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October 14, 2020

Small claims court as escape hatch for mass arb defendants? Not so fast, says L.A. judge

Last week, we notched an important victory for our clients in Los Angeles Superior Court. We represent Intuit customers who allege that the company deceived them into paying for tax preparation services when they were eligible for a free version of Turbo Tax that the IRS required Intuit to provide.

The court ruled that Intuit cannot avoid arbitration with nearly 10,000 of our clients. Judge Terry Green denied Intuit’s motion to push our clients’ claims into small-claims court—ruling that, under the language of Intuit’s consumer contract, only the customers can opt for small-claims court.

In commenting on Intuit’s choice to require arbitration proceedings and foreclose any a class action lawsuit, Judge Green wrote that Intuit “got the consumers’ claims out of litigation and into arbitration,” only then to realize “that resolving the claims individually would be hopelessly expensive. The question presented to the court here is whether Intuit has a viable way out of its own box. And the answer is no.”

Read the full story from Reuters.

And you can learn more about Intuit’s fraud from ProPublica‘s excellent reporting: https://www.propublica.org/series/the-turbotax-trap