Arbitration

Alabama Woman wins $43,000 Judgment Against Car Dealership for Fraud and Wrongful Repossession

May 15, 2020 by Attorney Judson E Crump Leave a Comment

Final Judgment for the Plaintiff against Defendant Car Dealership in the amount of $43,840.54, plus court costs.

In March of 2016, my client went shopping for a car at Champion Automotive, a used car dealership in Mobile, Alabama. They told her she was approved, and took her $2,500 as a down payment for the vehicle. Unbeknownst to her, she was not actually approved by any finance company, and instead of canceling the contract and returning her money, they chose to repossess the vehicle and keep her down payment. Their stated reason for doing this was that she had signed a Spot Delivery Agreement, which said that if she wasn’t approved, they could charge her $50.00 per day. This Spot Delivery Agreement was the only document they provided her at the time of the sale, despite the fact that state and federal law require that the buyer get a copy of the loan contract at or before the time of the sale of the vehicle.

We sued them for fraud, wrongful repossession (a form of conversion), and violation of her rights under the UCC, as well as violation of the federal Truth in Lending Act. They fought tooth and nail to get the case thrown out of court. First they tried to compel arbitration, but failed because they had previously violated the AAA Consumer Rules of Arbitration, which were part of their own contract documents.

We took their deposition and discovered that even after the repossession, they never notified her in writing of any intended disposition of the vehicle. This is clear contravention of Alabama’s UCC Article 9, which states that “a secured party that disposes of collateral under Section 7-9A-610 shall send to [the debtor] … a reasonable authenticated notification of disposition.” Furthermore, they subsequently sold the vehicle to another purchaser for more than what my client owed them. This is also illegal, pursuant to Ala. Code 7-9A-616. We moved for summary judgment on both of these grounds, and we won.

Later, we filed a second motion for summary judgment on the remaining counts of the Complaint, which we also won. On October 25, 2019, the judge issued a judgment against the dealership for $43,840.54 plus court costs.

The case was Randi Joyce v. Nexcar, LLC d.b.a. “Champion Automotive,” Docket Number 02-CV-2016-901896.

Alabama Consumer Files Arbitration Case Against Debt Settlement Firm Boulder Legal Group, LLC – Alabama Consumer Rights Lawyer Judson E. Crump

September 12, 2018 by Attorney Judson E Crump 4 Comments

Boulder Legal Group, LLC is a Debt Settlement firm. A recent arbitration case was filed against them by an Alabama couple alleging that despite paying the debt settlement company thousands of dollars to settle some credit card debts, they were sued by Discover Bank and then abandoned by Boulder when they needed them most.

My clients hired this debt settlement company back in October of 2016 to help resolve some credit card debts. When they signed up with Boulder Legal Group, they were told that they would be protected from collection lawsuits, and that if any collection lawsuits were filed against them, the debt settlement firm would help defend them from the lawsuit. So they agreed and signed a contract, believing that Boulder Legal Group was a legitimate law firm who would actually defend them if their creditors sued them.

According to the Complaint, the couple made steady payments to this debt settlement firm for months, paying them well over $10,000. But sure enough, they were sued by Discover Bank for one of the credit cards that they had included in their debt settlement program. They notified the debt settlement company, and expected some legal defense. But no attorney ever appeared in the lawsuit or filed an answer for them. So a default judgment was entered against them for over $12,000. Soon after that, a garnishment was filed with the court for the garnishment of the husband’s wages. Neither Boulder Legal Group nor any attorney associated with them filed anything to stop the garnishment, to defend the lawsuit, or to prevent Discover from obtaining a judgment against them.

So they came to us. Like all predatory contracts, the agreement they signed with Boulder Legal Group contained a mandatory arbitration provision and class action waiver, which was designed to prevent consumers from getting their cases to court. We filed an arbitration case against Boulder Legal Group, the Law Offices of Camron Hoorfar (an attorney associated with Boulder), and Global Client Solutions, LLC (the payment processing company used by Boulder Legal Group).

The arbitration demand alleges that Boulder Legal Group and its attorneys committed legal malpractice by failing to provide any defense whatsoever when our clients were sued by Discover Bank. It also alleges that Global Client Solutions, LLC violated the Electronic Fund Transfers Act by failing to send written statements to our clients, which prevented them from ever seeing where their money was going.

If the arbitration is successful, we should be able to obtain a court judgment against this debt settlement company, putting a public record out there for the information of anyone else who may find trouble from this company.

Debt Settlement companies are almost always scams. I’ve never encountered one that has done a good job for their clients. As an attorney, I am disgusted by out-of-state lawyers who fool people into paying good money for what they believe to be bona fide legal representation. If you are considering hiring a debt settlement company, don’t. Talk to a real, local lawyer today.

Are you in the Equifax Data Breach? DO NOT sign up with their website!! – Alabama Credit Reporting Attorney Judson E. Crump

September 9, 2017 by Attorney Judson E Crump Leave a Comment

Equifaxsecurity2017.com was created by Equifax in response to the hack. But asking for their help requires you to waive your rights to sue them. Don’t fall for it.

