Federal Appeals court clears way for DirecTV lawsuit for alleged ‘bait and switch’ scheme


Published on Tuesday, November 24, 2009 10:18 PM PST

Deborah Mathis
Special to the Sun 

In a major victory for consumers, the Ninth U.S. Circuit Court of Appeals recently held that DirecTV’s contractual ban on customers bringing class actions against it violates a “fundamental policy” of California.

 The Court also ruled that, because DirecTV is headquartered in California and the national class action lawsuit is based on California law alone, DirecTV could not use the “choice-of-law” provision in its contract to avoid the application of California law in this case.

 “DirecTV knew that if it could avoid the application of California law and a nationwide class action, it could cheat customers in many states with impunity, because some states permit corporations to ban class actions,” said Public Justice Staff Attorney Leslie Bailey, who was the principal author of the appellate brief.  “Now that the company can no longer hide behind its contract, its customers will have their day in court.”

 The plaintiffs in this putative nationwide class action allege that DirecTV has violated California consumer protection laws by engaging in a “bait and switch” scheme in which it markets satellite television receivers for purchase, informing customers only after the sale is completed that they have merely “leased” the equipment and must pay additional long-term monthly fees or incur cancellation penalties. 

DirecTV’s consumer contract includes a term banning its customers from bringing or participating in a class action ban, but a California court had earlier ruled that the class action ban is unenforceable under California law. DirecTV sought to block the case by arguing that California law did not apply to the contracts of non-California customers.

“This victory allows us to vigorously pursue the claims of our clients throughout the United States,” said Michael Reese of New York, co-counsel in the case. “We look forward to bringing them justice in this matter."

 

Comments

36 comment(s)

    Mr. Min wrote on Feb 8, 2010 4:24 PM:

    " Before cancelling direct tv you MUST CANCEL your CREDIT CARD that they have linked to the account. If you don't they will automatically charge you their scam early cancellation fee or whatever they want. They cannot be trusted.
    So does anyone know yet, how to become a plantiff in the lawsuit? I am in the bay area of CA. "

    Lynette Myers-Brown wrote on Jan 21, 2010 6:41 PM:

    " I live in MI.Where I live you had 2 choices for TV dish or direct they r sister co's.Ordered direct they billed me twice sent 2 systems.make long story short reped myself in court was awarded judgement in 2007 direct still no payment stated in my contract now they took monies I didn't autho.I would like 2b contacted if not I am going to take them to court again and file a lein if I can they want us to pay them, but they don't pay even when they loose in court.thank you "

    Rrussell wrote on Jan 20, 2010 1:30 PM:

    " We had DirecTV installed 11/30/09 - called 11/30/09 to try and have issues resolved (poor picture quality and could not receive our local channels in HD)12/1/09 cancelled service rep said would be no fee. 12/10/09 unauthorized debit card transaction from DirecTV of $450.06 11/30-12/1/09, this is UNJUST if not criminal. Please let me know how I can be a part of this class action law suite "

    JMG wrote on Jan 19, 2010 8:47 AM:

    " WDM - please post an email or lawfirm URL where you can be contacted. "

    Terri wrote on Jan 11, 2010 8:29 PM:

    " I live in NY and would love to be part of the class action suit. I purchased my receiver from best buy to replace a defective one. We were never told anything about entering into a contract or that we were leasing equipment. When asked for them to provide us with proof that we entered any agreement they could not provide it. But that has not stopped them from ruining my credit. I have to contact the credit reports every couple of months to disput the neg report. "

    Maryscott OConnor wrote on Jan 8, 2010 4:55 PM:

    " Philip -- the contract clearly states that if they change the terms and conditions of their contract, you are free to cancel your contract.

