Table of Contents
Fundamental Breach of ContractBack to Top
In my Small Claims Court claim of September 19, 2005, I originally claimed just under $10,000 in compensatory damages (just under the limit for Small Claims Court). After finding out just how egregiously this corporation had behaved, not just to me but to countless other ordinary Rogers consumers, I amended my pleadings in early March of 2006 and added a claim for punitive damages. Whereas my original claim was for just under $10,000, on my amended claim I asked that the total between both punitive and compensatory damages should come to the upper limit set by Small Claims Court: the full $10,000.
On December 17, 2005, Ted Rogers called my home and left a message on my answering machine. For four long months Rogers Wireless Inc had been insisting that I owed the corporation over $14,000 in charges for calls that I had never made. Ted Rogers apologized on behalf of himself and his corporation. And he zero’d the $14,000 worth of charges on my invoice.
Rogers’ zero’ing of over $14,000 on my wireless account – a sum that I notoriously never owed – did not do anything to touch my $10,000 claim against Rogers’ in Small Claims Court for fundamental breach of contract and breach of a contractual obligation of good faith.
The two distinct events, however, – the $14,000 supposedly owing on my cell phone and Rogers’ shutting off of my son’s cell phone – also happen to be related.
Rogers has conceded that they shut off my son’s cell phone on September 2 eight days before my bill was due because I was not making a promise to pay $14,000 that the CEO of Rogers fully conceded that I never owed – a debt that, in all events was being called in on September 2, 2005, ALSO eight days before my invoice was even due.
Is there a Settlement Agreement?Back to Top
Ted Rogers’ apology does not settle my September 19, 2005 Small Claims Court action in law. Only a final order of the court following a trial, or a formal Settlement Agreement can do that.
In the August 14, 2006 Amended Pleadings of Rogers Wireless Inc, Rogers makes the claim that there is a settlement agreement in the case of Drummond v. Rogers(SC-05-24969-00) at the third paragraph of the claim:
paragraph 3: The issues in dispute between the Plaintiff and Rogers have been settled and this action is barred by a settlement agreement between the parties.
Before addressing the question of settlement in a formal court of law, it’s worth distinguishing that there are two separate legal disputes involving the same Plaintiff and the same Defendant, one informal, and the other formal:
Drummond v. Rogers: The Spectacle
Drummond v. Rogers (SC-05-24969-00)
I’ll return to settlement issues in the latter momentarily.
Is there a Settlement Agreement in Drummond v. Rogers: The Spectacle?
Roger' Legal Team has argued that Ted Rogers' phone call to my home, along with his personal apology and the zero'ing of the bill, and then in addition the cheque for $5,000 from the corporation, has settled things between Rogers and me.
All of these gestures are predicated on the assumption that the dispute is between a lone disgruntled consumer and a lone human being qua chief executive officer: placate one disgruntled wireless consumer with a phone call from a legal person in physical person's clothes and "the problem" has gone away.
But I am not the first, nor the last, Rogers consumer to be treated in a cavalier, indeed contemptuous and oppressive manner. And there are reasons why "the problem" is not an individual one, unique to me, fully resolved by focusing on my particular case.
Government De-regulation Back to Top
The wireless industry in Canada has been effectively deregulated since 1994. Many consumers assume that the Canadian Radio-Television and Telecommunications Commission (CRTC) has regulatory oversight over the Canadian wireless industry, as it does over land phones (which, if you recollect, used to be monopolized by one corporation).
However, the CRTC long ago backed away from regulating the wireless industry, supposedly in an effort to allow free market forces to meet the needs of consumers. The central guiding principle of the CRTC with respect to Canada's wireless industry is "to foster increased reliance on market forces for the provision of telecommunications services." Those sections of Canadian telecommunications policy that permit the federal government to oversee the economic and social requirements of cell phone users have virtually never been tapped as those needs are presumed to be met, also, by market forces - oppressed consumers can "vote with their feet" and walk on over to a competitor.
