When we talked about arbitration this week, one of the issues we looked at was the ability of corporations to use arbitration agreements and class-action waivers to essentially eliminate class action lawsuits. Class actions can be essential for customers who have been cheated out of small amounts of money: in cases like Conception v AT&T, where there was an allegedly fraudulent $30 fee, what lawyer would take a case for a $30 judgment? Only by joining together the thousands of AT&T customers who were charged the fee and sharing the legal expenses, would a lawsuit make economic sense. Following AT&T’s lead, Sony has changed the terms of service for its Playstation network to prevent its customers from filing class action lawsuits, such as the ones filed after last year’s massive data breach.
Class actions don’t always benefit customers, however. One class-action lawsuit against VW proposed giving $8 million in repairs to some customers and paying the attorneys $23 million–all while requiring many class members to give up their right to sue VW in exchange for . . . nothing. The settlement is currently being appealed.
For class members, there is another option: to opt out of litigation. Heather Peters purchased a 2006 Honda Civic Hybrid that Honda claimed got 50mpg. In actual use, it never even came close to that, and after a software update, got around 30mpg. A class action lawsuit was filed, and the proposed settlement would pay Honda owners about $100 each in damages and pay the attorneys $8.5 million. Ms. Peters opted out of the class action and sued Honda in small claims court instead. This week, a judge in that case awarded her $9,687. Ms. Peters has a website where she encourages others to opt out of the class action and provides copies of all the documents she filed in her case. The full 25-page court opinion ruling in favor of Ms. Peters is also available. Results will vary from state to state: in California, the maximum award available in small claims court was recently raised to $10,000; here in Alabama the limit is $3,000.