    You can cancel it. Do not let them try to intimidate you. If they DO try to charge you an early cancelation fee, take them to small claims court. They COUNT on people being too intimidated to do this. It's all about volume with this corporation. "

    Philip Wilson wrote on Jan 4, 2010 1:48 PM:

    " My current issue with DIRECTV is we received an email starting that effective Feb. 9, 2010 I will be charged high fees because they will be adding more HD stations (130 to 200 plus). I called them to discuss how much they are charging is already more than Dish and the local cable companies and I would like to drop their service. They said that I had a contract that would not be ended until April 2010 and that I must pay anything they decide to charge, change etc. during that period.
    This must be illegal? "

    D Dicus wrote on Jan 1, 2010 2:09 PM:

    " I live in NC. Been dealing with these same issues with DTV since last Feb. The most aggravating part is that when you call the phone # given in letters...you get a message that someone will call you back.And, of course no one does. I've tried umpty-hundred times. Please let me join this suit!!!!! "

    Donald Albrecht wrote on Dec 22, 2009 3:18 PM:

    " I "leased" my hd/dvr receiver's in my house and have had my contract for a little over a year. In that year my account number stopped for my direct pay online and DirecTv did not inform me. Fine I payed my approximately $400.00 bill with late fees and explained to them I felt it "unfair" that they did not inform me. Over the next several months we spoke with four rep.s and were treated dispicably always repeating the same problem and paying the late fees to resolve the issue. We reduced our pkg recently & DTV chargedus200inlatefees!Becausewedidn'tpaythefullamount.wheredoisign?TXresident? "

    Lindsay wrote on Dec 21, 2009 8:14 PM:

    " I would also like to file. Where can I do that? Who can I contact? "

    Steve wrote on Dec 21, 2009 1:44 PM:

    " How may I sign in onb this class action law suit? "

    Kathleen West wrote on Dec 19, 2009 7:51 PM:

    " I signed up for Direct T.V. after having been offered a special by Quest. I trusted Quest so I went along with it. It was bait and switch all the way. Direct T.V. is a scam. I hope they get sued so much that they have to close. They're the worst of the worst! I just filed a complaint with the Attorney Generals office. "

    Mark wrote on Dec 18, 2009 4:01 PM:

    " Christina B - I agree that this is a business and not a charity, but this company is the poster child of deceptive business practices. Why is it that when you buy a house you need to sign documents BEFORE the purchase stating you have read all disclosures? Same with Cars, Same with Cell phone contracts, but with Direct TV, you don't get to know what you're actually getting into until it's too late. And then they try to limit you in terms of what remedies you have. "

    Christina B wrote on Dec 18, 2009 10:37 AM:

    " I am very happy with my Directv service. Before I commit to ANYTHING I always read the fine print, such is the case with the DriecTv service that I agreed to. I contacted DirecTv for their service and agreed to their terms. My only recommendation is to be weary of independent retailers selling the service. The only problem I see is a society conditioned to expect everything handed to them for free. Its a business not a charity. "

    Ebony wrote on Dec 18, 2009 8:04 AM:

    " Sometimes, DirecTV will still charge you an early cancellation fee, even if you can't get service.

    They seem to be of the opinion that you should have found a plave where you could have DirecTV. "

    Corrie Hayes wrote on Dec 15, 2009 7:18 AM:

    " It seems I may be a new victim of Direct TV. I SWEAR they told me I had 30 days to cancel if I didn't like the service. 10 days later I was told this was not the case, they had no record of saying this to me and if I tried to cancel I would have cancellation fees into the hundreds of dollars to pay. NOT TO MENTION they just so happen to fail to process my rebate and are charging me the FULL price for services I was lead to believe would be MUCH LESS. A great ideawentreallywrong. "

    steve miller wrote on Dec 13, 2009 1:26 PM:

    " I live in Illinois and signed up Nov.08.09 and now they are giving me the ryn around about my rebate and tell me if I cancel they will charge me fee for doing so, what a rip off stonewalled me until after the 15 day cancellation with out fees, now they want to stick it to me, who will repair my roof if I have them take my service out "

    Fred Sayin wrote on Dec 12, 2009 9:20 AM:

