Effective Class Action Ban May Devastate Consumer Protection
The Supreme Court faces yet another assault on state consumer protection efforts. This time, states are trying to protect the rights of consumers to organize class action lawsuits in order to fight unruly corporations with unfair practices. These corporations have tried to thwart consumer protection efforts by requiring that customers sign away their rights to access the courts and prohibit them from using class actions to vindicate their rights.
A class action lawsuit allows a group to file a claim collectively against a defendant. Often, the defendant has treated the group of individuals in the same way, for example, by using the same business practices. Class actions are most valuable where the individual claims of the group members are small, such that filing a claim individually is too costly. By pooling their claims, consumers can increase the value of their case, making it easier to finance and secure representation.
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