Amazon changes TOS to let customers sue, after facing 75K+ arbitration demands
wsj.com
wsj.com
“Companies thought they were getting out of liability altogether,” by adding arbitration clauses, said Chicago lawyer Travis Lenkner, whose firm filed the majority of the Amazon claims. “Now they’re seeing exactly what they bargained for, and they don’t like it.”
"The employer here, DoorDash,faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order."
Also in that order is DoorDash trying to force drivers to switch from the American Arbitration Association (which is generally considered legit) to some off-brand arbitration company with whom DoorDash had cut a deal. Then DoorDash wanted to seal the details of that deal, which had come out at trial. The judge said no.
The American Arbitration Association is trying to keep from being a tool of big companies to oppress consumers and customers. If a contract requires arbitration under AAA consumer rules, the AAA will allow the customer to opt for small claims court, instead.([2], p. 15.) That's why so many EULAs now call for arbitration under the commercial rules, which are intended for bigger disputes. But the AAA charges the company a substantial up-front fee for commercial arbitrations. Which is how DoorDash got into trouble here.
[2] https://www.adr.org/sites/default/files/Consumer-Rules-Web.p...
One quibble about the quote: companies didn't bargain for this, they imposed it. At no point did they ask for, or negotiate for, or bargain for this. They said "Here's what we're offering, take it or leave it"
But the main point is 100% valid - companies thought they were getting out of liability altogether.
Technically, most companies do sneak in a way to opt out in their ToS, in order to bolster their claim that you “accepted” it if you don't happen to read that part of the ToS. I've successfully opted out of a number of arbitration clauses that way, though.
This is specifically because binding arbitration isn't supposed to grant corporations sovereign immunity. It's just to provide an alternative to litigation for people who want it.
My guess is that this is a problem caught through an audit. They realized they were siphoning millions of dollars of arbitration fees to solve menial conflicts.
Nah, you don't need an audit to notice $187 million/year flying out the door.
I have never needed to sue anybody, but if someday I do, my first phone call will be to Keller Lenkner. These guys are true hackers.
Also, they can move to get multiple similar suits combined into a single lawsuit.
I disagree. Arbitration also works when one party wants to win all the time and the arbitrators will allow that. At least, it normally works under those circumstances... Amazon's change of policy here is an exception.
As someone who dislikes forced arbitration, allow me to enjoy the schadenfreude for a minute.
Edit: the linked article also points out that the same thing happened to Uber: https://www.latimes.com/business/la-fi-uber-ipo-arbitration-...
Sure, it would be annoying if you had to pay $30 a month to read every article on HN. But... it's the Wall Street Journal. Many people subscribe to that, that's how it exists.
Protip: turn your phone sideways to solve the captcha
> It's ok to post stories from sites with paywalls that have workarounds.
> In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic (https://news.ycombinator.com/item?id=10178989). More here (https://hn.algolia.com/?query=paywalls%20by:dang&dateRange=a...).
I definitely agree with people indulging in a bit of dark amusement over big corps that so blatantly tried to rig things in their favor and for once got hoist by their own petard.
Do you have any Federal caselaw citations for that? Serious question.
Arbitration clauses didn't become nearly universal until after AT&T Mobility v. Concepcion, 563 U.S. 333 (2011). That decision said that state common law doctrines like unconscionability were pre-empted by the Federal Arbitration Act. After that decision the shift to mandatory arbitration began in earnest across all industries.
Federal law famously has no common law. (Not strictly true in practice, but true enough in this case.) I don't know of any Federal law, statutory or pseudo-common law, which could substitute for doctrines like unconscionability, especially as applied to arbitration clauses.
They may exist (thus the sincere question), but I can't bring to mind any limiting principles beyond simple rules of interpretation (e.g. resolve ambiguity against the drafter). Certainly in a cursory search it seems that it's not unheard of for such clauses, even in consumer contracts, to require a plaintiff to pay all expenses if they lose--i.e. English rule for attorney's fees. The only limit seemed to be that an arbitration clause couldn't be used to restrict the benefit of other explicit Federal statutory rights, but those seem to be in short supply and lacking the breadth of the FAA.
I suspect one of the only reasons arbitration clauses haven't become even worse for consumers is out of fear of Federal Trade Commission (FTC) attention. But that seems more like a temporary reprieve. All it takes is one company to call the FTC's bluff to embolden everybody else. AFAIU consumer-oriented companies refrained from using mandatory arbitration clauses largely out of fear of FTC reprisal for using clauses that were likely to fail under state law of the most populous states. But once Federal courts made it clear that the last of the state law barriers was pre-empted, fear of the FTC dissipated even though the FTC had no more or less powers than before Concepcion.
But generally, the reason that arbitration agreements are allowed is because of 'freedom to contract'. That is, people are free to agree to do almost anything in contracts. The reason this might not be allowed would be because the contracts are often 'contracts of adhesion' (drafted by one party and not able to be negotiated). But the Concepcion case knocked that down as a possible rationale, if memory serves. That case was about AT&T contracts with customers, which are obviously not negotiable.
But then this is premised on the fact that the legal system is capitalistic (laissez-faire economics and free-market libertarianism, etc etc).
Er. Free market, maybe, but what does it have to do with capital?
Being a jury is a public duty, poor people get a state sponsored defence atturney, judges are employed by the state, prosecutors are employed by the state.
The day legal system goes 'free market' you will have mafia rulling the streets.
Thats kind of true, but thats the point of many regulatory agencies and complaints procedures - in UK we have many Ombundsments which are meant to pursue the offenders on behalf of consumers. Also class actions lawsuits are meant to help with that. Thats why these arbitration clauses seem like they subvert the legal sysstem and they should not be allowed.
https://www.huffpost.com/entry/chipotle-mandatory-arbitratio...
Sounds like a great way to fight this arbitration nonsense to me.
https://gitlab.com/magnolia1234/bypass-paywalls-firefox-clea...