with you in principle that you shouldn't be forced into binding arbitration a priori before any dispute arises. I disagree with you on the point that I think binding arbitration can be a useful alternative remedy to the traditional legal system.
Binding arbitration serves to resolve the dispute. If you can go through binding arbitration and then still go on to sue in court, then it isn't really very binding, is it? So, in order for binding arbitration to be binding, it has to be possible to legally contact too resolve a dispute by binding arbitration. In doing so, you contract to abide by the judgement and waive your right to pursue further legal action (with potentially a handful of exceptions). It is often beneficial for both parties to go through the accelerated process of binding arbitration rather than drag disputes through the overworked court system.
I see how it could be advantageous. It just doesn't seem worth it.
For just about any fundamental right, you can come up with scenarios where it would be advantageous in that scenario to be able to sign them away. But we generally don't allow this, because those fundamental rights are more important than whatever advantage might come from signing them away.
I don't see that the "binding" in "binding arbitration" is necessarily in conflict with the ability to sue. Contracts themselves are considered to be "binding," yet we can still sue over them. If binding arbitration were similar to that, then you could still sue over the result, and the court's job would be to look at the result of arbitration and decide whether it was correct or not. If the arbitration is truly beneficial to both parties then neither one will sue.
>I think binding arbitration can be a useful alternative remedy to the traditional legal system.... It is often beneficial for both parties to go through the accelerated process of binding arbitration.
We see this on TV.
Those court shows (Judge Judy, People's Court, Judge Mathis, etc) are not actually "real" court, but are binding arbitration. By agreeing to arbitration both parties who appear in those forums "win" in some way no matter the outcome. The judgement is paid by the show instead of the defendant, both parties get an appearance fee plus an all expenses paid trip to Los Angeles or New York (depending on the show). So the plantiff is guaranteed quick payment if they win the case and the defendant is guaranteed not to have to pay even if they lose.
Another benefit is the plantiff doesn't have to express any effort trying to collect the judgment (like appearing in court again to get an order to garnish the defendant's bank accounts) and the defendant won’t have any civil judgement on their record (they can show up on your credit report and can negatively affect your credit score)
On top of all this the audience is entertained, Judge Judy is one of the most popular daytime shows.
(Also the judges on these shows are [usually] MORE experienced than the magistrates who hear cases in small claims court)
There's no incompatibility with something being a right and someone choosing to not exercise that right. Your argument is similar to arguing that you should not be allowed to speak while under arrested, or that you should be forced to own property.
Turn it around and it's just a matter of not allowing anyone else to infringe on your rights to that extent; to go back to his example maybe you do have the right to sign yourself away to slavery, but nobody has the right to take up that contract.
Everyone uses the "signing yourself into slavery" example, but it's not clear what that means. If you consent to it, then it's not slavery (you can make arguments about "wage slavery," but I think that's a different issue). If you sign a contract to perform labor for some period of time, then change your mind later, the contract likely has some terms for breaking the contract early, and if it doesn't, it's probably not likely to be enforced by any court.
Choosing not to exercise a right is completely different from giving up a right.
I can choose to speak while under arrest, but I cannot give up my right to silence. I can choose not to own property, but I cannot give up my right to own it.
Somewhat-serious question: If someone hands me a paper that says this, can't I just do the same and hand them a sheet that renders all arbitration bindings null and void?
That's difficult to do when your cell provider presents the contract on an LCD screen, or via a web page.
On the other hand, the car dealership refused to allow me to redline their contract. I was fortunate that I could -- and did -- walk away, and I was able to find another dealer that didn't yet have a MBA clause.
It's not up to the courts. Congress passed a law, the Federal Arbitration Act, which explicitly instructs the courts to treat arbitration provisions at least as favorably as any other contract provision. In the absence of a conflicting Constitutional provision, the courts have no choice but to enforce the statute Congress passed.
Im a lawyer, you may be one too as we are a dime a dozen, but if not here is a dirty little secret...
The courts don't care what your litigation costs are, the only thing they care about is having as few cases on their docket as possible (i.e. They care about their own costs and their own workload).
