Opinion ID: 2630496
Heading Depth: 2
Heading Rank: 1

Heading: Class Action Waiver

Text: ¶ 37 This issue was largely, but not entirely, decided by Scott. Scott, 160 Wash.2d at 847, 161 P.3d 1000. In Scott, we held that a class action waiver in an arbitration agreement was substantively unconscionable. Id. In so holding, we relied on several crucial facts. First, the individual claims at issue were very small (between $1 and around $45 per month), but the plaintiffs alleged that in the aggregate, Cingular had overcharged the public very large sums of money. Id. at 847-48, 161 P.3d 1000. We found that without class action suits, the public's ability to act as private attorneys general, as intended in the Consumer Protection Act, was eviscerated. Id. at 854, 161 P.3d 1000. We therefore concluded the class action waiver was unconscionably in violation of public policy. Id. ¶ 38 We also found the agreement substantively unconscionable because it effectively, if not explicitly, exculpated Cingular for potentially widespread misconduct. Id. at 855, 161 P.3d 1000. We found that when wrongs are small but widespread, class actions are often the only effective way to address them. Id. We rejected Cingular's argument that relief was practically available because it promised to pay the costs of individual arbitration and because attorney fees could be awarded to the prevailing party. Id. at 856, 161 P.3d 1000. We cited the evidence that no attorney would be willing to undertake individual arbitration to recover the trivial amounts of money at stake in an individual claim. Id. We also noted that small claims court was not an effective remedy because the amounts at issue were too small to be worth the time and energy, let alone the nominal filing fee. Id. We were concerned that without class actions, many consumers might not even know they had a claim. Id. at 855, 161 P.3d 1000. ¶ 39 As in Scott, the contract now before us is a contract for consumer services, and the individual claims here are extremely small, under $2 per month. Without access to class-wide relief, competent counsel would not be available to redress many meritorious claims. See CP at 566-69. The agreement allows for small claims court actions, but even the availability of small claims court or low-cost arbitration does not make it practicable for an individual to pursue such small amounts. See Scott, 160 Wash.2d at 855-56, 161 P.3d 1000. Indeed, this agreement is less favorable to consumers than the one we struck down in Scott. Cingular's agreement at issue in Scott provided that Cingular would pay the attorney fees for a prevailing consumer. Id. at 856, 161 P.3d 1000. Here, not only does AT & T not pay the consumer's attorney fees, the agreement prohibits the arbitrator from awarding them unless specifically provided for in a statute. Because the class action waiver in this case is not meaningfully different from the one we held substantively unconscionable in Scott, we hold that the class action waiver in the AT & T agreement before us is unconscionable. [12]