Say it ain’t so, Cheerios! Coupon fine print now means you surrender your rights

Cheerios.com - but don't click! You'll lose your rights.
Cheerios.com – but don’t click! You’ll lose your rights.

Cheerios, Betty Crocker and Pillsbury might sound like the most American of American brands, but it sure sounds like Betty and friends hate America.

Perhaps you spotted a New York Times story today about consumers giving away their right to sue Big Brand companies if they do something as simple as download a coupon or like a page. In this case, the Big Brand company is General Mills, and it has now joined the long list of firms that are cajoling consumers into surrendering their right to sue by sneaking oppressive legal terms into every last corner of fine print. The good folks at the American Association of Justice alerted me to this on Monday, and I didn’t jump on the story right away because — well, what company hasn’t snuck binding abitration/class action prohibition language into standard form contracts?  I thought everybody knew you can’t really sue big corporations any more. The Supreme Court made that law of the land in 2011 with its chilling 5-4 ‘AT&T vs. Concepcion’ decision. 

Here’s how bad things are. Contracts, as you know them, require some basic things, including consent of the parties, right? WRONG!  After all, even the most sinister, cynical lawyer couldn’t argue that clicking like on a Facebook page signifies consent. So lawyers in this field have changed the word “consent” to “assent.” I’m not even sure I know what the word assent means. But I know it means you are screwed.

I spoke at a conference at Georgetown Law School two weeks ago devoted to this very topic, sponsored by Citizen Works and its super FairContracts.org project.  The list of big brains in the room was remarkable, including Deepak Gupta, the fine lawyer who argued for consumers (and lost) on the Concepcion case.  Ralph Nader spoke, too.  He suggested lawyers who have designed fine print that literally takes away citizens’ right to their day in court should be disciplined.  Others were more measured, though several lawyers repeatedly referred to the Supreme Court as “The Death Star.” Consumer lawyers who still find narrow topics in limited venues to file lawsuits are compared to the Rebel Alliance, hopping from planet to planet (state court to state court) to survive.

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I’ve resisted getting into the nitty gritty of this discussion in this piece because the details really don’t matter much. Before, if a company wronged you, you could sue, now you can’t.  There are some exceptions and qualifiers, but that’s all you really need to know.

Just in case, for quick review: Concepcion made it permissible for companies to include language in “contracts” that ban consumers from filing class-action lawsuits against them, and generally forces them into an outside-the-court process called binding mandatory arbitration (or in some cases, small claims court).  This is important because when companies misbehave $30 at a time, there is really no way to get justice now. When large corporations misbehave in large-scale ways, only large-scale lawsuits involving groups of consumers can stop them.  Today, such class action lawsuits are all but illegal.

Some additional details about General Mills situation from the folks at AAJ:

“General Mills has quietly updated its electronic terms of service to include a forced arbitration clause that will eliminate many of its customers’ rights to hold General Mills accountable in court. The April 2 change means that people who purchase General Mills products with coupons, turn in box tops or even just visit their website won’t be able to bring the corporation to court – parents can’t hold anyone accountable if their child has an allergic reaction to a mislabeled product; individuals will be denied access to justice for chipping their tooth on a rock in the cereal; and if you find a dead mouse in the box and get any reimbursement from the corporation, you are prohibited from ever telling anyone about this disgusting discovery.”

Here’s what consumer lawyer Brad Shear thinks of this:

“General Mills new terms of service are very troubling.  It is suspect that a consumer may waive their legal rights by utilizing a digital platform that is not owned or controlled by General Mills.  I doubt a court of law would uphold these new terms of service in regards to platforms that General Mills does not own.  If these new terms of service were deemed legal every single company in the world would incorporate them and nobody would be able sue a company for negligence or bad acts.”

General Mills refused to talk to the New York Times about it — hey, General Mills doesn’t have to anything, right? — and instead emailed a reporter a blah-blah-blah statement about how efficient arbitration is.  Hey, if arbitration were so great, why don’t corporations make it voluntary instead of mandatory?

OK, back out of the weeds.  This is classic divide and conquer strategy.  While you weren’t paying attention, American corporations have invented an extra-legal process and eliminated your due process.  With the Supreme Court squarely on the side of corporations, there isn’t an easy fix. A new federal law banning mandatory arbitration would be nice, but it’s probably not happening. Laws banning specific unconscionable terms, such as requiring consumers to fly long distances to argue their cases,  would be nice.

At a bare minimum, our legal system has to invent a new word for what’s going on here, and it’s not “assent.”  When companies puts some words on a paper in an unreadable small font, that shouldn’t constitute a contract. It’s a lot more like a no parking sign you didn’t notice before you got a ticket.   Now ask yourself: When did General Mills, or AT&T, or any of these corporations become equal to your town government?

If you aren’t angry about this, you aren’t paying attention.  If you want to learn more, you can watch a webcast of the seminar, “Making the Fine Print Fair,” at Georgetown’s website.  I speak at the 7:44 mark of the video. In this case, I compare the shock of fine print that robs you of money or your rights to the Windows Blue Screen of Death. Our legal system has crashed. We need a new operating system.

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About Bob Sullivan 1286 Articles
BOB SULLIVAN is a veteran journalist and the author of four books, including the 2008 New York Times Best-Seller, Gotcha Capitalism, and the 2010 New York Times Best Seller, Stop Getting Ripped Off! His latest, The Plateau Effect, was published in 2013, and as a paperback, called Getting Unstuck in 2014. He has won the Society of Professional Journalists prestigious Public Service award, a Peabody award, and The Consumer Federation of America Betty Furness award, and been given Consumer Action’s Consumer Excellence Award.

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