Nobody is saying that arbitration shouldn't be available, or an option. What is being ragged on is the idea that a company should be entitled to put a mandatory binding arbitration clause into a contract that isn't negotiated, that in reality, a consumer has zero power to change.
The courts do, or buisinesses who lobbied congress for the mechanism do? Speculation, I don't actually know how this sausage got made, but I imagine it had a lot of grease from big companies.
The prevailing narrative is that the court system is somehow constantly overloaded, so everything from settling out of court to plea bargains to private arbitration are favored.
You don't need to couch this in conspiratorial terms: it's not "the prevailing narrative", courts ARE overburdened. The "somehow" is that they are underfunded and understaffed, because creating more judicial resources means spending more money and often raising taxes, which no one wants to do.
Everyone wants more judicial capacity, no one wants to pay for it.
The courts do prefer it, but from a legal perspective, as an adhesion contract with boiler point terms, the arbitration clause shouldn't have been enforceable.
It is definitely lower cost (and the vast majority of arbitration clauses end up allowing choice of arbitrator by plaintiff, or arbitrator is randomly selected with a couple chances to reject)
Just look at how the EU consumer protection directives are working over here. You're simply not allowed to waive your guaranteed rights as a customer in some sort of EULA or TOS. And if you are forced to, the whole contract is void in it's entirety and you're free to walk away from it.
One caveat you typically have with them, is that you forfeit your right to file a lawsuit for individual damages.
So I see hardly any advantage for the individual customer who got some individual issue of magnitude and is forced to choose between this or arbitration outside of the juidical system.
That would defeat the purpose, since it's usually not possible to go against EULA's or TOS.
If you're forced to sign a contract the contract is void, but when a specific line in a contract (or similar) is not correct according to law, not the entire contract is void, just the lines which are wrong.
One can never be forced to sign a contract.
F.I, in the Netherlands it's often stated in rent agreements that pets are not allowed, but this is not permitted to be in the contract by a judge, since such statements are too generic and restrictive.
A bit off topic here but this is IMHO a great challenge for AI: making a lawyer affordable for the masses when they are bullied by banks, airlines, etc.
>A bit off topic here but this is IMHO a great challenge for AI: making a lawyer affordable for the masses when they are bullied by banks, airlines, etc.
That isn't a great challenge for AI. That's a rotten legal and regulatory system. Why band-aid over society's real problems with software?
If you try to fix the broken system people who take advantage of the bad parts may fight you and/or sneak worse loopholes in (they tend to have the money to lobby hard).
If the AI makes it expensive to take advantage of the problem then they'll simply stop doing so.
Of course the race will be on to be the first person to work out how to trick the AI, that person could make a boat load before it is fixed or self-corrects.
Those are just the costs for you to sue ($5) and potentially what the company will lose ($30). You need to factor in that bringing a court case costs the taxpayer some amount of money as well which is presumably more than $35 to hear the case.
The usual way to deal with a $30 fee that wasn't valid in my experience is request a chargeback on your credit card and dare the company to come get it from you. That works often enough that court isn't really necessary IMO.
Why not create an AI bank instead so you never suffer the $30 loss anyway?
And we could say turn to the blockchain and smart contracts which market themselves as replacements for both real money and real lawyers, but we saw what happens when real techies write the smart contracts (case in point $150M DAO scam and then a fork of the blockchain itself), so we are definitely going to need to replaces software makers and coders with AI too.
And if you could build an AI smart enough to do all that, then it might logically conclude that the one thing all the problems you describe have in common is humans.
I don't think there's any simple or easy solution to these problems. They're messy human problems with vested interests, and smart people are going to have to work hard, together, to implement even partial solutions.
Government and politics are unpleasant and can go horribly wrong. But I've come to distrust all simplistic answers that begin, "All you need to do is X", whether "X" is "privatize everything" or "invent benevolent AI" or "allow the state to wither away in favor of an enlightened proletariat." No, I think we need to work very hard, be smart, and try to find common ground with as many other people as we can. And if merely sort of works, we should count ourselves lucky.
