Off The Wall #7

Class Action

I’m not what you would call a frugal person, although I will certainly take something that is offered for free. However, unlike my wife, I will not stop dead in my tracks when I see a penny on the ground nor will I pull to the side of the road to grab an aluminum can.

My wife can spot pennies from upwards of 30 yards away and she will pick one up from the 140 degree asphalt without hesitation. In her mind, a third degree burn caused by a hot penny is well worth the addition of that one cent to her coffers.

This fiscal behavior has us on opposite sides of a debate concerning class action lawsuits, which I think are damn near criminal. She thinks they’re wonderful because she can get something for free, although the cost is certainly greater for all of us in the long run.
Class action lawsuits are supposed to cover large groups of people, such as the 600 residents of the small town that were being slowly poisoned by Pacific Gas & Electric as portrayed in the film Erin Brockovich. This is a good thing.

Plus, Julia Roberts is a hottie. Having her represent you is worth the legal fees and everything else associated with class action lawsuits.

But when a group of lawyers gets together and decides to file a class action lawsuit against several of the world’s top banana producers for price fixing and other schemes to drive up the price of bananas, it is not good. The settlement in this case includes tons of bananas donated to food banks and “all legal fees and expenses to be paid to the attorneys.”

This, my friends, is the real fuel that drives class action lawsuits. Donating bananas to food banks is nice, but it does nothing for those of us that actually purchased the price-fixed bananas. Even if they offered us free bananas, it wouldn’t matter, because the company donating all those free bananas will simply raise prices to cover those free bananas.

Lawnmower companies were sued because they claimed their lawnmowers had 30 horsepower and they were actually only 28 horsepower. Millions were no doubt affected by this heinous act of horsepower misconduct, although they had no idea until a group of lawyers pointed it out to them. In fact, the suit demanded $5 million on behalf of the 6 million lawnmowers sold. You do the math.

This is the other ludicrous part of these lawsuits. The companies are more than willing to simply settle the cases to get the lawyers off their backs and all the costs are passed on to the consumers (i.e., you and I) in the form of higher prices.

A more recent example is a class action lawsuit settlement by Verizon Wireless. The settlement includes 25 free minutes and all legal fees and expenses. I’m not even sure what the lawsuit is about and frankly, I don’t care. While a team of lawyers get paid on my behalf (I am a Verizon Wireless customer), I get 25 free minutes. Big freakin’ deal. I have a plan that includes 1000 minutes a month and I use about 600 minutes at a cost of $150 per month. For you math wizards, the settlement equates to about $2.33 worth of minutes to me, and $6 million to the Cincinnati law firm that so graciously filed this lawsuit on my behalf.

But it doesn’t end there. These class action lawsuits are litigated in courthouses paid by tax dollars. They take up the time of judges, court clerks and numerous other public servants that are required to facilitate these cases in our judicial system. So that 40 free minutes from the Verizon class action suit ends up costing me much more than $2.33.

Although my wife revels in the thought of free bananas and 25 free cell phone minutes that she will not use, I would like to make a motion that we start a petition to pass a law that any class action suit involving bananas, zucchini, Cabbage Patch Dolls, lawn mower horsepower claims, wireless phone minutes or any other stupid stuff that only makes lawyers rich and clogs up our court system should be only litigated under the following circumstances:

• Any settlement offer should include all court costs so the taxpayers don’t have to subsidize this “support your local attorney” class action lawsuit program
• Only lawyers directly affected by or contacted by a consumer can file a class action lawsuit
• The lawyers that file the class action lawsuit should only receive what the consumer receives in the settlement
• Cases that don’t involve death, dismemberment, disease or debilitating injuries should be tossed out of court along with the lawyers who file them.

And I mean literally.

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Randy Hartless is Executive Director of the Parker Area Chamber of Commerce, columnist and regular contributor on KLPZ 1380am.