Consumers who were charged fees to terminate their cell phone service before their contract ended may receive benefits from a proposed class action settlement. Sprint Nextel has agreed to pay $14 million into a fund to be distributed to members of the class action. Sprint Nextel also agreed to provide $3.5 million in non-cash benefits to participating class members. In addition to this $17.5 million benefit to class members, Sprint Nextel also has agreed to not insert an early termination fee into its customer service agreements for 24 months. The details of the proposed settlement can be found here.
Without passing on the merits of this particular settlement or the allegations against Sprint Nextel, it nevertheless bears noting that individual consumers who were inappropriately charged fees of $25, $50, or $100 could never economically take on a huge corporation, like Sprint, in court. Cases that cost more to litigate than any possible recovery are sometimes called “negative value” cases. Many negative value cases are in the consumer arena. The United States Supreme Court has said that the existence of a negative value case is one issue that weighs in favor of class certification. Class actions help level the playing field and allow a group of similarly aggrieved people to band together to take on a corporate wrongdoer. And most importantly, consumer class actions protect us from unscrupulous conduct and make wrongful conduct unprofitable.
Richard J. Arsenault, 2011
