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Wednesday, July 29, 2020

Patreon denied preliminary injunction

From the Superior Court of San Francisco:
2020-07-29 LAW AND MOTION, 302, PREVIOUSLY SUBMITTED ON JUL-13-2020, ORDER TO SHOW CAUSE RE PRELIMINARY INJUNCTION IS TAKEN OFF CALENDAR PURSUANT TO THE ORDER DENYING PRELIMINARY INJUNCTION, FILED ON JUL-29-2020. (D302)

2020-07-29 ORDER DENYING PRELIMINARY INJUNCTION
There was also a hearing in Owen's arbitration concerning Patreon's motion for summary judgment today. That ruling won't be given until next week, but based on what the lawyers have said, I think it is very, very unlikely that the arbitrator isn't going to permit the arbitration to proceed to the final hearing.

So far, so good. Especially in light of the Commerce Department filing a petition to prevent the social media platforms from performing their little publisher/platform dance to avoid responsibility for their own actions.

The text of the judge's order denying the injunction and declining to interfere in the 72 arbitrations has been posted publicly and can be read below. It is essentially the tentative ruling plus the judge addressing Patreon's additional citations; read the whole thing for a good understanding of where the situation stands at this point in the process.

SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO

ORDER DENYING PRELIMINARY INJUNCTION

Patreon seeks a preliminary injunction to enjoin defendants “from continuing to pursue improper claims against Patreon in JAMS arbitration,” pending this Court’s consideration and final adjudication of Patreon’s complaint for declaratory judgment. Defendants are individual claimants in 72 pending JAMS arbitration proceedings against Patreon. Patreon claims that those claims are barred by its Terms of Use because they involve nonarbitrable claims. Patreon’s request for a preliminary injunction is denied, for several reasons.

First, Patreon fails to show that it will suffer any irreparable injury or interim harm if an injunction does not issue. JAMS has agreed to determine the threshold jurisdictional issues Patreon raises and will afford Patreon an opportunity to object to its jurisdiction in the course of the arbitration proceedings. If Patreon is correct that Defendants’ claims are not arbitrable or are outside the scope of the parties’ agreements, the arbitrators presumably will rule in its favor on those issues. Merely having to incur expense in order to participate in arbitration proceedings is not irreparable harm.

Second, Patreon fails to show a reasonable likelihood of prevailing on its claims. Even if Patreon were correct that Defendants’ claims are not arbitrable, those issues are for the arbitrator, not the court, to decide. “An arbitration provision’s reference to, or incorporation of, arbitration rules that give the arbitrator the power or responsibility to decide issues of arbitrability may constitute clear and unmistakable evidence the parties intended the arbitrator to decide those issues.” {Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892 [arbitration provision’s reference to JAMS rules that assign issues of arbitrability to the arbitrator “evidences the parties’ clear and unmistakable intent to submit issues of arbitrability to the arbitrator”].) Rule 8(b) of the JAMS Streamlined Arbitration Rules provides, “Jurisdictional and arbitrability disputes, including disputes over the formation, existence, validity, interpretation or scope of the agreement under which Arbitration is sought, and who are proper Parties to the Arbitration, shall be submitted to and ruled on by the Arbitrator. The Arbitrator has the authority to determine jurisdiction and arbitrability issues as a preliminary matter.” Indeed, Patreon asserts that a JAMS arbitrator has already ruled in its favor in a similar case. (Reply at 4 n.3.)

Third, California courts rarely grant the extraordinary relief Patreon seeks here: an injunction interfering with an ongoing contractual arbitration proceeding. “Once a dispute is submitted to arbitration, the [California Arbitration Act] contemplates limited, if any, judicial involvement. ‘Typically, those who enter into arbitration agreements expect that their dispute will be resolved without necessity for any contact with the courts. [Citation.] ‘It is the job of the arbitrator, not the court, to resolve all questions needed to determine the controversy.’” {Briggs v. Resolution Remedies (2008) 168 Cal.App.4th 1395, 1400.) That conclusion is “especially true” where, as here, “the arbitration began without the need to seek a court order compelling arbitration.” {Id. at 1401.) As another court has explained, “An arbitration has a life of its own outside the judicial system. The trial court may not step into a case submitted to arbitration and tell the arbitrator what to do and when to do it.” (Titan/Value Equities Group, Inc, v. Superior Court (1994) 29 Cal.App.4th 482, 487-489 [trial court exceeded its jurisdiction when it attempted to remedy arbitration delay by ordering arbitration to proceed under stated conditions subject to reinstatement on trial calendar].)