When the news broke that Equifax had let the personal information of millions of Americans get stolen by hackers, the giant data company responded by rolling out a new website, equifaxsecurity2017.com, where people are supposed to be able to enter some basic information and determine if their information was exposed. But the website is a trojan horse: if you sign up for their help protecting yourself from their massive negligence, you have to waive your right to take them to court if it later turns out that they have wrecked your finances.

Attached to the “security” service is an Arbitration Agreement and Class Action waiver. As everyone knows, arbitration agreements are designed to ensure that no sort of fraud or deceit or illegal conduct will ever be exposed inside of a court room. Our radically business-friendly Supreme Court has upheld this sort of agreement, even in circumstances where they are grossly unfair and have worked huge injustices to working people.

Yeah.

So basically, when Equifax discovered that it had massively screwed up and put millions of Americans at big financial risk, their first thought wasn’t: “How do we fix this?”

It was: “How do we keep all of these people from coming after us for the damage we’ve caused?”

So they came up with a rather ingenious plan: “We’ll offer a free ‘security’ service and make it look like we’re trying to help, but when people enroll in the service, we’ll bury some nasty legal talk in the fine print that will prevent them from being able to take us to court.”

The definition of a Trojan Horse.

Don’t fall for it. You don’t need Equifax to tell you if you’ve been breached. If you’ve had a credit card, auto loan, or mortgage for more than a few years, you can pretty safely assume that you’re affected.

Buy an independent credit monitoring service and go ahead and send the credit bureaus a security freeze request. This will make it hard for anyone to open fraudulent accounts or debts in your name without personally being present with proof of ID.

And go ahead and reset those passwords.

Chuck Stevens Chevrolet Found Liable for Defrauding Alabama Woman – Consumer Rights Attorney Judson E. Crump

June 13, 2017 by Attorney Judson E Crump 1 Comment

Chuck Stevens Chevrolet of Atmore, Inc. sold Tamie Shufford a car that had about 1,000 more miles on it than they certified in their sale contract.

Their salesman told her the car was new and had only 67 miles on it. The paperwork and the odometer disclosure forms said the same thing. But as it turned out, the car had been previously sold to another woman. For some reason, that deal was later canceled, so Chuck Stevens then turned around and sold the car to Ms. Shufford, stating that it was still new and that it still had 67 miles on it.

She complained to the Alabama Attorney General’s Office and wrote Chuck Stevens asking for a partial refund, but they didn’t offer her any relief. They said that “This vehicle was contracted for sale to another person; however the financing never took place so the sale was reversed. Ms. Shufford was sold a new car…”

So we sued them under the Motor Vehicle Information and Cost Savings Act, a federal law that requires dealers to execute title transfer and mileage disclosure paperwork clearly and accurately. The matter went to arbitration, and the previous buyer of the vehicle came forward to testify that she not only had in fact taken the vehicle home and driven it for a few days, but that she had taken it on a trip to Tampa, Florida! Which would have meant that the odometer disclosures written in Ms. Shufford’s contract were off by about a thousand miles.

At the arbitration, Chuck Stevens had its employees and former employees testify that these sorts of deals were “common” in the industry. Their excuse for “forgetting” that the vehicle’s odometer reading was off by a thousand miles was that their computer system didn’t fix it for them.

The arbitrator wasn’t buying it. He found that:

The Respondent had knowledge that the vehicle had been operated to some extent by Ms. (redacted) and had the vehicle in its possession for a least a couple of weeks prior to the sale to the Claimant. It could have easily checked the “cumulative mileage registered on the odometer” as required by the MVICSA…the Respondent was at least grossly negligent or acted with disregard of the truth.”

Which was, of course, exactly what happened.

The Motor Vehicle Information and Cost Savings Act has a minimum penalty of $10,000 if a dealer violates it with intent to defraud, as Chuck Stevens was found to have done here. So the arbitrator awarded a judgment for that amount, plus $3,333 for attorneys’ fees. And Chuck Stevens also had to pay $2,200 for arbitration administration fees and $1,500 for arbitrator compensation.

Now, car dealers usually love arbitration because it keeps these sorts of lawsuits from getting before a jury. But this time, the dealer found itself on the losing end of its own arbitration clause. And here’s the beautiful part: once Chuck Stevens was faced with the consequences of its decision to use mandatory arbitration clauses, did they honor the arbitrator’s decision? No. They didn’t. Guess where they went?

To the public court system! The very court system that arbitration is designed to avoid!

Yes, they filed this gem of a motion: Chuck Stevens Wants A Re-Do After it Loses Arbitration

The motion asked the Escambia County Circuit Judge to overturn the arbitrator’s decision. Their motion basically said that since the arbitrator made the (in their opinion) wrong decision, they should give them another shot.

