Responding to the New York Times’s powerful critique of the Supreme Court’s AT&T Mobility v.Concepcion decision that lets corporations opt out of class action lawsuits by injured consumers, Forbes Magazine’s blog derides the very idea that class actions benefit victims of corporate wrongdoing.
According to Forbes, class actions are no more than ways for attorneys to get rich at the expense of class members. Forbes points to a consumer class action against a company called DirectBuy, in which, it says, attorneys for the class sold out consumers by agreeing to a settlement that provides nothing at all for half the class, and benefits of very little value to the other half. Says Forbes, “Even the consumer watchdogs at Public Citizen”—that’s us!—”found this one impossible to swallow; they’ve filed an objection.”
Forbes’s example proves the opposite of the point they’re trying to make. Yes, we filed an objection in the DirectBuy case, as we often do when we see a class settlement that isn’t fair. A lot of other class members, as well as state attorneys general, also objected. And what happened? The court refused to approve the settlement.
You see, one of the benefits of class actions is that they can’t be settled unless a judge independently looks them over and decides they are fair to class members. And, more and more over the last 20 years as watchdogs like Public Citizen and others have filed objections to bad settlements, courts have made good on their obligation to protect class members. The result? Coupon settlements that benefit corporate defendants and enrich lawyers while giving little or nothing to class members are, increasingly, a thing of the past.
By contrast, judges aren’t even permitted to ensure fair outcomes when individuals are forced into one-on-one arbitration rather than being allowed to join together in class actions. Courts generally overturn an arbitration result only in the rare case when someone can prove an arbitrator was corrupt or deliberately ignored the law. Aside from that, pretty much whatever the arbitrators say goes.
And—you guessed it—it’s the corporate defendants who, through the take-it-or-leave-it “contracts” we have to sign if we want any of the necessities of modern life (a job, a phone, a car, credit), decide which organizations will conduct the arbitration.