To be sure, Patreon is correct that this principle is not an inflexible one. However, the cases Patreon cited for the first time at the hearing do not support its position, either because no issue was actually raised or decided on appeal as to the propriety of such injunctive relief, or because they are readily distinguishable on their facts. (See, e.g., Brooks v. AmeriHome Mortgage Company, LLC (2020) 47 Cal.App.5th 624, 629, pet. fo r review filed, No. S261879 (June 9, 2020) [court issued preliminary injunction to enjoin arbitration of PAGA claim, which employer conceded was “nonarbitrable” under controlling authority]; Stasz v. Schwab (2004) 121 Cal.App.4th 420, 426-427, 442 [affirming judgment confirming arbitrator’s award; opinion notes that trial court denied repeated requests to stay arbitration proceedings, but suggests in dicta, citing federal authority, that “[i]f an arbitrator or sponsoring organization mistakenly accepts jurisdiction, a party may either seek judicial relief to enjoin the arbitration or object to jurisdiction in the arbitration proceedings and raise the lack of jurisdiction as a ground for vacating the award”]; Delta Dental Plan v. Banasky (1994) 27 Cal.App.4th 1598, 1602 [affirming summary judgment for dental plan; opinion notes that the AAA advised the parties it would resume the arbitration unless there were a court order staying arbitration]; International Film Investors v. Arbitration Tribunal of Directors Guild (1984) 152 Cal.App.3d 699,704 [dismissing appeal from judgment following trial court’s denial of petition for writ of prohibition seeking to prevent commencement of arbitration proceedings]; N.A.M.E.S. v. Singer (1979) 90 Cal.App.3d 653 [reversing order dismissing petition to confirm arbitration award]; Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987 [affirming judgment denying petition to compel arbitration and preliminary injunction against arbitration proceedings initiated by seller during pendency of buyer’s action for damages on ground that there was no agreement to arbitrate because buyer was unaware of arbitration provision].)

Briggs is closely analogous. There, the arbitrator stayed an uninsured motorist arbitration pending a determination of the insured’s entitlement to workers’ compensation benefits. The insured sought a petition for writ of mandate, which the trial court denied on its merits. The Court of Appeal affirmed on other grounds, holding that “the trial court lacked the authority to review a discretionary, prehearing order of an arbitrator.” (168 Cal.App.4th at 1397.) As it explained, “the trial court conducted what amounted to a de novo review of an arbitrator’s interlocutory order, something it had no statutory authority to review for any reason.” (Id. at 1401.) Here, Patreon is effectively seeking similar relief: immediate review of JAMS’ interlocutory orders submitting the contested issues to the arbitrators for decision, rather than immediately granting Patreon’s objections to arbitration or its alternative request to issue a blanket stay of the arbitration proceedings pending a ruling on Patreon’s request for coordination of those arbitrations. Under Briggs, the Court lacks authority to review those administrative decisions.

Accordingly, the court DENIES Patreon's request for a preliminary injunction.

IT IS SO ORDERED.

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47 Comments:

Blogger Jack Ward July 29, 2020 7:51 PM  

And, this was the Superior Court of San Francisco! I may have to hoist an ounce or two of good Kentuckian in honor of the court!
Would not have believed it possible.

Blogger ChewbacaTW July 29, 2020 8:05 PM  

Am I correct in assuming that this means that the lawsuit against the 72 is also dismissed then? Or is that a separate action that will be dealt with in amending of the current arbitrations?

Blogger VD July 29, 2020 8:13 PM  

Am I correct in assuming that this means that the lawsuit against the 72 is also dismissed then?

No. But in combination with the previously released tentative ruling, it is a strong indication that a dismissal is coming soon.

Blogger Joe July 29, 2020 8:25 PM  

Vox - Will Owen be reimbursed for his 60K defending the 72 if the lawsuit is dismissed? Or is that something he would have to counter sue/settle in arbitration due to the grouping of parties?

Blogger VD July 29, 2020 8:27 PM  

No idea. That's outside my knowledge base.

Blogger Fozzy Bear July 29, 2020 8:38 PM  

Admittedly I’m an amateur with a half-baked legal education, but the next step after denial of a motion to dismiss, and dismissing an order to show cause, is often discovery, which usually means a larger settlement offer would be on the table. Since Patreon is the plaintiff here, it will be interesting to see if they try and appeal now, but since they don’t have precedent or law or their side, the only option available to them would be forum-shopping hoping for a sympathetic appeals judge.