I sued a company where I worked. They were not paying my final dues after I left the company. It took me 1 year and lots of visits to court just to get my final dues. Finally after a year of all such waste of time, they came to me and asked for a settlement to which I agree and I got part of my money.
In India, even if you know you will win the case, it is not worth it. It will take your mental peace. Although I highly recommend to sue companies in other countries, In India we should think twice before suing anyone.
If they also had to hire consuel and appear in court, the burden was equally large on them. If everyone sued, the burden would cause change. Acceping things as they are is how you keep things bad.
Except that in the plaintiff's case, he is devoting 100% of his time while court is in session, while the company is devoting a fraction of their resources.
There is no valid reason why a company should require someone to sign away their rights, and it absolutely should not be allowed. Otherwise individuals might as well not have those rights at all.
Capture of the machine of the justice system by the wealthy is one of the most impactful and persistent market distortions in human history.
If people cannot bring the power of government to enforce appropriate costs against players with more market power government of the People, by the People, and for the People has failed.
It isn't just a capture of the justice machine by the wealthy, though I agree this is the case too. It is also an issue with the government, courts, and the laws themselves. How is a citizen supposed to petition the government over injustices and grievances, and be dealt with fairly according to the law, when the government itself sets the financial barriers to entry so high? How can a poor person get justice when the courts are set up to favor lawyers over citizens? You can represent yourself in court, of course, but any mistakes you make in not filing the right form here or declaring the right motion there will most likely result in a huge injustice being done by the courts, simply because you, as an average citizen, don't know how to navigate all the legal minutia.
Have the wealthy really captured the courts, or have the government, judges, and lawyers set up a situation in which only the rich get justice?
"First, opponents claim that plaintiffs are better served by acting individually than by joining a group lawsuit."
Then why should it matter if plaintiffs want to act collectively (ie, put themselves at a disadvantage according to the quote above)--wouldn't that benefit the opponents?
> FACT: products liability law reduced accidental deaths in the workplace. (source: https://www.cdc.gov/mmwr/preview/mmwrhtml/mm4822a1.htm)
There is no reason similar laws wouldn't work for consumers privacy. Tort law needs to be applied aggressively to data privacy.
How exactly does that source support the FACT? The words "liable" and "liability" appear nowhere in it. They credit the reduction in workplace fatalities to a number of factors, including technology, expanded enforcement powers of federal inspectors, mandatory standards, and the creation of OSHA and NIOSH. They make no mention of product liability or tort laws.
Relax sparky. The chart demonstrates the decline only. Don't go looking to government to praise the private sector or free market solutions when their budget depends entirely on the opposite being true.
At 40,000 inspections/yr it wasn't much OSHA with their tiny, often negotiated fines that caused the decline. ANSI is pretty much the gold standard for safety, not OSHA regs, so their non-mandatory standards don't get a lot of credit. It wasn't a magical fairy tapping a gossamer wand atop a dangerous machine.
It was thousands of plaintiffs attorneys suing the shit out of manufacturers who designed and sold products that could be made more safely. It was the tort laws that let them to sue. It was the insurance companies who extracted hefty sums to write products liability policies on manufactured machinery. And it was the innovators who used sensors, locking mechanisms, new training methods and private inspection procedures that have made the US a workplace safety leader.
The government legislated accountability.
The free market made it happen.
It can be the same with data privacy.
I don't disagree with the sentiment of the article given the examples provided, i.e. Wells Fargo. That said, given the climate for frivolous lawsuits brought by "shakedown" attorneys, it opens the flood gates for something far worse.
Maybe a better compromise is to allow for binding arbitration UNLESS the company is found guilty of fraud or other illegal activity, such as Wells Fargo.
Alternatively, perhaps tort reform to prevent frivolous lawsuits would remove the need for arbitration.
- Tort reform is largely a concept pushed by big business trying to avoid getting sued when they do wrong.
- The number of frivolous lawsuits in the US is actually pretty low.
- The lady burned by the McDonalds coffee was really hurt, and was only one of many many people burned by McDonalds coffee, who refused to serve it less hot.
