Small-Claims Ceiling is Too Low for Consumer

Monday, June 15, 2009
Michael Stetz
San Diego Union Tribune

Steven Cash took a big appliance maker to small claims court. Not because his brand-new oven was hissing gas or sparking.

His soufflés kept falling.

The racks in the oven wouldn't glide out smoothly, so he had to wrestle
with them when he pulled out the soufflés. The delicate dishes didn't
have a prayer.

When I heard this, I winced.

Sagging soufflés! The horror! The injustice of it all!

I actually mean that. Cash is a gourmet cook and he had high
expectations of his oven, a Viking-made free-standing range. So when
the product didn't meet those expectations, he sued.

He went through small claims court, where you don't need
a hotshot lawyer to go after damages of up to $7,500. A lot of people
go there to settle car accident disputes. Landlords and tenants fight
over deposits. Businesses try to get customers to pay up for services.

Even though Cash prevailed – getting $300 and an extended
warranty – what he wanted was the full $7,500 for his time and trouble.

Cash says today's consumers aren't getting proper justice
in small-claims court because the current claim limit is, well, too
small.

(Call it too-small-claims court?)

I agree.
It's easy to pay more than $7,500 for an appliance. Cash did. His oven
was one of two he bought for more than $10,000. A home repair job can
easily eclipse that amount, too. So can the price of a used car.

“It's not economic reality,” said the Cardiff man, 49, who dabbles in real estate and spent as many as 100 hours on his suit.

Small claims is often the only option for consumers like Cash. Civil
courts handle larger disputes, but lawyers aren't likely to take on a
case with a small potential payout. So people wanting more than $7,500
– but not much more – are kind of in no-man's land.

Cash says the small-claims ceiling should go as high as
$50,000. Then people would use the system more, “and that would make
corporations behave better.”

His number is a bit on the steep side for me. I'd vote for $10,000.

The state Legislature hasn't increased the small-claims ceiling since
2005, when it went from $5,000 to the current limit. Before that, it
hadn't increased in 14 years.

We're the biggest state in the union, but not when it
comes to small-claims awards. Georgia and Delaware lead the pack at
$15,000.

Georgia?

What can you buy in Georgia that costs 15 grand? In California, that's dinner out and a couple of movie tickets.

California is hardly the lowest – most other states are in the $5,000 range. The most you can win in Kentucky is $1,500.

Man, why even bother?

The nonprofit Help Abolish Legal Tyranny, or HALT, supports raising the small-claims award limit to $20,000 in all states.

Small claims is simple, cheaper and produces quicker results compared
to other courts, said Theresa Meehan Rudy, program director of the
Washington, D.C.-based organization.

It gives people who don't have the money for a lawyer a
chance at justice, she said. The more people use it, the better. “It's
really a no-brainer to raise the dollar limit.”

Cash originally won $2,050 in his case against the Viking
Range Corp. But the company appealed, saying his particular oven didn't
feature easy-glide oven racks, and that Cash was exaggerating problems.

Viking did as much as it could to repair the problems, said Michael Hensley, a company attorney.

“He got justice,” Hensley said. “He raised a concern, and we really did try to work it out.”

Cash has become a small-claims court aficionado. He's taken two other
companies there and won. He sued Whirlpool over problems with his
refrigerator and got $5,865. He sued AT&T for soliciting him after
he had formally asked the company to stop. He won $1,500. (You can do
that? AT&T: Call me. Call me often.)

The catch is these battles aren't always between a small
good guy and a big bad guy. If a poor person or a struggling business
lost a $20,000 judgment, it would feel a financial tsunami.

That's why some consumer and legal protection groups are
leery of raising the limit. People such as Cash “might have a different
viewpoint if they're the ones being sued,” said Gail Hillebrand, senior
attorney for Consumers Union, which publishes Consumer Reports.

Only individuals, not companies, can seek today's limit
of $7,500. Consumer groups feared that the higher limit would send more
businesses and utilities after people who owe them money. The
small-claims limit for them remains $5,000.

Small-claims cases ensure that everyone can have their
day in court. But in California, I bet some people aren't even
bothering because the bar is too low. Even Tennessee's limit is
$10,000.

Tennessee?

We ought to be able to match that.

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