    " Due to changing banks and account numbers DirectTV can't charge me anything. It's very interesting DirectTV has not asked me for any of their equipment back OR are they waiting for me to cancel so they can get the early termination fees? I'm running the game the way a pro football team runs the game in the 4th quarter when ahead 20-0 waste every minute possible. Customers past/present do yourself a favor-change bank account numbers/credit card numbers. Also I contacted RJ Larrizza of FL plus Oprey Windfrey due to losing $500 to DirectTV. "

    Rich wrote on Dec 11, 2009 2:57 PM:

    " I just bought a DirecTV labeled DVR and went to activate it. They told me it would only get THREE digital channels and wanted to sell me a new access card for $20. I know how much those smart cards cost and $20 is a huge ripoff on top of the fact that the access cards I have would work fine.
    They wanted $99 plus a 2 year contract (and an extra $10 per month) for a receiver that would get all the Digital channels. My bill to them would have been over $150 permonth. Screw em! NoMoreBusinessWithDirecTV! "

    David wrote on Dec 11, 2009 7:56 AM:

    " I believe this company has somesort of software that is put in place to deceive. I signed up online for one of 3 pkgs called "Choice" i chose the first one for $29.99 a month for 150 channels plus since im a new customer and allowed them to do auto debit each month i would receive a 100.00 gift card thrown into the deal. Check your confirmation email and read carefully, they said what i chose was "family Pkg" and now im not eligible for any perks. They tricked me! be careful "

    WDM wrote on Dec 10, 2009 10:12 AM:

    " I work for a law firm that is currently looking for those spanish speaking customers who had Direct TV installed in their Commercial Establishments and then ordered a sports pay per view program only to be slammed with a lawsuit for violating licensing laws by a third party when you thought you had ordered the licnese for a commercial establishement. Direct TV & third party are seizing upon vuneralbe people who cannot speak english so as to later file suit against them and then force them to settle for thousands of dollars. Please contact me if this has happened. "

    TRUDGE wrote on Dec 9, 2009 8:09 PM:

    " Mac.......
    You got it right... NO repeat charges... and once signed up...go cancel whatever card you used then you got them OVER DE barrel instead of them holding you hostage "

    Richard Fedder wrote on Dec 8, 2009 1:16 PM:

    " Low quality electronics insures a stream of replacement receivers generating years of "contract commitment". A BIG question is where is the FCC during this ongoing scam? The FCC needs to step up to the plate and do their job. This fish barrel is starting to stink! "

    ILL BE DIRECT... wrote on Dec 7, 2009 10:20 PM:

    " I've used DTV for 20 years living in the OC area & was extremely happy with service, price & systems.
    Now in KRV I enthusiastically recommended DTV to a family friend. Happily, DTV & Costco had a $29.99 'package' that with rebates & fixed prices, would be about 100 more channels than Mediacom offers, etc. Long Story Short, 1st month: 30 calls minimum to DTV, Price is steadily $49/up a month & it took months to get the 'deal' from DTV &'discounts' Costco sent their portion of agreement, asap. I'M DONE WITH DIRECT. So Dish Network, how you doin? "

    Kay Krauss wrote on Dec 3, 2009 8:11 AM:

    " I have been a customer of DirecTV for 13 years paying for premium programming. I deleted the premium channels a couple of months ago. Last night I tried to get a defective receiver replaced. I've been through this drill many times before over the 13years. They would not replace without a technician coming out, which would cost me $49.95, even though I pay them an additional $10.00 per month for "total care". Needless to say, I was extremely upset and cancelled my service. I just received an E-mail I will be charged $320.00 for early cancellation. "

    here in cal wrote on Dec 3, 2009 7:08 AM:

    " Going after DIRECTV in a big way, here in LA.
    When people see this behemoth corporation preying on senior citizens on TV, people will run from this fraudulant outfit. "

    Gary Ede wrote on Dec 2, 2009 12:31 PM:

