I'm not a lawyer, but I don't see how they could legally restrict you from joining a class action lawsuit, even if you sign a contract saying so; my (very) limited understanding of contracts leads me to believe that illegal contracts aren't enforceable in court (i.e. AT&T couldn't enforce a service contract that says you have to shoot your neighbor if you terminate the contract before 2 years, because that would be forcing you to commit an illegal act to satisfy the contract).
I'm not sure whether this clause would stand up in court, especially if AT&T were discovered to be doing something skeevy that only a class-action lawsuit would provide effective relief for. However, in general, a lot of consumer contracts have mandatory arbitration clauses buried in the fine print and the courts have been happy to delegate their work to the arbitrators.
Also remember that companies are happy to put all sorts of unenforceable terms into their legal boilerplate, to intimidate customers who don't know better.
If I were writing the laws I would enact a very strong presumption against mandatory-arbitration clauses in any contract of adhesion. But I'm not.
I agree that it's unlikely to be legally enforceable, I'm also pretty sure some states are moving to make portions of contracts requiring consumers to waive certain rights invalid. (Your example of being required to shoot a neighbor is clearly nonsense however).
Until it's tested in court though we'll likely never know. I assume part of AT&T's rationale is that:
A) They have the time & resources to argue then appeal this point for many years should any significant class action arise.
B) It may be enough to discourage consumers from joining aclass action. In many class actions the only people to see significant money are the lawyers. Consumers usually receive something of nominal value and if AT&T were to highlight this cause it may be enough to persuade most people not to bother.
Sorry, I knew that was a nonsensical example, I was just trying to make a clear example that they couldn't put any language into the contract that you couldn't legally fulfill.
In any case, I fear that you're very correct on both points. Even if it's not legally enforceable, it's going to cost the average consumer more than they're worth to fight it and have it nullified.
By federal law, they cannot prevent consumers from joining class actions. However, they can in some states.
Also, there's a difference between an illegal contract (which is a nullity and for which no remedies are available in case of a breach) and an unenforceable contract (which may still be enforceable under theories of unjust enrichment, promissory estoppel, etc). A contract to do something illegal is an illegal contract. A contract with unconscionable (per se unfair) terms is usually an unenforceable contract.
I suspect class actions attorneys would get excited by this, because of the extra fees they can charge. I suspect the process would now go something like this:
1. Some people talk to a class action attorney about a class action suit.
2. Attorney finds a class and a cause and moves forward on suit
3. AT&T objects, possibly countersues
4. Attorney now has small-to-medium sized fight over non-enforceability of the clause
5. Class action suit goes ahead as planned
It's steps three and four which are new, and require more lawyering by the class action attorney - who will no-doubt do it, since they wouldn't have started the class action to being with if they hadn't thought they'd win.
As for how this compares to mandatory arbitration clauses, the theory behind them is that people can get similar levels of justice through that process as they can through the courts, with less cost and general overhead required. Preventing class action suits, however, takes away a form of legal remedy - the class action - and doesn't replace it with something similar. There's no legal theory like this behind this clause; it's pretty blatantly about taking away a form of legal recourse without replacing it.
I am pretty sure a clause like this has never been tried before the courts, but if it was, my money would be on it being thrown out rather quickly.
An interesting tactic Bell (in Canada) has done recently is explicitly add a fee for canceling if the contract conditions change.
Generally, terms will say that the contract may change from time to time, and it's left up to the reader to make the logical jump that a material change means they can cancel without penalty. Bell's terms now expressly say that the only way you can object to terms changing is by discontinuing your service, for which you will have to pay the normal ETFs.
I don't think this has been tested in court, but it sure seems like it stinks.
Arbitration clauses are getting tossed out left and right... a class action clause would likely be out the window even faster. They might as well put, "you permit us to be evil greedy bastards and screw you" in the contract... it's not going to stop me from suing them when they actually become evil greedy bastards who screw me.
All services you sign up for nowadays have the magical "binding arbitration" clause which states that all disputes will decided by an arbitrator of the service provider's choosing. And the individual arbitrators know that ruling against the service provider is the fastest way no longer be hired by that service provider.
I'm surprised they haven't done that sooner. IIRC AT&T amended the terms of their "Universal" credit card to include binding arbitration and forbid class actions... right after they lost a class-action suit for having a flexible definition of when a payment would be counted as "late".