This model of deregulation and reliance on market forces to correct social and economic ills has also been followed for the American wireless industry. Public interest advocacy groups in the United States are growing more vociferous in their complaints about the sometimes impossibly vulnerable position in which this increasingly leaves consumers. And American advocacy groups are also beginning to observe that, despite government deregulation, the competition appears to be shrinking, not growing, with smaller providers being gobbled up by larger players.
The 2005 report "Locked in a Cell" by the United States Public Interest Research Group indicates how de-regulation has afflicted the wireless consumer in the United States. As the report notes:
By almost any measure, the cell phone industry is one of the real market-expansion success stories of the digital age. As of the end of 2004, there were 182 million wireless phones and related devices operating in the United States, up from 24 million in 1994.
Yet, at the same time, the number of giant companies controlling the industry has been shrinking. In mid 2004, six companies – AT&T, Nextel, Sprint, Cingular, Verizon and T-Mobile – controlled approximately 80% of the market. Since then, four of the six – Cingular and AT&T, and Sprint and Nextel– have merged. Now, just four firms will control 80% of the market.
Such a high level of concentration in a major industry can be accompanied by excessive market power, which in turn can reduce competition to the detriment of consumers.
Numerous studies have documented rising complaints about low service quality in the industry. For example, a recent MASSPIRG report, Can You Hear Us Now, surveyed 874 Massachusetts cell phone customers and found general dissatisfaction, with 42% of consumers having a billing problem with their provider and 68% reporting dropped calls and other quality problems.
This phenomenon of large wireless corporations consuming smaller ones, of course, is familiar to us here in Canada. Rogers recently wolfed down Fido.
"The problem" is a systemic one, not an individual one.
Inauthentic Persons Back to Top
It's not just the fact that the government has gone fishing that transforms my lamentable experience into something typical and to-be-expected. There are legal and institutional problems with the ways that corporations are constituted and organized that lend a certain inevitability to the crappy relationship between consumers and corporations. The apology that supposedly settled my beef with Rogers is illustrative of that inauthenticity.
The letters that Ted Rogers sent to my home relating to the cancellation of our rendezvous for tea are laced with what can only be described as fatuous clichés. "The customer perspective is important to the continuous improvement of our operations," he says. "I am keen to meet with you so that I can listen to your experiences and learn from them."
Now the reasonable man or woman would say: "It's not the job of Ted Rogers, The Man, (or indeed the CEO) to listen to my experiences and ensure that Rogers Wireless Inc overhauls it's practices to coincide with human decency and basic social expectations of fairness and fairplay. What the hell is HE going to do?"
This sentiment is echoed by the legal team that Rogers has on my case:
When I summonsed Ted Rogers to testify in my Small Claims Court action, I received a letter on June 19 from Donald Plumley, a distinguished member of Rogers legal team. In that letter, Mr. Plumley underlines how irrelevant Ted Rogers - The Man, and indeed the CEO - is to the day to day operations of the corporation. "Mr. Rogers is a director and chairman of Rogers Wireless Inc," Mr. Plumley points out in his argument about how "unusual and inappropriate" is my Summons to Witness of Ted Rogers. "And as such, "he continues, "Mr. Rogers does not have any personal or direct involvement or knowledge with respect to customer accounts or procedures at Rogers Wireless Inc." I was then informed that if, "despite the foregoing," I was determined to serve Mr. Rogers with a summons then Rogers legal team would move to quash it.
("Quash This, Mr. Rogers," replied my brother Jeffrey, on hearing this news.)
It may be the role of the Chief Executive Officer and President of a corporation, in a climate where the government has opted not to regulate his industry, to impose stricter self-regulation within his fiefdom in accordance with the needs of the physical persons who nourish the legal person which he directs.
Of course, should the CEO be seized by this whimsy to accommodate the needs of the physical persons in whose midst the legal person thrives, he (or she - but in our case he) would run head on into the voratious sociopathic rational maximizer persona of the legal person to whom he is ultimately beholden. In fact (although it's a personal matter) he may in fact BE a voratious sociopathic rational maximer himself.