Believe me, as a lawyer who’s been on the losing end of arbitration before, I feel their pain. But, tough shit. It’s nearly impossible to overturn an arbitration award in Alabama (and, honestly, in most places in the USA), and this case was no exception. The statute authorizes an award of $10,000 plus a reasonable lawyer’s fee if the defendant violates the MVICSA statute with intent to defraud. The arbitrator found they’d violated it with intent to defraud and gave us exactly what the statute said.

Unsurprisingly, the Circuit Court flatly rejected Chuck Stevens’ argument, and entered this order: Judge Rejects Chuck Stevens’ Request to Overturn Arbitration Decision.

So now it’s official: Chuck Stevens Chevrolet of Atmore, Inc. has been found liable for violating its customer’s rights, and they’re going to have to pay.

Sure, arbitration is something that is used often to unfairly keep defrauded customers out of court, but in the right type of case, you can still get a fair result.

If you’ve been defrauded by a business who has stuck you with mandatory arbitration, don’t despair. Call an experienced fraud arbitration lawyer to discuss your legal rights.

NOTE: These recoveries and testimonials are not an indication of future results. Every case is different, and regardless of what friends, family, or other individuals may say about what a case is worth, each case must be evaluated on its own facts and circumstances as they apply to the law. The valuation of a case depends on the facts, the injuries, the jurisdiction, the venue, the witnesses, the parties, and the testimony, among other factors. Furthermore, no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers.

Fine Print Explained: Car Sale Contracts, Part 2 – Alabama Consumer Rights Attorney Judson E. Crump

May 30, 2017 by Attorney Judson E Crump 2 Comments

Deciphering Car Sale Contracts, Continued.

If you haven’t read the first part of this article, you should read it here.

Today we look at all that fine print on the back side of your car sale contract, and figure out what it all means.

XI. Finance Charge and Payments. Ripoff Rating: 1/10. You promise to make your payments, they charge late fees, they credit your payments to interest first and then principal. What you’d expect. No big deal.

XII. Misc. Promises by You. Ripoff Rating: 2/10. You still have to pay if you crash, lose, or damage the car. You promise not to deliberately abuse the car. You promise not to drive it outside the US or Canada or sell or lease it to someone else. They get a lien on the vehicle and you have to keep it insured against damage – beyond your normal liability insurance. 2 Ripoff points for not letting you drive to Tijuana.

XIII. Default Remedies. Ripoff Rating: 6/10. If you miss a payment or let your insurance lapse, then they can do lots of bad things to you. They can take the car, they can sue you and demand attorneys’ fees as well, they will charge you storage fees for the stuff that was in the car when they repo’d it. They will charge you late fees, they will cancel your service contracts and keep the refund. What is not in here? A grace period. So if your payment is one day late, they can take the car, dump it at auction for a way-too-low price, and sue you for the balance plus court costs and lawyer fees.

XIV. Warranty Disclaimer. Ripoff Rating: 8/10. They do not stand behind their product. In the old days, it was assumed that if a product broke down or didn’t do what it was supposed to do, you could take it back for a refund or replacement. In fact, that’s just what happens if you buy a coffeemaker from Wal-Mart that is malfunctional. But car dealers don’t offer Wal-Mart’s level of customer service.

If the wheels fall off when you drive off the lot, you can’t do anything about it. Even if they swore to you that it was a 1-ton diesel capable of hauling a 36′ Contender to Miami and back. You’re stuck with the lemon. And the lemon law does not apply to used cars. This does not affect manufacturer’s warranties.

XV. Window Sticker Rule. Ripoff Rating: 0/10. The Federal Trade Commission requires all used cars to have a window sticker showing basic info about the vehicle and any warranties that go along with it. The law also requires that sticker’s terms to be part of the contract. Trust me, if it wasn’t required by Big Government Regulation, dealers wouldn’t do it, because that regulation is designed to help you, the buyer, not get screwed.

XVI. Robocall Consent. Ripoff Rating: 3/10. They can call you with robotic telephones to annoy you when they want some money.

XVII. Choice of Law Provision. Ripoff Rating: 0/10. Alabama law applies to contracts written in Alabama. Common sense.

XVIII. Holder Rule Notice. Ripoff Rating: 0/10. When the contract is sold to a finance company, you can sue that finance company for any fraud or breach of contract that the dealer committed. This is to defeat the old common law “holder in due course” doctrine, which was a legal loophole by which a scammer could deceive someone into signing a contract for money payments, then assign that contract and flee to Mexico. The finance company could then pretend to not know about the fraud and sue you for the payments on a fraudulently obtained contract. Today, you can’t do that because dealers have to include the Holder Rule Notice in these contracts. Like most other clauses that provide the buyer with some rights, this one is only in the contract because it is required by a Big Government federal regulation.