    " A little over 2 months ago I cancelled Comcast and switched to Quest/Direct TV for an advertised prise of $19.99 a month for the Direct TV. They now tell me this is ludicris and that they never offer this kind of a price. However, I was responding to a series of mailers that advertised that price. When I signed up with the local vendor I was told that the $19.99 had just "opened up that morning." But I am being billed $34.80 for a very basic service And, though this may be a reasonable price, it is not was agreed. "

    Victor La Fountaine wrote on Dec 1, 2009 9:59 PM:

    " Called and asked for advertised special offering $100 rebate to myself and person advising their services. Confirmed the rebate offer, and was told my monthly charge would be $39.95, upon installation,called to confirm rebate info,denied for 30 days,called again,denied again.Rcvd bill for $69.41 for first month,called and denied the difference in agreed price,told 8to10 wks to now apply,and not credit towards overcharging.Told them to take their equipment if they would not honor agreement.Salesman called,asked what would it take to keep me,I said, simply honor our agreement, now they want $431.00 for early termination?? "

    Xavior wrote on Dec 1, 2009 5:30 PM:

    " I have been a customer of DirecTV since 1997 back when it was USSB and Directv. I would not have anyone else. However, we are moving to a new place that faces North and we cannot get signal. Since we upgraded and paid $99 for an HD PVR last year the automatically enrolled us in a 2yr contract.

    If we could get signal I would stay with them because they have the best HD. So now we have to pay a fee. No loyalty at DirecTv anymore. "

    Mac wrote on Nov 30, 2009 7:23 PM:

    " That is why I never give any company the right to directly debit my monthly bill from my checking account. Anything that comes directly from my account is a one-time only payment, never automatic. I'm too afraid of some kind of error happening, like those people who end up with a $10,000 electric bill because someone pushed the wrong button. I wish you all luck in getting everything worked out to your satisfaction. "

    ralph swenk sr wrote on Nov 30, 2009 3:06 PM:

    " in 2008 i got directv and had it for about a year when i canceled my service with directv in sept of 2009 they told me i was under a contract i told them i was never told i was under any type of contract at they then told me i would have to pay a early termination when i checked my account they debt. my account 229.00 dollars i disputed this with my bank my bank they replaced it they are still demanding the money it is now in the hands of the state attorneys generals office "

    Debbie J. wrote on Nov 30, 2009 1:30 PM:

    " Direct TV should be put out of business they are making their own laws. They recently took $586 out of our account without notice and without authorization. They never discussed the amount to cancel, nor did I know I was in a contract they omit this info on purpose. They have yet to pick-up or give instructions as to how to return their equipment. They do it on purpose so they can debit and make a profit from stealing out of peoples accounts. That was part of my rent and now I cannot pay it. "

    Phil Hopstein wrote on Nov 29, 2009 11:39 AM:

    " Direct TV is as crooked as a snake. They take advantage of Senior Citizens and talk them into a two year contract with their so called low payment for a bunch of junk tv programs that is 80% commericals and junk selling. I only get about 10 channels that I watch but Direct TV states that they have over 200 for the price of 59.00 per month. Once they have you in the contract you cannot cancel unless you pay a very high cancellation fee and pay for your hardware also. Something needs to be done. "

    Fred wrote on Nov 29, 2009 8:32 AM:

    " I think the college graduate Larry McKnight needs to freshen up on his spelling! LMAO Go get yourself some free money Larry or how about you read what you sign first! "

    Larry McKnight wrote on Nov 28, 2009 12:53 PM:

    " Thank you! I am wound tight over the discreet way that Directv entered into our bank account and withdrew $379.80 without my knowledge. We live in Maryland and will gladly participate in a joint lawsuit againt this type of scam. I am retired from NSA after 39.5 years, a college graduate, and understand the illigal aspects of any company, or person, collecting and storing information on US citizens. "

    David Welther wrote on Nov 26, 2009 11:32 AM:

    " I live in Kansas can I be part of this class action lawsuit. I bought a receiver from Best Buy last December for my Motor home. Just found out I'm under a Two year contract and I didn't buy the receiver. "

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