"The problem" is an institutional one, not an individual one.
Canadian consumers could just place their trust in the Chief Executive Officers of legal persons to "do the right thing." (And for the most part, in the current climate of government de-regulation, relying upon corporate goodwill appears, in any event, to be the paramount consumer recourse.)
Would YOU place your well-being in the hands of a legal person?
I could just have taken Ted Rogers at face value and assumed that his infamous apology to me flowed from a sincere recognition of how badly wrong his corporation had gotten the relationship with the consumer. But I haven't seen the least sign of sincerity in the rest of Rogers dealings with consumers.
If the apology was authentic then Rogers Wireless Inc would have changed the term of its contract that holds all OTHER Rogers consumers to the total charges on lost and stolen cell phones.
Why does a law professor with a fluky bit of media savvy warrant a personal apology and zero’ing of an obscene invoice but not the other ordinary consumers out there?
In case it's not thoroughly obvious, let me just say that beyond the fatuity of cliches like "The customer perspective is important to the continuous improvement of our operations," or patently false assertions like "I am keen to meet with you so that I can listen to your experiences and learn from them", on December 17, 2006 when Ted Rogers called my home to apologize, he was a two-dimensional PR prop. And his apology was nothing but a vapid PR spin.
Public Interest EnforcersBack to Top
One further issue to raise in Drummond v. Rogers: The Spectacle is that just as the CEO of Rogers is not a lone wolf operating in isolation from the corporations that he directs, I am not a wee lone consumer; not in law, I am arguing; and, I would maintain (from the emails I've been getting) not in the court of public opinion.
Whether I merit the mantle or not, I am arguing in my Small Claims Court pleadings that I fit the bill for what the Supreme Court of Canada calls a Public Interest Enforcer.
When the government opts to leave the consumer naked and shivering in the dark woods of Market Forces, and when those woods are appropriated by a smaller and smaller pool of larger and larger corporations, then the courts (of public opinion and of law) provide what scant shelter can be had.
In my amended pleadings of August 3, 2006, I added to my claim for compensatory damages one of punitive damages. In the leading case on punitive damages, although the Supreme Court expresses some anxiety that we might be becoming more and more American (litigating this, litigating that), it goes on to affirm that punitive damages are as Canadian as the preoccupation that we are becoming American.
"Critics of punitive damages," observes the court, "warn against an “Americanization” of our law that, if adopted, would bring the administration of justice in this country into disrepute." But the Supreme Court goes on to reassure us that while "[t]hese are serious concerns,"
in fact, the punitive damage controversies have little if anything to do with Americanization of our law. Jury awards of punitive damages in civil actions have a long and important history in Anglo-Canadian jurisprudence. They defy modern attempts at neat classification of remedies. The jury is invited to treat a plaintiff as a public interest enforcer as well as a private interest claimant. Almost 240 years ago, government agents broke into the premises of a Whig member of Parliament and pamphleteer, John Wilkes, to seize copies of a publication entitled The North Briton, No. 45, which the Secretary of State regarded as libellous. Lord Chief Justice Pratt (later Lord Camden L.C.) on that occasion swept aside the government’s defence. “If such a [search] power is truly invested in a Secretary of State”, he held, “and he can delegate this power, it certainly may affect the person and property of every man in this kingdom, and is totally subversive of the liberty of the subject”. As to punitive damages, he affirmed that:
[A] jury have it in their power to give damages for more than the injury received. Damages are designed not only as a satisfaction to the injured person, but likewise as a punishment to the guilty, to deter from any such proceeding for the future, and as a proof of the detestation of the jury to the action itself.
The plaintiff who is awarded punitive damages is "overcompensat[ed] ...in exchange for the socially useful service" they perform as a public interest enforcer. (In my case, I'm prepared to have any overcompensation go the Public Interest Advocacy Centre, to whom the net proceeds will be donated, so I can get on with other things).
