TALLAHASSEE, Fla. (AP) _ Citing a U.S. Supreme Court decision last year, the state high court sided with a payday-loan company Thursday in a ruling that keeps customers from banding together to sue the company. The ruling means that anyone signing contracts with small print that says disputes must be settled through arbitration rather than through lawsuits can't later get together with other unhappy customers and file class action lawsuits.
The decision overturns lower court rulings in a dispute with McKenzie Check Advance and its customers who claimed the payday-loan company was using a check cashing service to charge exorbitant interest rates. Circuit Judge Elizabeth Maass called the arbitration clause in McKenzie's contracts "unconscionable'' when she ruled the customers could sue.
Maass invalidated the contracts, saying borrowers in Palm Beach County were unable to seek justice because they couldn't find lawyers willing to pursue individual claims for relatively small amounts of money.
An appeals court upheld the decision, but since then the U.S. Supreme Court ruled last year that California law couldn't invalidate language in AT&T Mobility cellphone contracts that calls for disputes to be settled through arbitration rather than lawsuits. It cited the Federal Arbitration Act.
The Florida Supreme Court said that ruling also applies in this case.
Paul Bland, who represented the loan company's customers before the state high court, said hundreds of class action lawsuits nationally have been thrown out since the U.S. Supreme Court ruling.
"This case really shows how disastrous for consumers that interpretation is,'' said Bland, a lawyer with Washington, D.C.-based Public Justice. "The harm to consumer protection is unbelievable.''
He said Public Justice settled three similar cases before the U.S. Supreme Court ruling that ended up winning nearly $20 million combined for tens of thousands of customers. Now, though, consumers don't have a legal remedy, he said.
*Picrured above is Circuit Judge Elizabeth Maass.