Classy Class Action
In January we proposed some Simple Solutions to the perennially vexing question of Tort Reform. Following publication of that article there have been two interesting developments. The president has signed a half-assed federal tort reform bill into law, and Sten Gazette itself has become a participant in a class-action lawsuit.
The Class Action Fairness Act of 2005, signed by the president on February 18th, gives the Federal courts jurisdiction in many class actions, and puts some controls on the settlements reached or adjudicated in them. Critics argue that the intent and result of the Act are to protect defendant corporations, to the detriment of consumers. More vocal critics called it “Executive clemency for executive killers.”
In other news, despite Bush’s repeated bleating that “his” tort reform proposals are non-partisan and non-political, Karl Rove has publicly claimed credit for the strategy going back to Bush’s gubernatorial campaign in Texas, and the need for big-time corporate sponsorship to defeat Ann Richards.
In case we needed any further evidence of the need for genuine reform, Sten Gazette’s mail recently included a letter advising us that we are are eligible to participate in the settlement of a class action against T-Mobile (our cell phone providers). We’ve seen these before, of course, but this one is relatively simple and we can condense the two full pages of legal mumbo-jumbo down to the following brief summary.
In 2002, Judith Settle (honest, that’s the name of the original plaintiff!) sued VoiceStream Wireless, in King County WA, because of some presumed unfairness in the way “airtime minutes,” were calculated. The suit was admitted as a class action, and a Seattle law firm was assigned to represent the class members. The law firm has reached a settlement agreement with T-Mobile (successors to VoiceStream), subject to approval by the court. Here are the features of the settlement:
1. There are TWO classes, current customers and former customers.
2. Current customers (that’s us) have their choice of two settlements:
A: Ten minutes of additional air time having a value of
at least $2.85, or
B: A coupon for a 10% discount up to $2.85 on a single purchase of
of cell phone accessories (not including phones) from T-Mobile.
3. Former customers are only eligible for option B.
4. T-Mobile will bear the cost of the additional minutes or
discounts, the court costs, and the costs of notifying class
members of the proposed settlement.
5. The law firm will receive “up to” $275,000 in fees and
expenses, payable by T-Mobile.
Let’s hear it for American Justice. Thank goodness there are still concerned, dedicated citizens like Judith Settle, prepared to go all the way to see that justice is done and T-Mobile gives her back the $2.85 they cheated her out of!
Before this, our favorite example of class action tort abuse was the famous Blockbuster settlement, where customers were being overcharged for late fees. The settlement was coupons for future rentals from Blockbuster and, of course, a nice chunk of change for the lawyers.
The Class Action Tort. This is a graphical representation of a modern American tort settlement. The segments labelled with letters and numbers represent the settlement proceeds paid out to lawyers, the court, and the settlement administrators. The round candies (not to scale– magnified for visibility) represent the setlement proceeds paid out to individual class members. Note that as in the T-Mobile case, there are two colors of candies representing two settlement options, neither of which is cash.
–SG
What do you think? Please enter a comment below.
May 30th, 2005 at 10:14 am
ROFL! Love it! Especially the pun built into your graphic representation of a Class Action Tort Settlement. A torte to illustrate a tort. Seriously, you do a very good job of explaining and illustrating some very complex issues. Any chance you could give us an understandable definition of the word tort? And are you gonna take the minutes or the coupon?
May 30th, 2005 at 11:36 am
Neither. We’ll stand on principle and refuse to participate. We might even accept the invitation to write an objection letter to the court.
Torte. Usually pronounced “tort” in English, but properly “TORT-a” Dictionary definition (we’re not making this up): a cake made with many eggs and often grated nuts or dry bread crumbs and usually covered with a rich frosting.
A tort is simply a wrong (other than a breach of contract) for which a court can provide relief or damages. A simpler way of putting it is something that you can be sued for (that is not breach of contract). In one of those little language evolutions that we are so fond of, the word “tort” has come to mean the lawsuit as well as the underlying wrong. Lawyers and politicians like to use the word “tort” because it sounds cool and us poor civilians are mystified by it.
Traditionally one of the first classes you take in Law School is “Torts and Contracts,” and the course could as easily be called “how to sue people.”
As far as we can determine, all law suits are the result of a tort or a breach of contract. A breach of contract is technically different from a tort because the contract is an agreement between two or more parties, and a breach is not necessarily a “wrong.” In fact torts (and therefor civil court actions) are based on Common Law and are not crimes (violations of a statute or ordinance), but there is often overlap because governments feel obliged to write laws to cover every action imaginable. Possibly because in a criminal action the defendant can be fined, in which case the fine goes to the government, like a tax. In a civil action for tort or breach of contract, the government can only collect the costs of conducting the trial. The standard example from the “Torts and Contracts” textbook is tresspassing. You can sue someone for trespassing on your property (a tort) even if you can’t get the cops to charge them with “criminal trespass.”
And a more pertinent example lately is that you can sue someone for “wrongful death” (tort) independent of a prosecution for murder (crime).
No doubt a lawyer reading this will say that we are oversimplifying, but as the Bishop said to the actress, “it’s enough to be getting on with.”