RIGHTS OFTEN FLY IF YOU SIGN FINE-PRINT DEAL.

Byline: JULIA M. SCOTT Staff Writer

Fine print is like a jam-packed closet: You know it's there, but you rarely have the time to slog through it. The next time you spy tiny black type, consider taking a closer look.

Increasingly, companies are inserting clauses that waive the signer's rights to have a trial by jury and to join a class-action lawsuit.

The clauses started popping up in contracts for credit cards, health insurance and employment a few years ago. Now, they are commonplace in many industries.

Signing means consumers agree to arbitration instead of trials, an alternative the U.S. Supreme Court has deemed perfectly suitable, according to William Warren, a University of California, Los Angeles, law professor emeritus who no longer practices. What alarms Warren is that some courts have sanctioned the class-action waiver, barring individuals from suing as a group.

``I think the big battle is really on class actions,'' Warren said. ``If you give up any right to a class action, you better have a good-sized claim, or lawyers won't represent you. Lawyers won't go to court over $100.''

Lawyers say companies began using the clauses to avoid expensive jury trials and to resolve disputes faster.

The waivers have consumer attorneys on the defensive.

Lawyers like Frank Pitre, president of Consumer Attorneys of California, claim the clauses thwart consumer rights by shutting the doors to the courthouse.

``When you have an arbitration agreement, you don't have that system of checks and balances,'' said Pitre, who is a partner at Cotchett, Pitre, Simon and McCarthy in San Francisco.

Matching a corporation against individual consumers in arbitration creates an unbalanced playing field that favors companies, Pitre said.

A consumer may appear once before an arbiter, but company representatives will appear and reappear, giving them the chance to build credibility, Pitre said. The decision is also binding, leaving no room for an appeal.

Lawyers who represent corporations have a different take on the issue.

``An arbitrator has no preference for the outcome,'' said Joseph Catalano, chairman of the litigation committee for the Association of Corporate Counsel of America. ``(Consumers) get their day before their tribunal. It's just not in front of a jury, which has a historical bias against corporate defendants.''

In the end, individuals still hold immense power, said Catalano, who also represents Union Bank of California in San Francisco.

``People vote with their feet and their checkbooks,'' he said. ``People who treat their customers unconscionably will lose business. It's a very, very competitive market.''

Class actions can be a powerful tool for those too poor to sue on their own, or for those with a modest claim that carries greater weight when grouped with similar claims.

Margaret Ann Galasso, who was part of the Santa Susana class-action lawsuit lodged against Boeing after a nuclear-reactor meltdown in July 1959, would not have been able to sue individually. She developed uterine cancer, according to court documents.

``I was on Social Security and disability and was not able to hire a lawyer upfront for $10,000,'' said Galasso, who now lives in Florida. Suing in a class action ``is important, but I think it needs to be revised,'' Galasso said. ``I think there needs to be more protection for the person suing.''

Last year Boeing settled for $30 million, nearly 50 years after the reactor released massive amounts of radiation. Boeing declined to comment.

Class actions can also be grossly misused.

``The ordinary abuse is that a lawyer is simply running a business here,'' said law professor Warren. Lawyers spot errors in a contract and round up everybody who has signed the contract. If a judge classifies the lawsuit as a class action, the defense usually settles, Warren said.

``At this point, the lawyer gets $28 million; the people involved get 28 dollars,'' Warren said. ``That's a class action at its worst.''

Consumers who look closely will spot the waivers buried in the fine print, but knowing they are there isn't worth much.

Consumers don't have much bargaining power when it comes to negotiating contracts with big corporations, Warren said. If you want the job or you need credit or health insurance, you sign on the line.

``The consumer really has nothing to say about what's in that contract,'' Warren said. ``The consumer either signs or doesn't sign. They don't change the contract.''

julia.scott(at)dailynews.com

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