August 13, 2014 at 2:50 p.m.
Rhinelander alum takes on cellphone companies
Rhinelander alum takes on cellphone companies
Kinney's father was a judge in Oneida County for many years and, after graduating from Rhinelander High School, he went off the University of Wisconsin, and eventually law school at the University of St. Thomas in Minneapolis.
Kinney had set his sights on a career in law, but it wasn't until his second year in the program that he found a real focus.
"I took a course called Complex Litigation," he said. "Among other things, the class talked about class lawsuits. One of the recent developments in class actions came about in a case called AT&T Mobility v. Concepcion. That was a U.S. Supreme Court decision, which means that the holding in that case is law everywhere, until the Court overturns itself or until Congress acts to overturn it.
"There is tons of information on this case and what it means going forward, but let me boil it down. That decision basically meant two things. First, mandatory arbitration clauses are now binding in contracts and second, class action waivers are now binding in contracts."
To the layman, that might sound like a different language, but Kinney said the decision will have wide-reaching consequences. In today's world, nearly everyone has a cellphone and a signed a contract with a cellphone company.
"The decision dealing with arbitration clause is concerning because it means that when people sign a contract with this language in it, they lose their ability to go to court," Kinney said. "This is a problem because arbitration is much different than court. There aren't the same safeguards. Sometimes arbitration is completely confidential, sometimes there are no appeals, sometimes there are no rules of evidence. The point is, it is much different than court and people don't always understand what arbitration is and if it is actually in their benefit."
It's the second part of the claim that was most interesting to Kinney, and what ultimately led him to develop a website aimed at helping the public understand and combat unfair charges on their cellphone bills.
"Class action waivers basically mean that if you sign a contract with that language in it, you can never be a part of a class in a class action against the person you signed the contract with," Kinney said. "When a group of people are harmed in the same way by the same person/company, many times, a class action is appropriate. It is meant to be a cost-saving tool. Why should thousands of people who have the same problem against the same person have to all hire their own attorneys, file their own complaints, pay court fees, and spend the time to prove individual cases if they all have the exact same claim? It is all about efficiency."
Because customers are prevented from filing this kind of class action lawsuit, Kinney said companies like AT&T are taking advantage. That means the average Joe with a contract is practically powerless to stop it.
"When a person has a cellphone service contract with AT&T, normally they sign a two-year contract," Kinney said. "The individual pays maybe $70 a month and AT&T provides them with cellular service. That is the contract. In May of 2013, AT&T started adding an "administrative fee" to everyone's bill. That is an amount beyond the $70 dollars customers agreed to pay when they signed up. It is not the amount in the contract. The administrative fee is $0.61 per line per month at AT&T."
While the number seems fairly miniscule, Kinney said it adds up quickly.
"This is clearly a net negative value claim because it would cost more to sue AT&T over the administrative fee than you could ever recover," he said. "This would be a perfect time to form a class. However, in your customer contract with AT&T there is this class action waiver.
"Now AT&T customers can't sue AT&T over this amount individually because it is too expensive, and they can't sue as a class because they waived that right in the contract. This leaves customers without any recourse at all. You may not think that getting $0.61 per line per month is that big of a deal, but AT&T is making over half a billion dollars a year by doing this."
Kinney's new website, crowdsuit.com, is a tool the public can use to help reverse this trend. Using the example above, for AT&T customers, it's nearly as simple as logging on.
"Every AT&T customer has a claim for breach of contract against AT&T for these administrative fees," Kinney said. "They are getting charged more than they agreed to pay. Legal claims can be treated like property. Just like any other property, you can sell it or you can give it away. This is a legal process called assignment. So an AT&T customer can log onto the website and assign their breach of contract claim to CrowdSuit. That gives CrowdSuit the legal claim against AT&T. CrowdSuit can then sue AT&T as if it were the original customer."
That means the public finally has a tool to combat the charges on their bills.
"So now if thousands of customers or hundreds of thousands of customers all assign their claims to CrowdSuit we can sue AT&T not as a class (because it is only CrowdSuit v. AT&T), but with class-like damages," Kinney said. "Once an AT&T customer assigns their claim to CrowdSuit they have nothing more to do with the litigation. They are done."
People who sign up on CrowdSuit won't see any fiscal return. The way Kinney sees it, it isn't worthwhile to mail a few dollars to everyone who signs up. Just factoring in the cost of postage would significantly diminish any return the public would see, but that doesn't mean, pooled together, the money can't do some serious good.
"Huge percentages of these people don't even cash the checks," he said. "They throw them out. And even if they do redeem them, it is such a small amount that normally it is insignificant. Instead of this, CrowdSuit tries to do something significant with any money we are awarded. We thought that instead of sending thousands of checks for a few dollars, let's send five checks for thousands of dollars and make more of an impact. So we picked five great charities and decided that individuals can choose one of these charities to direct their portion of an award to, assuming there is an award."
The five charities that Crowdsuit benefits are Operation Homefront, Habitat for Humanity, the Livestrong Foundation, Greenpeace and Big Brothers Big Sisters.
A little over a year has passed since Kinney started working on the CrowdSuit idea, and the website is finally up and running. He said the reaction within the legal community and among the general public has been mostly positive, but he's just getting started.
"I had known about the problem since my second year of law school and it took me about another year and a half to find a solution," he said. "I launched the website in June of this year. Since that time I have had a lot of positive reactions, mostly from the legal community. Law firms from across the country have contacted me about ways that they might be able to use CrowdSuit. Employment law firms and firms that have complex antitrust cases have approached us. People are very interested in this when they learn about it, but the problem is no one knows what is happening to them in their phone bills, they don't know that they have waived their right to be a part of a class action suit, or that it's even possible, and people don't know about CrowdSuit. That is why it is a big time for us to get the word out."
Kinney is adamant that Crowdsuit can do a lot of good for a lot of people.
"I think this is worthwhile for me because it is significant," he said. "This is a problem for such a huge population of our country and until now there has been no solution."
Andy Hildebrand may be reached at [email protected].
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