To attain the elevated status of a Public Interest Enforcer, there needs to be something unique and unusual about his or her situation that places him or her in the vaunted position.
In the case in which the Supreme Court made its remarks about the Uber-Canadian Public Interest Enforcer, Whiten v. Pilot Insurance, they stressed that "no one other than the [plaintiff] could rationally be expected" to be capable of establishing that the defendant corporation had behaved abominably. In her case, Ms. Whiten was suing her insurance company. Pilot Insurance had refused to pay out the valid insurance claim of $345,000 on Ms. Whiten's fire-destroyed home and left her homeless for an excrutiatingly long time while they tried to force her to accept a settlement of $5,000 in lieu of that to which she was rightfully entitled. Remarkably, the impecunious Ms. Whiten hired a lawyer who, for a total bill of $320,000, took her case on its long and winding path all the way to the Supreme Court. She was fortunate that her faith in her lawyer was well placed as she was ultimately also awarded solicitor-client costs. And (beyond her $345,000 in compensatory damages) $1,000,000.00 in punitive damages!
I have also had my share of virtually blind good luck.
The phenomenal fortuity of first of all getting the story about Ted Rogers' cell phone being cloned by a group linked to Hezbollah, and then, despite surprising resistence, getting the story published in a national newspaper, causing Rogers' Corporate Communications department to manage "damage-control" by putting Ted Rogers himself up to a phone call - all of these extraordinary events and travails leads me to conclude that "no one other than" me "could ever rationally be expected" to get this far. I'm quite certain I couldn't do it again myself.
My sense is also that the vast majority of ordinary consumers would not be capable of tearing through the legalese on Rogers' standard form contracts without paying prohibitive legal fees. This is not intended as an insult. Rogers' standard form contract appears to be designed for impenetrability. Further, I was told by two of Canada's leading class action lawyers in the fall of 2005 that I should just pay the $14,000 because I would never succeed against a juggernaut like Rogers!
Having got this far, my sense is that I'm somewhat uniquely positioned to perform the socially useful service of seeking the deterrent effect of punitive damages.
A punitive damage claim is one that sounds in law - although, as an award that is supposed to have a generalized and deterrent effect, it clearly sounds in the court of public opinion. Sealing the record on a punitive damages award is oxymoronic.
So in the Court of Public Opinion, the case of Drummond v. Rogers: The Spectacle has not, in my strong opinion, settled. The ordinary consumer (clothed, for the moment, in my persona) still has a beef to settle with Rogers Wireless Inc.
The informal legal case (in the Court of Public Opinion) is tied to the formal case, as it is in the latter venue (Small Claims Court) that I am advancing my formal claim for punitive damages.
In light of this connection between the informal and the formal legal dispute, it would be in the interest of Rogers Wireless Inc to begin by convincing a judge that in that formal venue, things are copacetic between Rogers and Me: I've settled (in law).
In order to put to eliminate my strictly legal claim for punitive damages Rogers has to put Drummond v. Rogers (SC-05-24969-00) to bed. If Rogers were to succeed in its claim that IN LAW, I have a settlement agreement with Rogers Wireless, then it would be killing two birds with one stone: the punitive damages award AND its deterrent effect.
This leads me to my next question:
Is there a Settlement Agreement in Drummond v. Rogers (SC-05-24969-00)?Back to Top
In the August 14, 2006 pleadings of Rogers Wireless, the claim is made that my September 19, 2005 action in Small Claims Court is barred by a settlement agreement.
First of all, Rogers claims that the phone call from Ted Rogers on December 17, 2005 was an offer to settle, including payment of my court filing costs.
Although Ted Rogers offered to reimburse Harry Gefen for the fees that he incurred to attend the Toronto Fraud Forum, where Harry uncovered the story about Ted Rogers’ cell phone being cloned by a group linked with Hezbollah, there was never any mention of “court filing costs”.
