U.S. Consumer Bureau Loses Fight to Allow More Class-Action Suits

I've been in similar situations and I've resolved them by writing an old fashioned letter to the company. It feels like a chore but it's much less stressful than interacting with telephone support. And letter handling departments seem to have more clueful employees.

Agreed. The biggest issue I have with the parent comment is that the current Congress is unabashedly selectively enforcing the legality of these regulatory agencies, with a suspicious emphasis on helping corporations.

Here's what I'm seeing in the linked report:

1. They project 3,000 extra class actions will happen as a result of allowing class actions. The businesses receiving them will spend a lot of money on lawyers and settlements. They say the businesses probably won't absorb the damage for these claims. They might charge customers more. So, profit-hungry companies being hit with class actions will charge their customers more while benevolent ones won't and those not doing whatever actions cause class actions will be cheaper. Good companies, at least in court terms, will be cheaper.

2. Few (13%) of the class-actions result in relief to those affected and suing. They project four in five cases will provide no relief. This ignores a huge reason for class actions: making companies doing bad things lose enough money to change their practices. Class-actions have been far more successful at this than individual lawsuits or arbitrations due to the dollar amounts in No 1.

3. In class-actions that generate class-wide reliefs, few customers actually claim the funds they're offered. The report thinks this means the class-action was worthless. Again, ignores the value of getting justice and changing corporate activity in No 2 which might have been consumers' goal all along.

4. The plaintiffs' attorneys will make a lot of money doing the class-actions. Businesses being hit with class-actions will pay out an extra $330 million to their victims' attorneys. So what. It's a separate issue. The plaintiffs are still going for class actions so clearly they find this better than not doing the class action. The big companies are also fine with shelling out millions on attorneys and lobbyists to do what benefits them. Consumers will let those people make money to benefit them, too.

5. This report ignores the effect of meritless lawsuits. Defendents often settle just to avoid more damages. This is a general problem that. I'll also note that the kinds of companies often hit by class actions similarly push problems on people hoping most won't sue for extra damage. They're actually doing that right now by forcing arbitration. I feel little mercy for them.

6. The report claims the rule will not improve compliance by companies with rules or norms that benefit consumers. Claim there's been no improvement in class-actions over arbitration events. This is possible but not a disqualifier. The data I've seen shows class actions have changed corporate behavior before. I've also seen class actions or just big lawsuits that have had little effect. There's certainly no guarantees one method of justice and/or redress will accomplish its goals. That's also certainly not a reason to get rid of it.

In the analyses, the report also compared benefit of class actions versus arbitration supporting customers might want the benefits of arbitration. I may have skimmed over something but it seems they're ignoring the mandatory... no other option... part of arbitration status quo when consumers prefer to be able to do either option. If I didn't miss something, that would be misdirection in the report like how they ignored the punitive, market-changing effect of class action to focus entirely on money-making aspects.

Then, they do it again in the next report on cost-benefit analyses. They seem to just focus on money making and losing with no concern for consumers' right to essentially not be abused by collective industry behavior. The consumers didn't want mandatory arbitration to be deployed across the industry. The net benefit was companies kept their profits higher when they abused consumers. That's what the ban of mandatory arbitration is about. The cost-benefit analyses ignores this entirely.

So, this report seems to only look at money making, ignores what consumers wanted, ignores how the financial industry was shoving arbitration down consumers' throats to benefit at their expense, ignore consumer demand for justice against big companies being accused, and further argues against class-action on specific damages defendants will be hit with. This is definitely some kind of propaganda to support with little evidence the anti-consumer action of supporting mandatory arbitration clauses.

I have an alternative that addresses most of the financial damage in the report: the companies can stop doing financially-damaging or deceptive things to consumers that make such large numbers take action against them. There's lots of companies in most sectors that don't. They don't get hit with class actions. Instead, they get referrals from satisfied customers. Whoever wrote this report should look into that sort of thing. Might be worth drawing attention to.

> If history is any indicator, in political systems this broken, other institutions collect power and either that power is sustained and relieves legal pressure or that power is revoked and the pressure builds until the system comes apart.

Just curious if you can give a good Western example for similar things happening in history?

I found striking parallels between the United States and China's Tang Dynasty. The Tang Dynasty was the most prosperous and influential era of ancient China, in terms of both culture and military. It was marked with culture fusion and immigrants from across the sino-sphere settled in its capital. During the early times of this dynasty, a meritocratic higher education admission system was first instituted to provide an avenue for upward mobility. Life was prosperous and Tang people were fat.

All of that started falling apart after 200 years of reign, and the late stage of the empire was dysfunctionalized by highly partisan power struggles between two fractions (https://en.wikipedia.org/wiki/Niu–Li_factional_strife). The meritocracy also failed, as the rich could afford better education and examination preparation, and the examiners gave preference to the applicants from wealthy families. You can call it the Imperial Chinese Ivy League legacy. The power of the throne waned, and the emperors were stuck between or murdered by warlords and eunuchs.

Tang Dynasty lasted a total of 289 years. If the United States survives 2065, then it beats Tang’s record.

I mean, the judge is going to respond by sanctioning the attorney(s) for frivolous litigation. If your legal argument (for why the case shouldn't go to arbitration) has been rejected in court, initiating even one more case before the same court with the exact same argument could justifiably be considered a waste of the court's time. Initiate several of them and you're going to be fined; 10,000 and you're probably looking at things like contempt-of-court charges and disbarment. That's aside from the fee to initiate each case, as Chaebixi mentioned.

That said, if you're willing to risk all that to make a political statement - i.e. to pressure legislatures to change the law around arbitration - I can't rule out that it could be effective. But I suspect that other avenues for making a statement would be cheaper and more effective (and avoid the stigma of abusing the court system).

For example, how about just taking out TV ads? Find some maximally sympathetic victims of the arbitration system, and have them tell their stories. Less dramatic, but right now I think there isn't all that much public awareness of the issue - the New York Times' series notwithstanding. Arbitration is such a classic "big corp screwing over the little guy" story that I think a large number of even Republican-leaning voters would oppose it, especially the Trump camp (ew, but still), if they heard the full story. But most of them have probably never heard of it, or have only heard one-sided accounts that emphasize how class-action suits cost businesses and don't usually win plaintiffs all that much money. (Both of which are true, but ignore the fact that class actions are effective at holding defendants accountable for violating the law, and getting them to change their behavior - whereas a trickle of arbitration cases can just be dismissed as a cost of business.)