XIV. Arbitration Clause. Ripoff Rating: 10/10. This says that if they deceive you, sell a dangerous product, overcharge you, and steal your money, you can’t take them to court. Instead, you have to go through a private, pseudo-legal proceeding called Arbitration. Your case will be decided by a random corporate lawyer. There is a 90% chance the arbitrator will be an older white male who has spent the past 20 years defending corporations like the one that ripped you off. The rules of evidence don’t apply. You can’t compel them to produce documents or evidence that they don’t want to produce. You can’t make them sit down and tell you their side of the story. No jury. No judge. No appeal if the arbitrator sleeps through the proceeding and then issues a ruling against you that is utterly baseless in the law and ignores all of the evidence. You can’t join up with other people who’ve been similarly ripped off and file a joint lawsuit, or any sort of class action. In other words, no matter how bad or deceitful the dealer’s conduct, and no matter how much you were harmed, your legal remedies are cut in half, if that.

Forced Arbitration: The King of Bad Deals.

It’s unavoidable nowadays, because the U.S. Supreme Court (even “liberal” justices like Breyer) are mostly former corporate lawyers who’ve never represented an ordinary working person in their entire lives, and they live in a bubble that protects them from having any clue about what life is like for the 99% of us who live in the modern American economy. But that’s life. At least for now. Maybe Trump will lose in 2020 and we’ll have a good president who will get to appoint 3 justices who care about working folks.

As bad as some of these terms are for consumers like you and me, I hope this at least illuminates the nature of these contracts. The more you know, the more you can protect yourself.

Fine Print Explained: Car Sale Contracts – Alabama Consumer Rights Attorney Judson E. Crump

May 22, 2017 by Attorney Judson E Crump 2 Comments

Ever wonder what all that fine print in your car purchase contract means? Here’s a basic explanation. Warning: when you are done reading this, you will learn that you have been screwed before.

If you’re like most people, when you want to buy something or enter into some sort of deal, you get presented with some massive, multiple page form contract filled with fine print and unintelligible words and phrases. Fine print contracts of adhesion are everywhere. We’re used to them. If you don’t live on a farm in the woods with no sort of insurance or communication services and get around on horseback, then you’re stuck with hundreds of them every year. And since they’re not only mandatory but also basically indecipherable, you probably don’t bother reading them.

But in case you’re curious just what exactly you’re agreeing to, here it is:

I. The Basic Sale Language. Ripoff Rating: 0/10. – This identifies the parties and the goods being sold. Real simple, and very necessary.

The beginning of a typical sale contract.

II. The TILA Box. Ripoff Rating: 0/10. The Truth in Lending Act requires the seller to not only state the price of the goods, but also the cost of any credit charges associated with the transaction. They also must itemize every charge that was financed. This is also very necessary, because without it you wouldn’t know what you were paying and why.

The Truth in Lending Act Box. This is where finance charges, fees, and dealer add-ons are listed. Read it carefully.

ALWAYS examine this box thoroughly, because most of the charges here are entirely optional. This is where they have to list any doc fees, credit life or disability insurance premiums, GAP insurance premiums, service contracts, extended warranties, etc. There are two important things to know about these charges:

You cannot be required to purchase these things. If you see them on your contract and you don’t want to waste thousands of dollars that you don’t have to spend, you can and should ask the dealer to rewrite the contract to remove everything but doc fees and Tag/Title fees, which are $16.50 in Alabama.
You are being overcharged for these things. Dealers add hundreds of dollars to the prices of these extras and pocket the money. For instance, if a GM extended warranty costs $1,000, the dealer won’t tell you that, but will just write it up with a cost of $1,500. The dealer gets to keep the difference, while you’re paying that money back with interest. This used to be considered fraud, but our super-conservative AL supreme court decided in the 1990s to let dealers off the hook. It remains a huge profit source for them.

That concludes the part of your contract that is actually useful and necessary. Everything else is utterly worthless to you as a buyer, and is designed solely to give the dealer more money and privileges while depriving you of as many rights as the law allows. This isn’t hyperbole. It’s life in the modern American economy in a conservative state.

III. GAP Contract Box. Ripoff Rating: 3/10. This is where you can agree to pay extra money to the dealer for a virtually worthless service. I don’t care what the salesman tells you. It’s a ripoff.

Sign if you want to donate money to your car dealer and get almost nothing in return.

IV. No Cooling Off Period. Ripoff Rating: 3/10. Pretty Self-Explanatory. Once the deal is signed, you can’t bring it back, even if the salesman promises otherwise.

No Cooling Off Period. You can’t bring the car back and cancel the deal, even 5 seconds after you sign the paperwork.

