Consumer Bureau Loses Fight to Allow More Class-Action Suits.
Source: nyt
Senate Republicans voted on Tuesday to strike down a sweeping new rule that would have allowed millions of Americans to band together in class-action lawsuits against financial institutions.
The overturning of the rule, with Vice President Mike Pence breaking a 50-to-50 tie, will further loosen regulation of Wall Street as the Trump administration and Republicans move to roll back Obama-era policies enacted in the wake of the 2008 economic crisis. By defeating the rule, Republicans are dismantling a major effort of the Consumer Financial Protection Bureau, the watchdog created by Congress in the aftermath of the mortgage mess.
The rule, five years in the making, would have dealt a serious blow to financial firms, potentially exposing them to a flood of costly lawsuits over questionable business practices.
For decades, credit card companies and banks have inserted arbitration clauses into the fine print of financial contracts to circumvent the courts and bar people from pooling their resources in class-action lawsuits. By forcing people into private arbitration, the clauses effectively take away one of the few tools that individuals have to fight predatory and deceptive business practices. Arbitration clauses have derailed claims of financial gouging, discrimination in car sales and unfair fees.
Read more: https://www.nytimes.com/2017/10/24/business/senate-vote-wall-street-regulation.html?
customerserviceguy
(25,183 posts)What is a class action lawsuit? Something where I get a check for $10-20 and an attorney firm gets paid millions. Then, the sued firm jacks up the prices on its products/services, and if I'm stupid enough to still be a customer of that company, I'll pay it in the end.
At least with arbitration, I have a shot at becoming whole, maybe.
FakeNoose
(32,639 posts)But all it really means is another payday for lawyers. Like you say, just stop buying the over-priced and shitty stuff.
customerserviceguy
(25,183 posts)unless the payoff for the wronged victims is at least a hundred bucks, and limit the legal fees to a few hundred thousand for the attorney firms.
Adding punative damages for the victims is a way to get the payout to that threshold, in my opinion, and it provides the deterrent effect a bit better.
Jim Lane
(11,175 posts)"Let's see, there are a million people who have checking accounts with us, so we can rip them off for a total of $80 million and they won't be able to bring a class action because the damages will be less than $100 per person."
Limiting attorneys' fees is also a favorite right-wing recommendation. Limiting plaintiffs' attorneys' fees, that is. A complex class action often means that the plaintiffs' attorneys put in years of unpaid work. In fact, not only do they not get paid along the way, they may have to shell out scores of thousands of dollars to retain experts. After all that, they may find that the case is dismissed and they get nothing (or the class isn't certified and they get virtually nothing). The reason that some lawyers are willing to take this risk is that, if they achieve a substantial recovery for the class, they may receive a good fee -- provided the judge approves it. (Unlike the company's attorneys, the attorneys representing the class don't get paid unless the judge approves their fee application.)
If you put an artificial cap on the fee, it will be much harder for wronged individuals to find a lawyer willing to represent them against a big corporation.
customerserviceguy
(25,183 posts)Big business needs punitive damages to really be restrained. And why do you defend multi-million dollar paydays to attorney firms when a half million or so should be plenty?
As far as finding lawyers to take cases, most of these class action suits are attorneys trying to find people to back them up by asking for a few dollars as part of the scheme.
And judges are way too cozy with law firms looking to get these things approved. They do not right wrongs, they do not restore justice, all they do is make lawyers rich.
Jim Lane
(11,175 posts)That's why, for years now, weakening or eliminating class actions has been a right-wing policy objective. The bill that Congress just passed is only the latest example. A lot of big banks and other corporate malefactors felt restrained enough by class actions that they began stuffing no-class-action clauses into all their agreements. When the CFPB tried to put a stop to their efforts, they had their hirelings in Congress overturn the rule.
They're not "restrained" in the sense that the possibility of a class action completely prevents corporate misconduct. But it certainly acts as a deterrent. The laws against murder don't prevent murders but we'd certainly have more murders if the laws were repealed.
As for the lawyers, limiting plaintiffs' attorneys' fees is another right-wing goal, again because it would make it harder for people to bring big corporations to justice. Many of these cases require the lawyers to spend huge amounts of time and incur considerable out-of-pocket expenses. Sometimes the case fails, and then the lawyer has not only worked for nothing but has had to pay for the privilege. Lawyers are nevertheless willing to take iffy cases because, if they win some and lose some, the winners will pay for the losers. With an artificial cap on attorneys' fees, only the slam-dunk cases would be brought.
ananda
(28,860 posts)Amazon's only paid cents.
haele
(12,654 posts)Arbitration only means that the company lawyers, who know the arbitrators, will always manage to get the best ruling for their company and the public will never know there's an issue that could possibly kill hundreds before anyone gets around to dealing with it.
I've experienced "arbitration", both as an individual and as a project manager handling goods and services contracts for our project purchase.
You still need a lawyer who will get at least half of the settlement as well as their baseline fee for your case, and there will be a concerted push to get as much blame as possible put on you - down to the slightest stutter you may have made on the complaint you phoned in when you first asked to speak to a supervisor about the problem.
Some company cheats you (or your company) out of contracted necessary services to the tune of $5K, and the contract dictated you needed to go to arbitration for any issues?
You're SOL, unless you're willing to pony up $2K for a lawyer to take your case in the first place, and agree to let him/her have half the settlement.
Without a lawyer, there's an 80% or so chance arbitrator is going to find you to have some responsibility for the fault (around 50/50), and maybe you'll get a quarter of the actual cost of the damage for "the misunderstanding" and to go away so the company that was really at fault can go along their merry way screwing other customers, because they can claim...
..."It's only an unfounded rumor that we've got a bad product, and all those people making nickel/dime claims are just trying to get money from us - if it really was that bad, why didn't they bypass the arbitration and take us to court?"
Companies that screwed up are always going to look for a way to reduce any compensation you may morally be eligible for.
As for why you always need a lawyer in arbitration with a lawyer at least, you'll be lucky to get your lawyer's fees back along with the $5K no matter how egregious that company acted. But unlike a court suit, there's no "pain and suffering", no "additional costs". Just what they cheated you (or your company) out of and your lawyer's fee.
The threat of publicity and a long, drawn out class action suit is what gets most manufacturers and corporations to change policy or processes for the better instead of for the bottom line profit. Not some sort of sense of fair play.
You may only have gotten $10 in a class action lawsuit. But a problem was addressed in the court of public opinion, if nothing else, and people - hopefully regulators - are keeping an eye on that company.
Haele
Stuart G
(38,427 posts)turbinetree
(24,701 posts)In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.
Maybe just maybe if the media would explain what this amendment meant, and how republicans don't give a shit about the CONSTITUTION and those words in the SEVENTH AMENDMENT
Wonder how FLAKE and CORKER , voted let me guess-------------not for you and me
PDittie
(8,322 posts)Only Miz Lindsey and John Kennedy of Louisiana joined the Democrats among noes.
Let's dispense with this notion (quoting Little Marco Rubio, who also voted yes) that Retiring Republicans Against Trump are anything except the same old GOP pigs at Jamie Dimon's trough.
turbinetree
(24,701 posts)and that there party is under a "TRAITOR, and such.
These jerks will still put party agenda above country............and to top it all off, they get a retirement of over half of what they were getting while sitting on Congress------------amazing, absolutely amazing, and if the media were to speak it like how you and I are speaking--------------it would further expose the BS--------------but nope
WE have the continuation on a downward creation of a third rate country by "republicans" now matter how they describe themselves they are still "republicans"
LonePirate
(13,421 posts)LeftInTX
(25,330 posts)Jim Lane
(11,175 posts)From this article: