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Let Consumers Sue Companies

nytimes.com

51–60 of 279 posts

Re: Let Consumers Sue Companies

#51
In the EU you cannot bind consumers by such arbitration clauses: http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A3...

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.

Re: Let Consumers Sue Companies

#52
post #12

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 s…

Maybe class action lawsuits are inadequate but the people driving to get rid of them aren't proposing instituting stringent regulation first.

Re: Let Consumers Sue Companies

#53
post #8

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 refo…

I found this Adam Ruins Everything episode on the McDonald's Coffee Lawsuit & Tort reform really interesting: https://www.youtube.com/watch?v=Q9DXSCpcz9E if you'd like to jump to where they talk about frivolous lawsuits it starts here https://www.youtube.com/watch?v=Q9DXSCpcz9E#t=03m15s Some notes: - Tort reform is largely a concept pushed by big business trying to avoid getting sued when they do wrong. - The number…

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

Re: Let Consumers Sue Companies

#54
post #12

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 s…

>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.

Re: Let Consumers Sue Companies

#55
post #12

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 s…

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.

This is the typical corporate abuse enabling flaw in a lot of libertarian thinking.

Withdraw limiting regulations and replace them with market based compeititve mechanisms.

Except somehow the second part inevitably seems to get forgotten about...

Re: Let Consumers Sue Companies

#56
post #14

“only a lunatic or a fanatic sues for $30.” 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. If it costs you $5 , why not sue for $30 ?

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…

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.

Re: Let Consumers Sue Companies

#58
post #8

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 refo…

I found this Adam Ruins Everything episode on the McDonald's Coffee Lawsuit & Tort reform really interesting: https://www.youtube.com/watch?v=Q9DXSCpcz9E if you'd like to jump to where they talk about frivolous lawsuits it starts here https://www.youtube.com/watch?v=Q9DXSCpcz9E#t=03m15s Some notes: - Tort reform is largely a concept pushed by big business trying to avoid getting sued when they do wrong. - The number…

> 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...

The liebeck case was the exception, not the rule.

Re: Let Consumers Sue Companies

#59

Earlier quoted context omitted.

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.

Re: Let Consumers Sue Companies

#60
post #14

“only a lunatic or a fanatic sues for $30.” 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. If it costs you $5 , why not sue for $30 ?

Because the risk of paying litigation expense is in the four, five or six figures. Chasing a return with a potential risk of loss several orders of magnitude higher is insane.

I think the point is that the potential risk starting so high is keeping people from seeking proper justice.
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