A Seattle blogger who goes by the handle Rex won a small-claims lawsuit he filed against Apple after it reneged on a promise to fix his defective computer. This kind of man-bites-dog moment is rare, but in the wake of legislation that allows companies to prohibit customers from filing class-action suits against them, watchdog groups say small-claims court is the only weapon consumers have left.
Rex details the entire time-consuming, frustrating ordeal on his blog. The short version is that he bought a laptop in 2008 that turned out to be one of a batch that contained a defective chip. Apple acknowledged the defect and said it would replace it when it burned out. When the chip fried three years later, the company reversed course, first stonewalling Rex and then claiming his computer was a slightly different version than the model for which it had agreed to replace the chip.
Multiple visits to the Apple Store, phone calls and letters didn’t get Rex’s laptop fixed. In March, close to four years after he bought the laptop, he filed a lawsuit in small-claims court. Fortunately for him, he’d documented his multiple failed attempts to resolve the problem, because when he went to court last week, the judge ruled in his favor. (Apple declined to comment for this story.)
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This tactic worked for Rex, but if you’re thinking about trying this at home, consider this: “This was a savvy and sophisticated consumer with the time and energy and patience to try and right a wrong,” says attorney Bruce Rogow. “It is a rare consumer who could travel that road.”
Most Americans wouldn’t go to this much trouble, says Harvey Rosenfield, founder of Consumer Watchdog. “And the companies know that.”
In the past, wronged customers could band together and file a class-action lawsuit. “The whole reason why class actions were set up is because most Americans don’t have time or money to go to court over a $10 overcharge,” Rosenfield says. But today, most companies have added clauses to their customer contracts that prohibit class-action suits.
Instead, the contracts mandate arbitration, which is a very business-friendly procedure. Nonprofit group Public Citizen says 94% of all arbitration cases between a person and a company get ruled in favor of the company.
Does this sound unfair? Others thought so too and took it all the way up the judicial food chain. But the Supreme Court gave companies the thumbs-up to keep their no-class-actions, arbitration-only clauses. As a result, Rosenfield says, corporate lawyers can’t rewrite their contracts fast enough to include this verbiage.
Rogow says Rex’s story, although it satisfies everybody who’s ever wanted to stick it to a company that jerked them around, is a stark glimpse into the future of what customers will have to do if they want to stand up for themselves. Rather than have one case spearheaded by a legal professional, every single person will have to shepherd his or her individual case through the court system. “The effort made underscores why class actions are the only realistic remedies for consumers,” he says.
“Companies know most consumers won’t have the time, resources or ability to take them to court,” says Ira Rheingold, executive director of the National Association of Consumer Advocates. “They’re scrambling to make money every day. To write letters, keep records, get on the phone — this takes a level of persistence and time most people don’t have.”