Class Action Arbitration Sought Over Dell Computer Rebates

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Today, attorneys for consumers filed a demand for arbitration of a class action over Dell's denial of consumers' rebate claims.

Today, attorneys for consumers filed a demand for arbitration of a class action over Dell's denial of consumers' rebate claims. The case originally was filed in St. Clair County, where a judge ruled that a provision in Dell's contracts requiring consumers to waive their legal rights was unenforceable. The Illinois Fifth District Appellate Court upheld the ruling of the St. Clair County circuit judge (Wiggington v. Dell, Cause No. 03-L-455) in April. Dell decided not to appeal the decision to the Illinois Supreme Court. As a result, the case can now move forward as a class action arbitration.

Dell argued that its contracts unilaterally require consumers to waive their right to bring a class action proceeding. St. Clair County Judge Lloyd Cueto's order found the arbitration prohibition to be unconscionable and, therefore, unenforceable.

The class action demand for arbitration was filed with JAMS, a national organization providing arbitration and mediation services. The class sought includes:

All persons and entities in the State of Illinois who, since July 22, 1998, made a purchase from Dell via telephone and submitted a rebate claim to Dell or any of its authorized retailers that was denied as untimely, or to whom Dell promised an instant rebate that it did not pay.

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

This ruling follows the Lakin Law Firm's precedent-setting victory for consumers 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, President of The Lakin Law Firm, said: "This is yet another 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. In its ruling the court stated, "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 Lakin Law Firm, P.C. regularly represents consumers in class action litigation.

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Brad Lakin

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