Blogger Stilicho July 29, 2020 9:06 PM  

@Joe, I don't know California law, but a litigant can usually seek an award of attorney fees incurred in defending against a frivolous action (which Patreon's lawsuit arguably is), but it is a tough standard to meet and such an award of fees is fairly rare.

Another anvenue is pursuing such fees in a second arbitration (the filing of the lawsuit being another actionable breach of the terms of use, subject to arbitration). Again, however, I am speaking in general terms without specific knowledge of all the relevant facts of the case or the rules of the arbitration forum.

TLDR: Maybe. Probably worth trying.

Blogger Daniel July 29, 2020 9:07 PM  

Ouch. Maybe Patron should start a crowdfunđing campaign for their legal def-- oh.

Blogger Dole July 29, 2020 9:37 PM  

Pop corn stashes have been once again reduced.

Blogger Kraemer July 29, 2020 9:42 PM  

Daniel you're good at this cruelty thing. Keep it up

Blogger swiftfoxmark2 July 29, 2020 9:52 PM  

The noose tightens around big Tech. Their reign of terror is rapidly coming to an end.

Blogger My 1 millionth internet profile July 29, 2020 10:05 PM  

I'm searching for the story on this smackdown at Patheos, but nothing's coming up. Strange.

Blogger Reader July 29, 2020 10:48 PM  

Patregone

Blogger Akulkis July 29, 2020 11:50 PM  

>> And, this was the Superior Court of San Francisco! I may have to hoist an ounce or two of good Kentuckian in honor of the court!
>> Would not have believed it possible.


Under Trump, approximately 2/3 of the 9th Circus Court has been replaced with actual, legally observant judges. Even San Fransisco's judges have received the word that the days of riding roughshod in advancement of Maoist ideals are over.

Blogger Zeroh Tollrants July 29, 2020 11:51 PM  

I think most people are very interested in the Patreon lolsuit that shouldn't have ever been needed but boy, do we hope Patreon gets their butt smacked.

Blogger Gregory the Tall July 30, 2020 2:51 AM  

@Daniel
Yes, and they should do it on Indiegogo so that the funds cannot be misappropriated.

Blogger Scuzzaman July 30, 2020 4:08 AM  

Patreon rides the Tiger and finds that getting on the ride is easier than getting off it.

If only there were some ancient wisdom to warn people of such dangers.

Stupid has Consequences.

Blogger My 1 millionth internet profile July 30, 2020 4:26 AM  

@13- "No matter how hard I whip this mule, it stays dead. What ever shall I do now? I know, I will curse the mule!"

Blogger rikjames.313 July 30, 2020 6:37 AM  

I am not licensed in California, so my opinion is not informed.

Since this decision was based in state law, I suspect people on the good side will need to make sure their groups defeat 'complete diversity' to stay out of federal court.

I also think this makes it more likely the tech cos will change their agreements to pick a smaller jurisdiction where they can easily control both the courts, and more importantly, the arbitrator pools. I am still holding out for the Northern Mariana Islands, but I can see Marshall Texas or the Upper Peninsula of Michigan.

Blogger VD July 30, 2020 6:45 AM  

my opinion is not informed.

No, it's not. And if you took 30 seconds to do your homework on Westlaw before spouting off about your suspicions, then you would know that your opinion is not only ignorant, but incorrect.

In California, courts generally respect choice-of-law provisions within contracts that have been negotiated at arm's length. Nedlloyd Lines B.V. v. Superior Court, 3 Cal.4th 459, 464 (1992). Choice-of-law provisions will not be enforced, however, if "the chosen state has no substantial relationship to the parties or the transaction and there is no reasonable basis for the parties choice" or 2) the chosen state's law is contrary to the fundamental public policy of a state that has a materially greater interest in the issue at hand and whose law would otherwise apply.
Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 1002-1003 (9th Cir. 2010); Nedlloyd, 3 Cal.4th at 465.

We're dealing with contracts of adhesion here, not negotiated contracts. Furthermore, if you'd actually bothered to read any of the various Terms of Use, you'd know that Paypal is already taking this approach with their choice of Delaware law that appears to be based on the Discover Bank v. Superior Court ruling.

So, either make yourself useful and do the work or shut up and knock off the lawyerly posturing.