V. Interest Rate Skimming Notice. Ripoff Rating – 7/10. This short little disclaimer warns you that the interest rate on your contract is probably higher than the interest rate that the finance company was going to charge you. How does this work? Easy. You fill out a credit application at the dealership. They send it to multiple finance companes to “find you the best deal.” They get a few responses almost instantly, based on your credit, income, and other information. Bank A says they’ll finance the deal at a minimum of 8% APR, with a monthly payment not to exceed $300. Bank B says they’ll finance the deal at a minimum 8.5% APR, with a monthly payment not to exceed $350. The dealer says, “You’ve got some problems on your credit, but we worked hard and pulled a few strings and got you approved at $325/month with Bank B. That’s a good deal, buddy.” Not knowing any better, you agree, and they fill out a contract with an interest rate of 12.75%. They didn’t tell you that Bank A would have financed the deal at 8% with a monthly payment of $287. And this little 2-liner lets them off the hook if you later discover that they were lying to you.

The Interest Rate Overcharge Notice. If the dealer can convince you to pay more interest rate than the finance company requires, then they get to keep the bonus money.

VI. Merger Clause. Ripoff Rating: 7/10. This says that the paperwork is the entire deal. Sounds innocuous, right? But what it means in the courts is that nothing anyone told you matters at all once you sign this contract. So the salesman could promise 38 mpg mileage, that the car has 266 HP, that it’s never been wrecked, that you can bring it back tomorrow if you don’t like it, that the financing you got was the best they could find, or basically anything else, and even if he is lying through his teeth, you can’t do anything about it.

This says that the salesman can deliberately deceive you and you can’t do anything about it. Also, if you are 3 days late on a payment and the finance company says they won’t repo it if you wire them the money today, they can still repo it.

It also is designed to get finance companies off the hook if they promise to let you make a payment 2 days late, accept the payment, and then repo the car anyway.

VIII. Read-This-Contract Notice. Ripoff rating: 4/10. This is legally mandated warning that you should read this contract before you sign it. By signing it, you are basically saying that you read the whole thing and understood it, even though that’s obviously false for 90% of the American public. You’ll be held to this if you ever make it to court. It also incorporates any arbitration agreement that may be attached to this deal. Which accounts for its ripoff rating.

IX. Optional Insurance Box. Ripoff Rating: 4/10. If you were conned into buying some credit life or disability insurance, this is where you sign to agree to it. Please don’t sign it. If you’re just feeling generous, give your money to a charity instead. Or go out to eat and leave a good tip.

Another optional donation to your car dealer.

X. Assignment Block. Ripoff Rating: 0/10. This is where they write the name of whatever finance company they sell the contract to. No big deal. It doesn’t change the terms of the deal in any way.

They can sell your contract to a finance company. No big deal.

That concludes our analysis of the first page of a typical retail installment purchase agreement for a motor vehicle in Alabama. Next, we’ll talk about the back of the contract.

Virginia College = Scum – Alabama Consumer Rights Attorney Judson E. Crump

March 9, 2017 by Attorney Judson E Crump 1 Comment

Thinking About Enrolling at Virginia College?
DON’T!

Usually I’m pretty upbeat about my law practice. I get to represent real people with real world problems. I don’t have billing hour requirements. My clients are always very grateful for my work. I set my own hours and take or turn down whatever cases I want to. But there is a downside. Want to know the worst thing about being a consumer rights lawyer in America in 2017? It’s this:

Seeing people who have been totally screwed and having to tell them there is nothing they can do about it.

That is the worst part of my practice. And it happens all the time.

-ALL- the time.

At least 5 times a week I get a phone call, an email, a website inquiry, or a personal meeting with a person who is interested in hiring me, who has a legitimate gripe against some person or business who’s taken their money or ruined their credit or intruded into their financial privacy, or something like that. And they bring me a contract to look over that they’ve signed. And sure enough, it’s a long, unintelligible, fine-printed mess that Rumplestiltskin would be proud of. No matter how unfair a contract is, it will almost always be upheld by our courts. This wasn’t always the case, but we have had an very conservative Supreme Court for the past 30 years now, so the law has changed.

So latest nastily lopsided contract I saw came from a young woman who wanted one thing: a better job. She had seen some advertisements from a legitimate-looking college called “Virginia College.” Sure sounds legit, right? Don’t snicker or chuckle here. If you’re younger than 20 and don’t come from a family of college grads, you’d be fooled too. So she wanted to be a pharmacy technician, and Virginia College told her they could get her there.

Needless to say, they didn’t. Even though she got excellent grades on all her tests. When she went to find a job, she discovered that the “education” she’d received was basically worthless.

That’s because Virginia College is no more a college than the Salvation Army is an army. They call their facility a “campus” and they call the manager of that facility a “dean,” but those labels are designed, like everything else at these for-profit “colleges,” to bolster the facade of legitimacy. Because for-profit colleges don’t exist to actually provide education. They merely pretend to provide education in order to take advantage of the gigantic government handouts of the federal student loan program. They’re taking billions of dollars of taxpayer money that is intended to pay for real education, and leaving the debt – which can’t be discharged in the bankruptcies that their students inevitably file when they can’t find a job – on the poor students who fell for their scams.

