Appellate Court backs consumers over unfair prohibitions in Dell computer contracts

Illinois' Fifth District Appellate Court upheld the ruling of a St. Clair County circuit judge that a provision in Dell Computer contracts requiring that consumers waive their legal rights is not enforceable. The Court's ruling will allow a class action arbitration regarding Dell computer rebates to move forward, as Dell decided not to appeal the decision to the Illinois Supreme Court.

Dell's contracts unilaterally required consumers to waive their right to bring a class action proceeding. St. Clair County Judge Lloyd Cueto's order found this prohibition to be unconscionable and, therefore, unenforceable.

Customer Steve Wigginton filed the suit after Dell refused to pay rebates totaling $500 for the purchase of the computer. Dell took the position that rebate claim forms were filed too late, even though the company had not made the details about filing the rebates available to customers. Wigginton was not made aware of the need to meet a claim deadline when he was enticed to buy the computers by Dell's rebate offer.

This ruling follows a precedent-setting victory in Kinkel v. Cingular, where the Supreme Court of Illinois in 2006 found similar class action prohibition language in a cell phone contract unconscionable and against public policy. Brad Lakin, Managing Partner of LakinChapman, said "This is a great victory for consumer rights. We think it's clear that it is not right for Dell and other companies to put fine print language in their contracts and attempt to take away consumers' rights given by the legislature. The legislature has the class action mechanism for a reason - to allow consumers to band together in cases affecting many but where the money, like the $500 rebate here, is a small amount."

The Court's ruling also follows numerous state Supreme Court decisions ruling in favor of consumers. On July 3, 2008, an article in The Wall Street Journal, Recent Rulings Bolster the Case for Class Actions, discussed the New Mexico Supreme Court's ruling against Dell in a similar case. "The opportunity to seek class relief is of particular importance to the enforcement of consumer rights, because it provides a mechanism for the spreading of costs," the court ruled.

LakinChapman regularly represents consumers in class action litigation. Those seeking more information may contact the firm at classaction@lakinchapman.com.