I have some insight into the McDonalds coffee case...
1. The coffee spilled on the lady's lap in her car, buring her right through her jeans, the burns were so bad she required skin grafting throughout her upper thighs. It's also worth noting the coffee spilled because the McDonald's employee did not fasten the coffee lid;
2. As you mention during litigation it was discovered multiple people had been badly burned by the coffee from this McDonald's and others, and in prior cases the courts ordered McDonald's to turn the temp down based on expert testimony;
3. mcDonalds refused to comply with prior court orders, because a cost benefit analysis, you see truckers love their coffee boiling hot bc it stays hot longer, and it made financial sense to keep there main market happy and pay these lawsuits out rather than truckers potentially go elsewhere for coffee;
4. To punish McDonald's for ignoring prior court orders they awarded the woman punitive damages (while not rare is out of the norm), and she was awarded (I think) $3M in punitive damages which equals 1 day of McDonald's coffee sales;
5. Lesser known is McDonald's appealed the judgement and it was reduced, they and all other big companies took the original award and created the anti-litigation PR campaign we all know today, lady spills hot coffee and court awards millions
It's a good question, But the employees would have no right to sue McDonald's for any damages in civil court (negligence for example), and they would be limited to workers compensation claims/benefits.
Employees do not have no rights to sue for workplace injuries; intentional or reckless acts, and perhaps gross negligence, may be actionable even on situations where mere simple negligence would be subsumed into workers comp coverage.
I didn't say employees had no rights, I said these specific employees would have no rights to sue McDonalds, that is a major distinction.
The legal arguments are simple, presumably if there are employees who burned themselves, they would have: a.) likely set the coffee temp themselves (above the recommended temp); b.) at least been aware of the temp and risk; and c.) presumably have some responsibility for spilling the coffee on themselves. These facts would remove intentional/reckless/gross negligence on the part of McDonalds.
And I already know the counter arguments; However, if I'm actually wrong feel free to show me an a single case of a McDonalds employee suing McDonald's in civil court outside of workers compensation laws as the result of scalding coffee.
The problem with tort reform is not the idea of reducing frivolous litigation, but the fact that most of it isn't targeted at frivolous litigation. The most widely adopted tort-reform measures have been things like damages caps. E.g. the $75-million damages cap that would have applied in the BP oil spill had BP not waived it.[1] But cases where a jury awards a large amount of damages (or high punitive damages) are the least likely to be frivolous.
HBO produced a documentary [0] on that case a few years ago. I would recommend not watching it, only because they show the hospital photos of Stella Liebeck (the plaintiff in the case), and they are absolutely horrible.
> only one of many many people burned by McDonalds coffee
And many of these were sequential, so McDonalds had been told multiple times that their coffee was too hot, and they just refused to do anything about it.
> The lady burned by the McDonalds coffee was really hurt, and was only one of many many people burned by McDonalds coffee, who refused to serve it less hot.
What the documentary left out, was that it happened over a 10 year period where 700 out of 171 BILLION customers got burned from mcdonald's coffee. This is statistically nothing.
> Tort reform is largely a concept pushed by big business trying to avoid getting sued when they do wrong.
While I do not know who created the youtube video you posted, the "Hot Coffee" documentary that is frequently mentioned about the liebeck case is actually created by a special interest group, "Association of Trial Lawyers of America". If you think this movie doesn't have an agenda as well, I have a bridge to sell you. A video that does a better job of clearing up the misconceptions of the case is here: http://www.hotcoffeetruth.com/ .
> The number of frivolous lawsuits in the US is actually pretty low.
I have a hard time believing this. Frivilous lawsuits are easy to do in america and my friends (annoyingly) do them all the time. In fact, they brag about the ease of doing it. My personal estimate is around 70% of "I was injured" lawsuits from my friends were just made up to cash out.
Finally, "hot coffee" lawsuits happen all the time in america at temperatues as hot or hotter than what was given in liebeck case. And the cases almost always get thrown out by judges and juries because they are regarded as "frivilous". Source: https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restau...
