New Mexico Supreme Court strikes down class-action ban

by Deepak Gupta

On Friday, New Mexico's highest court unanimously handed consumers an important victory, holding that, "in the context of small consumer claims that would be prohibitively costly to bring on an individual basis, contractual prohibitions on class relief are contrary to New Mexico's fundamental public policy of encouraging the resolution of small consumer claims and are therefore unenforceable in this state."  New Mexico joins a unanimous and growing group of state and federal courts in declaring that the Federal Arbitration Act does not preempt such state-law rulings--a question the U.S. Supreme Court refused to hear last month.

The New Mexico case involved allegations that Dell misrepresented the amount of memory in its computers--a misrepresentation that was widespread, but which cost each customer only $10-$20 each.  The opinion has some great language about the value of the class action device in cases involving small consumer claims.  The court recognized that "the class action functions as a gatekeeper to relief when the cost of bringing a single claim is greater than the damages alleged." Dell's class-action ban had "essentially foreclosed the possibility that Plaintiff may obtain any relief," such that "enforcing the class action ban would be tantamount to allowing Defendant to unilaterally exempt itself from New Mexico consumer protection laws." Congratulations go to Paul Bland and Amy Radon of Public Justice, who argued the unconscionability issue as amicus curiae.

Comments

[chere]

I Congratulate Paul Bland and Amy Radon of Public Justice, too.
Great Job guys! We are cheering when you win!
Keep up the awesome work!

[Payday Loan Advocate]

Some in the government, like Barack Obama, are seeking to limit the American peoples’ access to on-demand, short term financial assistance. Some cities and towns are trying to impose restrictions on where these legitimate businesses can set up shop. Even worse, several states, including Georgia and North Carolina, have successfully imposed all-out bans on the industry, with several more attempting to follow suit. Citizens all across the nation are seeking to have their voices heard by fighting legislation that would obliterate the payday loan industry nationwide; misinformed political officials are pushing for a complete ban in the name of personal political gain, regardless of the hundreds of thousands of potential lost jobs in an already turbulent economy.