If you sign away your right to participate in a class action, well, the Courts may send you right back to class anyway. This case involved T-Mobile customers who’d purchased wireless PC cards for use in laptop computers. The service agreement included a mandatory arbitration clause and also stated that customers waive their right to participate in any class action lawsuit. According to the Court, many customers couldn’t get the cards to fit into their computers, technical support didn’t help, and the stores where they bought the cards ignored them, so they filed a class action suit. T-Mobile sought to deep-six the suit and the judge that first heard the case dismissed it on the grounds that the customer agreements were valid. But the Ninth Circuit Court of Appeals reversed holding that a class action waiver in a contract where individual damages are likely to be small is unconscionable. So the little guy has won one and subscribers who thought they had no class are back in class, obviously they played their cards right.
THIS IS NEIL CHAYET LOOKING AT THE LAW™
Chalk v. T-Mobile USA, Inc., U.S. Court of Appeals for the Ninth Circuit, No. 06-35909, March 27, 2009, Reinhardt, J.