>What the documentary left out, was that it happened over a 10 year period where 700 out of 171 BILLION customers got burned from mcdonald's coffee. This is statistically nothing.
That is the problematic thinking right there. You are sacrificing 700 people to be burned so badly by coffee they require skin grafting based on it being statistically insignificant.
While no doubt many cases settled, many didn't and in those cases McDonalds was ordered to turn the temp down so spilled coffee would at least not result in scalding that require skin grafting. It is not small thing or statistically insignificant that McDonalds ignored many court orders, but why did they ignore the court order? Because the same cost benefit analysis you presented, they'd happily continue their practicies of selling 171B coffees and paying out 700 claims, than change the coffee temp and potentially lose any coffee market share.
As I mention above this well known case is unique because it awarded punitive damages, equaling 1 day of coffee sales, solely because the company repeatedly ignored court orders (i.e. Told the court to go fuck itself), further what is never mentioned consistent with the anti-litigation PR is that the judgement was appealed and ultimately lowered.
> What the documentary left out, was that it happened over a 10 year period where 700 out of 171 BILLION customers got burned from mcdonald's coffee.
1. There aren't 171 BILLION customers on the planet.
2. So I can run around throwing boiling water over 10 out of the 300 MILLION people in the US, and it's totally cool because it statistically didn't happen? Good to know!
http://www.hotcoffeetruth.com/ also has an agenda. It's paid for by the U.S. Chamber of Commerce (a business lobby group) which is criticized in Hot Coffee.
Your appeal to this website is just as bad really.
I've never seen patent trolling fall into this category, probably because patent trolling is a viable way for firms to make money and being held liable for consumer injuries isn't.
I'd prefer it if, if you get sued, for any reason, you get a defensive 'pre-trial' with a public defender that does all the work, while you do nothing. No discovery, no anything. Since this isn't a 'full' defence, the plaintiff has a higher chance of winning than in a real trial, which he only gets after winning the pre-trial.
The court system should be able filter (and if that's a problem they should solve it on their end), we shouldn't just throw out an entire avenue because some people abuse it
I wish there was a way to preemptive lawsuit a industry, before it even undertakes a operation. Basically, a group of people bets with lawsuits on the damages done to society by a industrial operation, forcing anyone to endeavor such operations to build a huge deposit of settlement and legalfees to cover the threat - on for example cutting down "rainforrest". As state actors have proven lousy wardens on these goods of society, maybe the interest of private stakeholders might put such a bounty on the head of damaging activity's, that these cease or be replaced with less "dangerous" replacement endeavors, previously not viable in a market economy that rewards distributed short term damages to everyone.
I'd love to understand what the end hope is.
Very few class action lawsuits have resulted in any sort of permanent change.
Also note the whole reason for class action lawsuits was efficient justice, and class action lawsuits are a fairly recent creation, so that's not entirely surprising.
However the lawsuits that tend to change things tend to be "government vs".
Maybe it gives consumers a good feeling to be able to sue everyone, but is it actually helping anything?
Even in the past, people were not able to sue the telecoms or banks into having good customer service, or into not doing illegal things. Rarely, if ever, have they recouped the profits these companies made doing whatever.
Instead, all the companies just treat it as "cost of business".
I'm not sure it's really been a vehicle for effective change anymore.
Certainly arbitration won't be either, but maybe groups of super annoyed people may have better luck forcing the government into action than people placated by class actions where the government can wash its hands say "well, they already took care of it!"
Perhaps this is a situation where we shouldn't let the perfect get in the way of the good. Class actions return money to wronged parties. That's good so we should remove the arbitration cruft that is preventing that.
They didn't return anywhere near a good amount of money to wronged parties. Lawsuits were being settled for not even pennies on the dollar.
(arbitration also isn't cruft, but it's definitely getting an undeserved bad rap)
Actually, the situation i long for is before the creation of the LLC, where shareholders were responsible for paying for the corporations lawsuits. LLCs are fairly recent invention, and also one that hurt consumers a lot.
IMHO, No better way to get wells fargo to stop doing illegal things than have the people who own X% be forced to pay for it.