Now here’s the real kicker: we can tell how bad Virginia College is screwing its “students” without even setting foot on their “campus.” All we have to do is look at the enrollment agreement you have to sign to get there. It’s attached, and you can read it for yourself here:

Enrollment Agreement -Virginia College

Here are a few highlights:

Arbitration Clause. This prohibits you from ever taking them to court if they have defrauded you or failed to provide you with the services you paid for. It ensures that if you do make a complaint against them, the best you get is a biased hearing and, in the off-chance that they lose, they get to keep it secret, so other people who find themselves in your position don’t get to see your suit against them in any public record. See Paragraph 10.

Class Action Waiver. You can’t sue them, or even participate in a class action case against them. Ever. This is a get-out-of-jail free card for any corporation that steals, as long as they steal small amounts of money from large numbers of people. That’s not hyperbole. AT&T Mobility v. Concepcion (U.S. 2011). See Paragraph 10.

One Way Attorneys’ Fees. So if you sue them and you lose, you have to pay their lawyers’ fees. If they sue you and you lose, you have to pay their attorneys’ fees. If they sue you and lose, they don’t have to pay your fees. If you sue them and win, they don’t have to pay your attorneys’ fees. Paragraph 15.

Liquidated Damages. So if they defraud you into wasting 2 years of your life in their worthless programs and taking on $25,000 of bankruptcy-proof student loan debt at 6% interest, and you take them to court and prove all that, the most you can get is your tuition. None of the costs of actually going to school, none of the time you wasted there. And it gets worse: it goes to your student loan company instead, but doesn’t cancel the debt because it doesn’t pay the interest! So if you can find a free lawyer and win, you still lose money! Paragraph 14.

Integration Clause. Paragraph 16. This lets their salespeople and “deans” and “professors” lie to your face, and prevents you from doing anything about it if their lies are contradicted by the fine print in this contract, or something in the massive handbook referred to in this contract. Even if you have them tape-recorded making a demonstrably false statement, you can’t do anything about it. At least, not in Alabama.

Non-Transferability of Credits Acknowledgement. Paragraph 8 basically says that “we aren’t a real college, so the credits we award you probably won’t be recognized by any legitimate educational institution.” This should be a warning sign to you.

It’s almost comical. Almost. Because this sort of crap used to be illegal. In the old days, courts wouldn’t enforce such totally unfair stuff. But not anymore. These businesses make a ton of money. And they don’t earn it by producing a quality product. They earn it by trickery, and by preying on the dreams of good people. But since they do make money, they can pay politicians to write laws that shield them from liability for their own misconduct. They can pay the justices of the Alabama Supreme Court to keep them from ever having to repay people they’ve defrauded. They can pay for advertising campaigns that distribute propaganda to voters so we’ll think that if we don’t keep the government boot on working people, our economy will collapse and all of our jobs will disappear. And it works. It’s working great. The propaganda has been a massive success.

Alabama Supreme Court Continues to Harm Working People for the Benefit of Wealthy Corporations – Alabama Consumer Rights Advocate Judson E. Crump

March 4, 2017 by Attorney Judson E Crump 1 Comment

The Alabama Supreme Court Hates Working People and Loves Big Corporations. Here’s Yet Another Example.

On June 26, 2015, the Alabama Supreme Court issued a decision in the case of American Bankers Insurance Company of Florida v. Gladys Tellis. Now, for those of us who have been living for a while under the extreme anti-consumer regime of the current Alabama Supreme Court, the outcome of such a case can be predicted just by its name. American Bankers Insurance Company (a huge and rich insurance company) against a lady named Gladys Tellis (an ordinary woman seeking justice after she’d been defrauded). Whenever a big company is sued by a worker or consumer or anyone who isn’t also a big powerful corporation, the Alabama Supreme Court, whose 9 Republican Justices were elected with millions of campaign dollars paid for by those very banks and insurance companies, is almost certain to find a way to rule against the working man. So this case was no exception: they handed down a decision that dealt yet another blow to regular people seeking justice.

In this case, the issue before the Court was whether the insurance company could enforce a mandatory arbitration agreement against the Plaintiffs in that case. Normally, arbitration agreements are enforced due to a federal law called the Federal Arbitration Act, which since a major US Supreme Court misreading of that statute in 1995, has basically been applied to every contract in the United States. Note here that though I’m complaining in this article about the extreme pro-corporation bias of the Republican Alabama Supreme Court, in the Allied Bruce Terminix case of 1995, the U.S. Supreme Court’s anti-consumer decision was a 7-2 decision, where the only justices who rightfully dissented were the most conservative members of the Court: Scalia and Thomas -both Republican appointees. So don’t think for a minute that I’m just against Republican judes. I’m not. I’m against judges who are biased against workers, the poor, and those who have been done wrong by the rich and the powerful

So enforcing mandatory arbitration agreements, no matter how Rumplestiltskinian they may be, is commonplace in the United States. Why does this matter? Because arbitration is a grossly unfair proceeding that deprives people of many, many rights that they are supposed to be guaranteed by the Constitution: the right to join together with other people in lawsuits (not just in class actions, but even cases where a handful of friends have been screwed in the same way by the same company), the right to a trial by jury, the right to obtain evidence in their favor that is held by the other side, and, most importantly, the right to appeal a decision that is flat-out wrong.

