Hacker News Reader

Comment by frongpik | Hacker News Reader

Don't the ToS include a waiver of taking any legal action against RH, class action suits in particular, and a binding arbitration clause in case you really want to make some noise?

View on HN

Just because something's in a TOS doesn't make it legally enforceable, especially if you've got enough money collectively for expensive lawyers.

Well, in this case the ToS will be a contract one needs to "digitally sign" in order to open an RH account. RH would simply claim that its customers didn't have to accept the terms, regardless of how bs those were. I'm not a lawyer, though.

False. There’s no way out of a forced arbitration agreement that bans class actions. The courts always defer to arbitration, even when arbitrability is in question. It’s a ridiculous judicially made trap.

If they're able to coordinate a short squeeze, they can easily coordinate demand for thousands of arbitration requests.

And we know what happened to DoorDash when they tried to play that game: https://www.reuters.com/article/us-otc-doordash/this-hypocri...

Yes, but that’s not a class action.

Yes the idea is to use their insistence of arbitration against them by forcing them to pay for thousands of arbitration cases.

Everyone should utilize this strategy. We’ve been advocating for it for 6 years. AAA keeps upping its fees. Want to attack the system? Attack forced individual arbitration.

Agreed. A few more high profile en masse individual arbitration is the way to end the practice entirely.

I think it will cause them to think twice but the only real way to end it is legislation. The FAA was never intended to apply to consumer disputes or eliminate the ability of people to group together to make a claim. It's all a construct of the courts and corporate-friendly judges and needs adjustment.

According to the Supreme Court, forced arbitration is fine to have in a TOS. The past couple years there's been more awareness of it, it's one of the nastiest sneak moves in history to take people's rights away en masse. You don't find out until you get in a position where you've been harmed and you go to hold them accountable using the legal system: Surprise! You have to settle in this thing where the defendant pays all the participants. Here's your $200 check for your $200,000 claim, see you next time.

Which is why I find the story about Postmates and its efforts to avoid mass arbitration very funny.

Is having a clause like that in your ToS legal?

In the US, yes, a terms of service can force binding arbitration.

And the CFPB had made a rule outlawing it for financial firms and then the Republican senate killed it with the Congressional Review Act.

IANAL but I believe that some clever lawyers have used this to the advantage of the victims by essentially creating a DOS attack on the company, flooding it with binding arbitration claims.

https://www.nytimes.com/2020/04/06/business/arbitration-over...

Almost certainly. Don't expect the SEC to step in here, either.

Reply on news.ycombinator.com