That'll change a board right quick.
> Actually, the situation i long for is before the creation of the LLC, where shareholders were responsible for paying for the corporations lawsuits.
You are a bit confused here. The liability shield for corporate shareholders is as old as the joint stock company, and older than the US.
The LLC is a newer business form that includes a similar liability shield for its members to the one corporations do for their shareholders, but differs in other mechanisms from both corporations or partnerships.
> IMHO, No better way to get wells fargo to stop doing illegal things than have the people who own X% be forced to pay for it.
Even without a liability shield, the shareholders personal finances would only be touched of the assets of the corporation itself were exhausted; while liabilities which would destroy a corporation and still leave an unpaid balance for unshielded shareholders do happen (see, MtGox for instance), none of Wells Fargo’s shenanigans have reached that level of proven liability (if they had, Wells Fargo would have gone into bankruptcy), so they wouldn't likely have been constrained by exposing shareholders to liability.
"Who do you think ends up paying, if not the owners of the company?"
Errr, the company is liable as a separate entity from the owners. That's the whole point. Ignoring insurance, etc, the owners/shareholders will not be liable. The entity will be, completely and legally separate from the people you are talking about.
If I own a company, and my bank account has a billion dollars in it, and the company has 1 million, and they end up fined for 2 million, even as the owner, i don't pay.
"As long as the company isn't bankrupt, incorporation doesn't change anything."
Of course it does. Your argument is a very indirect one, since the owners/shareholders quite literally don't pay.
Thus, any payment by shareholders comes in lost money in the market or something, which is both a very indirect thing, and rarely matches the actual cost.
"Full liability of owners isn't feasible in the current system, because it would expose every single investor to unlimited liability."
The first part seems very disconnected from the second. The fact that every investor has unlimited liability does not make it infeasible. Maybe unwanted by the investor, but not infeasible.
Right now, the risk of them going bankrupt/etc has been foisted on everyone else who they may injure. I get why the investors don't want that risk.
That's their problem.
I'd be fine with "LLC up to some amount of revenue/profit, you must convert to liable corp afterwards".
> Actually, the situation i long for is before the creation of the LLC, where shareholders were responsible for paying for the corporations lawsuits. LLCs are fairly recent invention, and also one that hurt consumers a lot.
Er, what? Shareholders are not responsible for paying corporate liabilities (except in rare circumstances where the corporate form is part of a fraud). The creation of the LLC as a new form of business changed nothing in this regard.
Have a law which makes any loss in a class action lawsuit immediately make the company lose limited liability status. Also, settling out of court will do the same thing, with automatic admission of guilt.
Probably not the perfect topic for the following question, but close enough for me to ask;
What is the deal with class action lawsuits WRT the monies lawyers get vs the plaintiffs.
I was a victim of fraudulent banking practices in 2008/2009 which resulted in the illegal foreclosure of my home in San Jose. I "won" my class action lawsuit and was "awarded"$1,100 for my victory on having a $489,000 house stolen from me by the bank. (Never missed a payment, never late, had credit score of 780 - this experience ruined me)
So I "won" that legal battle - but was unable to have my credit score fixed through the win...
So the question is: class-action lawsuit victories look to me to be a complete sham, so why would we value them as anything other than a "fuck you for not having enough money" enterprise - and where do the lawyers get off on their "right" to profit off such actions at the expense of others?
In 2010, the Consumer Financial Protection Bureau, which I direct, was authorized to study mandatory arbitration and write rules consistent with the study. After five years of work...
Talk about a schedule overrun. That project should have been finished in 2011.
I work in an industry tied closely to the actions of the CFPB, and they've had a lot on their plate ever since they were founded. They continuously get attacked by industry groups (formally through lawsuits and informally through what is more or less industry propaganda). I wouldn't be shocked if they spent the majority of their time and resources just defending their right to exist.
A slightly related issue that I find somewhat unsettling is how easily big companies that are being sued by state or federal governments are able to settle in out of court proceedings.