Rogers’ claim that my Small Claims Court action is settled is further buttressed by the evidence of a letter that I sent Ted Rogers on December 22, 2006 (along with a photograph of Ted with my Aunt Isabelle in 1964) and a letter that Ted Rogers sent me on January 25, 2006.
Rogers Wireless Inc argues that Ted Rogers’ letter of January 26, 2006, accompanied by a subsequently certified cheque for $5,306, constitutes a Settlement Agreement in a legal suit against Rogers Wireless Inc.
How to Interpret the Plain Language of Ted Rogers’ LetterBack to Top
The principle balance of the proffered cash in Ted Rogers’ letter is characterized as a “goodwill gesture” of $5,000.
A goodwill gesture is meant to preserve the fidelity of the consumer and to coddle his or her fickle desires in a free market of wireless providers.
As of August 14, 2006, I have one year remaining on my three year contract with Rogers Wireless Inc. Whether the gesture of the CEO of Rogers Communications Group Inc is sufficient to sustain me as a consumer over that period remains to be seen. If the $5,000 Ted Rogers has paid me to retain my loyalty as a wireless client operates as a carrot, the early termination penalty of $200 that Rogers claims I owe the corporation if I cancel my contract ahead of the three year date also operates as a stick. Given my experience as a Rogers Wireless consumer, $5,000 is a start on purchasing my goodwill.
The letter also mentions “out-of-pocket expenses” of $309.60.
Harry Gefen’s “out-of-pocket expenses” for attending the Fraud Forum – a cost that Ted Rogers explicitly offers to cover in his apology – totalled $220.00.
The first item on my long list of “out-of-pocket expenses” is for paper and printer fluid for the hundreds of letters I sent to Rogers Wireless Inc and the credit bureaus between August 28, 2005 and December 17, 2005 pleading with Rogers to relent from their campaign of “collection treatment” on a bill that I never owed. $309.60 is a start.
The letter never mentions the corporation Rogers Wireless Inc, let alone a legal dispute in Small Claims Court.
It would be an uphill battle, given the characterization of it by Ted Rogers as a “goodwill gesture”, to construe the letter and cheque as a contract. It shares far more legal features with a gift – also a distinct legal instrument.
But even if it were to be construed as a contract, it’s a contract to reimburse me for “out-of-pocket expenses” (of an unspecified nature).
Mr. Rogers’ letter has nothing to do with a formal Settlement Agreement (a distinct legal instrument) between parties to a wholly independent legal dispute which is never mentioned in the letter, one of which parties (Rogers Wireless Inc) to the unmentioned legal dispute is also not even mentioned in the letter.
Requirements in Law for Valid and Binding Settlement AgreementsBack to Top
As fully insured members of the Law Society of Upper Canada, each member of Rogers’ Legal Team is presumed to know what a valid Settlement Agreement looks like in law.
Settlement Agreements are a special form of contract. The Rules of Small Claims Court are specific about what is required of this very specific form of contract.
First of all, a Settlement Agreement, to be valid, must be in writing. Rule 14 of the Rules of Small Claims Court is very explicit about this requirement under the subheading “Written Documents”:
14.01(1): An offer to settle, an acceptance of an offer to settle and a notice of withdrawal of an offer to settle shall be in writing.
The word “shall” in a piece of legislation is unequivocal. Compliance is obligatory for enforceability. To constitute an enforceable Settlement Agreement with associated cost implications, both the offer and the acceptance of such an offer MUST be in writing.
I have never accepted an offer to settle from Rogers Wireless Inc, most certainly not in writing. In a formal court of law (as opposed to, for example, the Court of Public Opinion, where the standards might be a little bit more fluid) there has never been a Settlement Agreement between Rogers Wireless Inc and myself.
Although a settlement offer can be poorly drafted and riddled with leaks, settlement agreements should be specific about the terms of such a settlement:
14.01.1(1) A party may serve on any other party an offer to settle a claim on the terms specified in the offer. O. Reg. 258/98, r. 14.01.