But in this case, the Plaintiffs had a solid defense to the arbitration agreement in question: they never signed it.

Now anybody with common sense can understand the issue: if you don’t sign it, it isn’t binding. That’s the normal rule. Certainly the opposite rule applies: if you sign a contract, it is binding, right? And of course, the latter rule has always been enforced by our courts. And what’s good for the goose is good for the gander, right?

Not in Alabama.

Somehow, the Alabama Supreme Court found a way around the common sense rule that only contracts you actually agree to can be held against you. They said that by paying premiums, the insurance company’s customers implicitly consented to the arbitration agreement. This is crazy. The only explanation, of course, is that these judges were just looking for any excuse to help out their corporate sponsors, and they did so at the expense of all of Alabama’s citizens.

This is what happens when we allow our highest court to be sold to the highest bidder. It is literally justice for sale. That is a very evil phenomenon, and the worst part of it is this: our voters don’t care. Because this is a conservative state, and the millions of dollars of insurance company money floods our televisions, radios, billboards, and emails with false messages that if we don’t elect these extreme Republican justices, then our state will descend into crime and chaos.

Until people start caring about protecting their rights, this is going to continue. We are going to keep losing, and our citizens are going to continue to be screwed by big out-of-state companies that don’t care about Alabama.

Finally, I’d like to mention one thing that should be remembered. There was, at that time, at least one ray of hope on the Supreme Court: Chief Justice Roy Moore. Many people criticize him for his popular image in the media of being a crazy conservative, but the truth is that while he was on the bench, he was the only justice that actually cared about doing justice for ordinary people who had been defrauded or harmed by the rich and the powerful. In the Tellis case, he wrote a powerful and eloquen dissent explaining just how important the right to trial by jury is, and he saw right through the majority opinion to show just what is happeneing in cases like this: the victims of fraud are excluded from the courthouse. They have lost their constitutional rights and are forced into an arbitration system that makes a mockery of justice.

Unfortunately, even that ray of hope has been extinguished, as Justice Moore was removed from the bench for his stance in defense of traditional marriage.

The full opinion in the Tellis case can be found here:

American Bankers Insurance v. Tellis

Scalia’s Last Betrayal: AT&T Mobility v. Concepcion – Brokenhearted Catholic Lawyer Judson E. Crump

February 27, 2017 by Attorney Judson E Crump 3 Comments

January 18, 1995:

JUSTICE THOMAS, with whom JUSTICE SCALIA joins, dissenting.

I disagree with the majority at the threshold of this case, and so I do not reach the question that it decides. In my view, the Federal Arbitration Act (FAA) does not apply in state courts. I respectfully dissent.

Allied Bruce Terminix v. Dobson.

April 28, 2011:

JUSTICE SCALIA delivered the opinion of the Court.

…

We have described this provision as reflecting both a “liberal federal policy favoring arbitration,” Moses H. Cone, supra, at 24, and the “fundamental principle that arbitration is a matter of contract.”

AT&T Mobility v. Concepcion.

One of these statements was made by an honest intellect dedicated to restraining federal power within its original constititutional limits. The other was made by a dishonest intellect searching for an excuse to rule for the side he liked the best.

Yet both statements were made, or at least agreed to, by the late Justice Antonin Scalia. What happened during those 16 intervening years? Did he change his mind? Did his brain wither and grow feeble? Was he just tired of fighting the overreach of federal power and decided that, “if you can’t beat ’em, join ’em?” Did he just have different clerks that ghostwrote his opinions for him?

Any of these things may be possible, but they’re all disturbing. And the result can’t be denied. The man who at one time stood constant as a stone for his originalist devotion to the founding fathers’ vision, became somehow more malleable, more willing to compromise his former values, and eventually able to completely reverse course and make a decision that would ultimately do great harm to millions of Americans.

Go ahead and read the actual opinions and you’ll see exactly what I’m talking about.

The Terminix decision is famous because it took the old Federal Arbitration Act (which had largely lain dormant from disuse for many years) and expanded it to say not only that arbitration agreements were enforceable like any other contract (which is what the FAA actually says), but also that it is illegal for any state to enact any law limiting arbitration. In politics, you often hear people talk about “states’ rights.” And at one time, Justice Antonin Scalia cared about “states’ rights.” Case in point: Allied-Bruce Terminix.

Though the SCOTUS wasn’t able to predict it at the time, their Terminix decision created a tidal wave of fine-print arbitration clauses being inserted into every business dealing that the average person enters into in their lives: Want to have internet? You’re stuck with arbitration. A car? Arbitration. Want to work for a large company? Arbitration. Want a bank account? Arbitration. Credit card? Arbitration.

