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Whether you’re aware of it or not, there’s a good chance your contract-enforcing wireless provider is doing one of the following: throttling data speeds, charging you a vaguely worded additional fee for no actual service, or both.
To most users, however, slowed data speeds after three gigabytes of use and 60-cent charges hardly seem punitive. They’re a negligible inconvenience, forgiven frequently enough to be repeated on a monthly basis. But their subtlety can speak volumes, and Ben Kinney wants consumers across the country to listen.
Kinney is the founder of CrowdSuit, a platform that allows users to crowdsource litigation. Consumers suspicious of their cell-phone company’s practices can find similar user claims, joining a “crowdsuit,” or a lawsuit proposed by a collective of consumers interested in pursuing legal retribution for a common cause.
Theoretically, consumers who feel wronged should have the option to participate in a class action against the company. But some wireless services, such as AT&T, preclude them from doing so with clauses buried deep in their often labyrinthine contracts. For users bound to these contracts, CrowdSuit aims to provide a viable, free alternative.
“A couple of years ago I was in law school taking a class on complex litigation. One of the big cases we read was a recent Supreme Court case called AT&T v. Concepcion. What that case basically said was that mandatory arbitration and class-action waivers are valid in [AT&T’s] consumer contracts,” Kinney said.
“Big corporations have seen how effective these class-action waivers are at insulating themselves from liability,” he continued. “You don't have to look too hard to see that this is true. In recent years, almost every consumer, employment, and merchant contract contains these clauses. Many attorneys have described the clauses as ‘virtually impossible’ to overcome.”
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The startup currently has five active crowdsuits, most of which focus on combatting “administrative fees” from AT&T, Verizon, Sprint, and T-Mobile. Users can join one of these crowdsuits, thus assigning their claim to the startup and freeing themselves of legal and financial responsibility. CrowdSuit then brings suit against the company without involving the individuals or breaking their contracts’ class-action waivers.
“CrowdSuit gets around the class waivers by collecting claim assignments instead of joining people together as a class,” Kinney said. “Legal claims can be treated like personal property and just like other personal property they can be given away through a legal tool called assignment....What that means is that the claim becomes CrowdSuit's claim. In this way, CrowdSuit can bring a suit on an individual basis (i.e., CrowdSuit v. Corporation), but with classlike damages.”
Individuals suspicious of their wireless provider’s activity can also suggest a crowdsuit, though its chances of being filed by CrowdSuit increase in direct proportion to the number of backers. “We don't need a minimum number of assignors to file a suit and we can continue to file more suits as claims come in. The more assignments the better chance we have at modifying corporate bad behavior.”
For every CrowdSuit victory, the startup keeps half of the settlement and donates the remainder to a charity or non-profit of its assignors’ collective choice, instead of sending a one- or two-dollar check to every would-be plaintiff. The assignors then receive a lower and (ostensibly) more transparent bill each month.
While it specializes in suits against cell-phone service companies, Kinney intends to open CrowdSuit to any type of company with a class-action waiver, which is a more common restriction than the average consumer might think.
“Xbox and Playstation have [class-action waivers] for users. Uber has them for drivers. American Express has them for merchants... CrowdSuit is interested in pursuing these cases and we will have our attorneys look into suggested claims,” he said.
The startup hasn’t sought funding, instead focusing on a self-sustaining revenue model built on consumer advocacy. “Currently, our focus is on collecting assignments and being successful in our lawsuits. We feel strongly that if we can do those two things, we can begin to modify corporate bad behavior and that is good news for everyone.”
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