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Kentucky Supreme Court Strikes Down Cable and Internet Provider’s Class Action Ban

Kentucky Supreme Court Strikes Down Cable and Internet Provider’s Class Action Ban

nderscoring consumers’ rights, the Kentucky Supreme Court ruled that cable and Internet provider Insight Communications may not require the thousands of customers who endured hours or days of service disruptions in April and May of 2006 to seek relief one by one, a method that is time- and cost-prohibitive for many consumers.
The high court struck down the class action ban in Insight’s consumer contract, saying it allowed  the company to exculpate itself from liability. “The only economically viable means for customers to bring a company into court, as plaintiffs, under these circumstances, is by class action litigation,” the court wrote.Insight issued credits to about 2,600 customers for the time they had no service, but the company decided how much to credit each account. The ruling opens the door for the thousands more affected customers to bring their claims against Insight as a group.
“This decision makes it possible for consumers who are cheated out of small sums to fight that injustice,” said Paul Bland of Public Justice, who argued for the plaintiffs in the Kentucky Supreme Court. “If the Court had accepted Insight’s legal position, corporations could just opt out of the state’s consumer protection laws for all kinds of illegal actions.”
The court also invalidated Insight’s confidentiality provision, which prohibited customers with claims against the company from discussing the facts of their cases or disclosing how an arbitrator ruled.
Insight wanted to apply New York’s arguably less stringent consumer laws in the case since its corporate headquarters are in the Empire State. The Kentucky justices rejected the so-called “choice of law” provision, ruling that Kentucky – the only state involved in the service disruptions at issue – had a far greater interest in the case.
Louisville attorneys Jennifer Moore and Phil Grossman represented the plaintiffs in the state trial court that upheld the class action ban, provoking the Kentucky Supreme Court appeal and Public Justice’s involvement. Moore and Grossman were also co-counsel in the appeal.
State Attorney General Jack Conway, the Kentucky Association for Justice, and AARP filed friend-of-the-court briefs in the plaintiffs’ behalf. Public Justice’s Leslie Bailey and Melanie Hirsch (now of the Consumer Financial Protection Bureau) assisted in the appeal.
Thursday’s decision continues a trend among state supreme courts, which, increasingly, have struck down class action bans in consumer contracts. Since 2005, supreme courts in 10 states have ruled that class action bans were unfair to consumers.
Public Justice argued the successful appeals in five of the 10 recent cases.
To read the Kentucky Supreme Court’s decision in this case, click here.