Time would eventually teach us that this explosion of arbitration was really, really bad for ordinary people, because it allowed big businesses to get away with negligence, theft, or even outright fraud and never be taken to court over it. So the “liberal” justices later decided to change their tune on arbitration. Once they realized that it was being used to screw over ordinary people, they started ruling against it. Sure, that’s not intellectually consistent, but liberals justices tend to care a lot less about upsetting precedent. It’s what they’re all about, in fact. Judicial activism is the whole problem that most conservatives have with the Supreme Court’s democrat appointees.

But as with so many other things in American civics nowadays, what matters more than principle is what side you’re on. And so we came, eventually, down to AT&T Mobility v. Concepcion. In this case, the cell phone carrier falsely advertised free phones, but they were charging people sales taxes on a “free phone.” Since 5% of $0.00 is $0.00, I don’t understand how that’s possible, but hey, that was what they were doing. Naturally, they got sued in a class action.

But AT&T had slipped a no-class-action ban into its arbitration contract. Meaning that if you wanted to sue AT&T for its $5.00 overcharge, you’d have to hire a lawyer and make your own lawsuit.

Obviously, this is never going to happen, which means that enforcing such agreements is basically legalizing frauds that are too small to hire a lawyer for. 4 of the justices realized this and said “No, you can’t do that sort of Rumplestiltskin crap. This is America. If you rip 10,000 people off for $5.00 each, you can be taken to court for $50,000.”

But the 5 Republicans said otherwise. They couch it in much more elegant English and make a few excuses (“class arbitration greatly increases risks to defendants” etc.) but ultimately uphold the fantasy that arbitration is fair, even when it basically leaves consumers with no recourse whatsoever to small wrongdoings.

Of course, much has been written of the unfairness of arbitration elsewhere, so there’s no need to re-write those books here.

My concern here is with Scalia, and particularly how he slowly quit fighting federal power. How, when faced with cases where the litigants (big businesses) who supported his “team” (the Republican Party) found themselves asking for the expansion of federal power, he lost his principles. He just gave up. Unlike his friend, Justice Thomas.

When Scalia died, I heard a lot of mourning, especially from fellow Catholics, about how this justice was a principled, stoic man, a force for good, and a consistent defender of the rights of those fighting federal power. Maybe with cases involving religion or abortion, he was, even during the last decade of his life. But not when the power of Uncle Sam was stretched out to protect his favorites. The record is clear.

Congress Can’t Do Anything, But They Still Find Time to Protect Big Banks – Alabama Consumer Finance Attorney Judson E. Crump

July 11, 2016 by Attorney Judson E Crump Leave a Comment

The U.S. House of Representatives Recently Passed a Bill to Help Large Financial Institutions Get Away with Ripping Off Their Customers.

It’s called the “Financial Services and General Government Appropriations Act,” and its current bill number is H.R.5485. Why does it matter? A little backstory is needed. Back in 2009, before people had forgotten just how bad the Subprime Mortgage Meltdown was, Congress passed a law called the Dodd-Frank Wall Street Reform and Consumer Protection Act. Unlike a great many laws passed by Congress (like, for instance, the comically named “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” which did nothing to either prevent bankruptcy abuse nor protect consumers), the Dodd-Frank Act really did try to reform Wall Street and protect consumers. Whether it succeeds will take some time to figure out.

One of the cornerstones of Dodd-Frank’s protections was the Consumer Financial Protection Bureau, which was authorized to regulate banks and financial institutions in certain ways. One of those authorized regulatory powers was the ability to restrict the use of forced arbitration.

As I and many others have explained before, forced arbitration sucks for a lot of reasons, because it is usually biased in favor of big corporations and if you get stuck with a bad or even a crazy decision, you cannot appeal it.

Of course, people who have done bad things generally don’t like having to pay for them, so big businesses who deal with lots of consumers love arbitration. Lots of corporations stick arbitration clauses in their massive 30 page contracts, even for things as seemingly minor as a cable subscription or cell phone purchase. Most arbitration clauses prohibit you from joining in or filing a class action lawsuit. So if a cable company overcharges 200,000 customers by $25 each, then they’ve stolen $5 Million, and they should have to pay it back, right? Most people believe so. But arbitration lets them get away with small frauds and ripoffs, because nobody is going to hire a lawyer and file a lawsuit for $25. Since the arbitration clause prevents these people from all joining together, the cable company just gets away. If a human steals $5 Million, you go to jail. If a big business steals $5,000,000, they just need to make sure they have an arbitration agreement with everyone they stole from.

This is ridiculous, so the CFPB recently issued a regulation to prohibit financial institutions from being able to do exactly that. Naturally, the banks kicked and screamed and called their pets in Congress to block the CFPB from implementing this common-sense rule. Unsurprisingly, the House of Representatives gave them exactly what they asked for. They passed this bill along party lines (Republicans mostly voted for the banks; Democrats mostly voted against them).

Hopefully, the bill will never get signed. Stay tuned.