A settlement doesn’t HAVE to be specific as to its terms. The operative word in Rule 14.01.1(1) of Small Claims Court is “may”. But it would be foolhardy for a party to be vague and unspecific in an offer of settlement. The so-called contract might not be worth the paper it’s written on if it is poorly drafted.
The Demands of the Legal Profession: Leaky ContractsBack to Top
The lawyer who drafts a leaky settlement agreement can be sued by his or her client for negligence if the so-called settlement agreement does not hold any water. The lawyer who drafts a shabby settlement agreement in Ontario can also be disciplined by the Law Society of Upper Canada for professional incompetence. Lawyers are presumed to have, in their bundle of basic competencies, the wherewithal to draft legally binding settlement agreements. That’s why they get paid the big bucks.
Apart from the legal requirement that a Settlement Agreement be in writing, if a defendant wants to obtain a contractual commitment from the plaintiff to refrain pursuing legal action on the cause of action which forms the basis of a legal dispute, the contract needs to specify in its terms that that is what it is bargained for in the agreement.
The goodwill gesture letter from Ted Rogers is woefully short of the mark for the aspiration to which Rogers Wireless Inc attributes it.
If I were Rogers Wireless Inc, I think I might be inclined to sue my lawyer.
Can’t We Just Lighten Up on the Rules of Court?Back to Top
In the typical case parties in Small Claims Court are not represented by lawyers. While the Rule requiring Settlement Agreements to be in writing is unequivocal – an acceptance of an offer to settle SHALL be in writing – it is conceivable that a Small Claims Court judge might be forgiving of an unrepresented party who was not as exacting as a lawyer and member of the bar society in specifying the terms of a settlement agreement with everything securely nailed down in writing.
Legal SimpletonsBack to Top
But in the case of Rogers Wireless Inc, no such legal naiveté can be plead. Unlike the usual clientele of Small Claims Court, Rogers has a formidable legal team working on this case. And Rogers is notoriously legalistic in the extreme (there are endless ... examples) in its other contractual dealings. In fact in the Amended Pleadings of Rogers Wireless Inc, Rogers raises the classic legalistic argument of those who draft standard form contracts: You signed it. Your choices were to take it or leave it. You took it.
The members of Rogers’ legal team have at least five law degrees between them and are fully insured members of the Law Society of Upper Canada. Rogers Wireless Inc has a PARTNER at Lang Michener, LLP – a Queen’s Counsel, no less – working on this Small Claims Court action.
Rogers’ legal team is also demonstrably capable of drafting a proper legal offer of settlement. They tried their hand at one on October 14, 2005 when Rogers Wireless sent me a Settlement Offer which foresaw me paying Rogers $2,000 to make my own Small Claims Court action of $10,000 go away.
How touching and quaint that Rogers Legal Team forgot how to draft a proper settlement agreement when they urged their Chief Executive Officer to send me a goodwill gesture of $5,000 – so like the poor little creature that mamie found in the snow banks, dying of cold and hunger.
WWOCD: What Would the Ordinary Consumer Do?Back to Top
As someone with formal training in law I can quite swiftly track down the Rules of Small Claims Court that relate to Settlement Agreements. It’s not difficult for me to assess, in law, which arguments are bogus and which require measured legal reflection. That said, it’s not as though I have memorized the Rules of Small Claims Court. I, too, need to expend time and energy getting up to legal speed.
Thank god I'm on sabbatical (and tenured) and can devote energy to researching and writing books on whatever catches my fancy. Thank god I have colleagues across the country who can get as titillated by this subject as I; and praise the lord for former students who have become gifted lawyers and good friends.
But what on earth would the unrepresented ordinary consumer in a Small Claims Court action do against Rogers Wireless and its team of lawyers?
Anyhow, is it even fair that an unrepresented party might have to go up against a lawyer, let alone Rogers legal team, in a Small Claims Court action?