Blogger rikjames.313 July 30, 2020 7:04 AM  

VD wrote:We're dealing with contracts of adhesion here, not negotiated contracts. Furthermore, if you'd actually bothered to read any of the various Terms of Use, you'd know that Paypal is already taking this approach with their choice of Delaware law that appears to be based on the Discover Bank v. Superior Court ruling.

So, either make yourself useful and do the work or shut up and knock off the lawyerly posturing.


I wasn't clear enough. This decision was based in state court precedent. Federal court judges won't care very much about it, or contracts of adhesion, so I suspect the lawyers bringing these actions will make sure they stay out of federal court next time.

Our federal judges spend 75% of their time rubber stamping their magistrates in criminal actions and running criminal case hearings before the pleas. But they spend the other 25% of their time acting like a British law lord in the 1800s, mostly uncaring of statute or precedent until after their decision is made.

Back when I was in law school we spent a fair amount of time on contracts of adhesion, and then when the federal courts rammed through almost complete compliance with the Federal Arbitration Act, most of that concept went away in federal courts.

Blogger VD July 30, 2020 7:26 AM  

Federal court judges won't care very much about it, or contracts of adhesion, so I suspect the lawyers bringing these actions will make sure they stay out of federal court next time.

You need to stop "suspecting" and simply stop trying to opine in ignorance. You have literally no idea what you're babbling about here. Patreon is in state court, and every other tech company already specifies state courts and state jurisdictions in their TOS.

Blogger Damelon Brinn July 30, 2020 8:25 AM  

It's weird how often people on our side argue, essentially: "Our enemies have been stupid up to this point, but I predict that they will now start being much smarter, and then we'll be screwed."

Blogger Section 8A July 30, 2020 8:43 AM  

I would love to hear the office discussion of this at Patreon. The shrieking SJW faction vs. the reality based faction. (if the latter even exists at a place like that)

Blogger Ray - SoCal July 30, 2020 8:53 AM  

The 9th circuit was expanded under Jimmy Carter, that made it VERY to the Left, especially with the Blue Slip. It's better now under Trump. Another term for Trump should flip the court.

Trump has appointed 10 judges out of the 29 active judges. It's 16 nominated by Democrats, 13 by Republican Presidents.

I wish!
>Under Trump, approximately 2/3 of the 9th Circus Court has been replaced with actual, legally
>observant judges.

Blogger VD July 30, 2020 9:04 AM  

It's weird how often people on our side argue

They're surrender monkeys. They have no concept of ever winning anything. The noble, graceful defeat is the most they hope for.

Blogger peacefulposter July 30, 2020 9:14 AM  

How great would VD have been as a lawyer?

Blogger Paulito July 30, 2020 9:34 AM  

@24 I doubt there's any discussion. I'm sure the SJW types are shrieking, but if there are any reality-based employees, my bet is they're just hunkering down and keeping their mouths shut. And updating the ol' resume, if they're smart.

Blogger Silent Draco July 30, 2020 9:35 AM  

The order reads like the judge clubbed Patreon with a baseball bat, to prevent them from punching themselves in the face further. Patreon having broken their own written policy concerning arbitration, it sounds like the 72 have reason to add the incurred legal fees related to the lawsuit as additional grievances for arbitration.

I don't care about winning on Patreon's "own goal." It's a win. Next!

Blogger MJ Meyers July 30, 2020 11:10 AM  

The act of these 72 bears has done more in the battle against tech censorship than the entire Republican party and its millions of dollars in donations. I commend the bears for their bravery! I know it doesn't seem like much compared to the olden days of taking physical damage in combat, but social ostracism and wars of psychological attrition can take their toll. We stand with you!

In James O'Keefe's book, American Pravda, he notes a soldier's answer to his question about the difficulty of facing bullets versus facing a bureaucrat who might fire you: "A firefight lasts for minutes. The decisions you make, you make in seconds. And you know someone's always got your back. But in government, it takes years to build up a reputation and a ton of moral courage to put it on the line. Plus, you've got lots of time to stew about that decision, too much time."

Blogger RadixMalorum July 30, 2020 11:11 AM  

Damelon Brinn wrote:It's weird how often people on our side argue, essentially: "Our enemies have been stupid up to this point, but I predict that they will now start being much smarter, and then we'll be screwed."

Those are blackpillers and not people on our side.

The real argument will be: "I predict that they will now start being much smarter, so we'll adapt and beat them worse."

Blogger Darren July 30, 2020 11:18 AM  

These ACTIONS are more significant BigTeh than any weak purely-for-show promises made by Congresscritters or Senatwhores bowing down to them.