TL;DR: Big companies get to settle all to easily in cases brought forward by government attorneys without admitting guilt or wrongdoing, which is in contrast individuals (even wealthy ones) who often basically become the targets of what effectively becomes (sometimes faux) moral crusade. Companies end up:
1. Doing something that breaks the law, but in a sufficiently obfuscated manner.
2. Getting caught by government usually via the observation and study by keen citizens and/or outright whistleblowers.
3. Involving their legal team to both prepare for fighting the case, and to give PR guidance and statements. Marketing and salespeople downplay the concerns from both consumers and customers.
4. When the case becomes sufficiently uncomfortable, settle it with government for some fraction of the total estimated damages and not admit to wrongdoing.
5. Write off the settlement amount in the most tax-friendly manner possible via in-house or third-party accountants.
6. Get praise internally and externally for being scrappy and disrupting the establishment/government/noun-used-as-a-pejorative (yes, you too dear HN contributor/lurker).
7. Rinse and repeat 1-6.
I think a few of the things that Uber and AirBnB have had to settle essentially map to the steps I outlined above.
Note:
a. The sources above that I cite might not be the best ones to support my claim, but the general issue and the unwillingness to resolve it properly remain.
b. I realize that step 6 is mean/snarky/typecasting. My aim was to remind the reader that audible/silent praise/rebuke do have power, and that doing nothing does register as a signal in some situations.
That's not usually a choice, and it's not due to monopoly. Just about every company out there is adding these clauses to their contracts. And consumers have no power to combat them.
You have the power not to enter into the agreement. No one is forcing you to download a song from iTunes or open an account at Wells Fargo. If you don't like the terms, don't enter into the agreement.
Your suggestion is effectively a suggestion that anyone who wants to not implicitly agree to such terms simply doesn't participate in the developed world.
This makes zero sense. It's on par with saying "dude just turn off javascript".
Is the answer to political corruption buying a boat and taking refuge in the pacific ocean, or is actually correcting the problem?
That's not really power. And again, I see absolutely no valid reason why these terms should be allowed. There is zero reason why a company should be able to ask you to sign over your rights. They're rights for a reason. You're supposed to have them.
Letting consumers continue to sue is not the answer. It only incentivizes more litigiousness, which is part of the things that are ruining American society.
What we need instead is for the government to pursue these crimes on our behalf. The fines should be draconian with no options for them to dilute it the way the SEC does. And the fines should go towards some fund that specializes in charities instead of going to government coffers so that we don't incentive behavior like civil forfeiture.
So letting people who were legitimately wronged receive justice and fair compensation in court for that wrong is "litigiousness" and therefore bad?
First, I think you misunderstood what litigiousness means.
Second, merely labeling something as litigious doesn't make it a bad thing.
Litigiousness refers to frivolous lawsuits not legitimate ones. However large corporations have done a campaign of trying to label everything litigious to try and save money.
Personally, I like the fact that courts exist to let people redress wrongs. If regulation was so effective at stopping bad behavior, how did banks, one of the most regulated industries in the world, manage to open up phony bank accounts for customers with no regulatory involvement? In fact how did they cause the financial crash with no regulatory intervention?
Regulation is a bad joke and I'm convinced it's just a PR stunt by the government to make it look like it's doing something.
I agree that we need "the government to pursue these crimes..."
If the government did that, the need for consumers to continue to sue will mostly go away. Once we have real government protection of consumers the need for consumers to take justice into their own hands (so to speak) by suing would go away all by itself.
In the meantime, let consumers protect themselves.
Consumers can usually sue corporations at a court in their own jurisdiction. Many European countries also allow class action law suits. Yet, we have few law suits against corporations. There are other reasons for this:
- consumers are not awarded punitive damages,
- court fees are higher (usually a percentage of what you ask for),
- if the consumers lose they pay not only their own lawyer, but (to an extent decided by the court) also the lawyer representing the corporation,
- many European countries have consumer "watchdogs" / ombudsmen, i.e. public entities that have the authority to start cases against corporations,
- many European countries have a variety of consumer complaint boards that handle small claims efficiently and at low cost.
Few who know consumer matters in both the US and the EU would trade the European system for the American.