But it will of course never even be hinted at happening right now by MSNBCNNFOX because it might give the prison inmates some dangerous ideas...

Blogger Darren July 30, 2020 11:29 AM  

The private world is now fully infected by the disease cult of "speculation discussion" that oozes out of every major cable news channel. *Every*.

One thing Scott Adams got right: there is a whole lotta "mind reading" happening everywhere.
Especially on the innumerable time wasting panel shows -- "Our political adversary said Xyz about trivial subject Abc. With us for a half hour of one-sided biased emotional reaction and smearing of the character and mental capacity of our immoral enemies, we have..."

Blogger tdcommenter July 30, 2020 4:27 PM  

Redditors are predicting, well prjecting, that Vox Day and Randazza are there to co!lect legal fees from Owen & Beats then split the money, then leave them high and dry.

They really are a nasty pod of gammas.

Blogger Br1cht July 30, 2020 4:45 PM  

Behold, The Dark Lord Cometh..

Blogger James Dixon July 30, 2020 5:51 PM  

> Since this decision was based in state law, I suspect people on the good side will need to make sure their groups defeat 'complete diversity' to stay out of federal court.

What possible grounds could either party have for taking it to federal court? And what would be the basis for federal court jurisdiction if they wanted to?

Blogger Unknownsailor July 30, 2020 6:55 PM  

This made it to Tim Pool, he posted a video on it today.

I find it interesting that no one is mentioning Vox's involvement, he is literally He Who Shall Not Be Named at this point.

Blogger VD July 30, 2020 8:08 PM  

I find it interesting that no one is mentioning Vox's involvement

Fine by me. I'm not a principle and I'm not one of the lawyers involved. I'm just a humble consumer advocate.

Blogger Stilicho July 30, 2020 10:37 PM  

Darth Nader strikes again

Blogger Rabid Ratel July 31, 2020 9:08 AM  

@RadixMalorum, there need to be more removal of stupid before smart comes into play. The insane has no way of reducing their insanity by themselves.

Blogger Lionel Braithwaite August 01, 2020 1:27 PM  

So in other words, Patreon has to allow racist and sexist bigots to raise money with it, or get charged in court; yeah, I 'got' it. How amazing for you and others like you, Vox. 🙄

I wouldn't get too comfortable, though; a fair amount of news is indicating that the ace asshole you and others like you elected is most likely going to lose the election later this year, with the possibility of this ruling being challenged and rolled back, or stronger federal laws against racist and sexist speech being funded by crowd funding platforms tabled and passed-what will you do then if this happens?

@Akuklis, where the almighty frak did you get the idea that the left or anything that's liberal/progressive comes from anything Mao said or did?🙄

What Indigo Montoya (Mandy Patinkin) said to Vizzini (Wallace Shawn) in The Princess Bride about certain words being misconstrued is pretty apropos to your stupid comment.

Blogger VD August 01, 2020 4:04 PM  

So in other words, Patreon has to allow racist and sexist bigots to raise money with it, or get charged in court.

Not just get charged in court, lose in court. That's what "equal access" means. If you can't bar atheists, communists and homosexuals, you can't bar anyone else you don't like either.

Blogger Valar Addemmis August 03, 2020 1:23 PM  

"What Indigo Montoya (Mandy Patinkin) said to Vizzini (Wallace Shawn) in The Princess Bride about certain words being misconstrued is pretty apropos to your stupid comment."

An exhortation to *watch another movie* seems pretty apropos. That was a fine movie, but you don't need to work it into every blog response.

Blogger Akulkis August 05, 2020 11:38 AM  

>> What possible grounds could either party have for taking it to federal court? And what would be the basis for federal court jurisdiction if they wanted to?

Interstate activity. Company is in state A. User is in state B.

Blogger Snidely Whiplash August 07, 2020 4:46 PM  

@Lionel
I'm preemptively deleting your comments for being a useless, bitter, blackpilling gamma who wants to try to score emotional points against the propritor.
Don't even bother. If @VD cares, a prime example is in the spam folder.


The rest of you are welcome

Blogger Snidely Whiplash August 07, 2020 4:48 PM  

I mean, how weak and cowardly do you have to be to go back several days to plant your zinger where no one will ever see it?

Blogger Unknown October 26, 2020 7:42 AM  

Push me up against the wall and do dirty things to me. Click here and Check me out i am getting naked here ;)

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