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Tuesday, July 20, 2021

Another retreat from arbitration

Now it's Amazon that is deciding to run away from arbitration:

We wanted to let you know that we recently updated our Conditions of Use.

One of our updates involves how disputes are resolved between you and Amazon. Previously, our Conditions of Use set out an arbitration process for those disputes. Our updated Conditions of Use provides for dispute resolution by the courts.

Please visit https://www.amazon.com/conditionsofuse to read our updated terms in full.

As always, your use of any Amazon service constitutes your agreement to our Conditions of Use.

Thank you,

Amazon 

There are several reasons for this. One, of course, is the fact that the companies now know that arbitration can cost them tens of millions of dollars even when the arbitration companies and the arbitrators are bending over backward for them and breaking both the arbitration rules and the law in their favor. Even when they win, the state courts won't uphold their awards because awards against consumers are egregious violations of the California law where most of them are headquartered.

The second is that California is tightening its grip on the arbitration companies. The arbitration companies keep trying to worm around the law, so the legislature keeps passing new and more rigorous laws, such as SB 762, which has been passed due to the way JAMS has repeatedly tried to wiggle around the requirements of the previous year's SB 707. It wouldn't surprise me in the least if the California legislature eventually strips the arbitration companies of the legal immunity that the courts have conveyed upon them through case law.

But the third and most important reason is that the U.S. Appeals Court for the Second Circuit in New York recently agreed to review a lower court’s ruling that Section 230 of the Communications Decency Act protects big tech companies from civil rights liability. The big tech companies lean very, very heavily on this ruling, and it's probably not going to hold up to the Appeals Court review, being a very stupid ruling that has permitted the tech companies to play editor without being liable for an editor's responsibilities.

The case of Domen v. Vimeo came about after Vimeo, an Internet video-hosting company, terminated Church United’s video streaming activities after it featured videos of five men and women who left the gay lifestyle to pursue their Christian faith. Vimeo claimed that its terms of service bar streaming videos that promote sexual orientation change therapy. Church United is led by Pastor Jim Domen.

A federal district court had previously held that Section 230 exempted firms such as Vimeo from civil liability and a three-judge panel of the Second Circuit upheld the lower court’s ruling.

However, as a result of the July 16 decision, the panel’s ruling will be reheard before the entire Second Circuit. The Second Circuit covers six federal district courts in three states, including New York, Connecticut, and Vermont.

“This ruling puts Section 230 immunity in the crosshairs of judicial review. We suspect that the en banc court recognizes that Big Tech is not exempt from state and federal civil rights laws,” said attorney Robert Tyler, general counsel for the California-based Advocates for Faith & Freedom. His law firm, Tyler & Bursch, represents Pastor Jim Domen and the California-based Church United nonprofit.

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22 Comments:

Blogger Valtandor Nought July 20, 2021 5:42 AM  

I'm a little bit at a loss here. How does an overturning of the Section 230 ruling referred to make court proceedings more attractive relative to arbitration?

Is it mostly that erosion of their so-called safe harbour protections makes them anxious to ensure that their decisions withstand judicial scrutiny, and the best way to ensure that is to have the decisions made by a proper court in the first place?

Blogger JC Skinner July 20, 2021 5:57 AM  

I thought you might find that interesting.
If Amazon can't afford to risk arbitration, no one can.

Blogger RedJack July 20, 2021 6:52 AM  

Interesting. Seems arbitration is to risky, so go to the legal courts.

Blogger Doom July 20, 2021 6:53 AM  

Yeah, got my notice. What is funny is, it won't matter. They can pick any forum they want, and try to ramrod it through. But, when you do evil, eventually, you pay. Are any big tech not evil? Keep lighting the matches. I may be burned too, but, go ahead. Do what is right. I'll suffer their barbs and torments gladly. Dying with the beast is... good enough. I just hope to see the lights go out in it's eyes before I can't see. So... hurry up.

Blogger Unknown July 20, 2021 7:04 AM  

Valtandor Nought wrote:I'm a little bit at a loss here. How does an overturning of the Section 230 ruling referred to make court proceedings more attractive relative to arbitration?

Is it mostly that erosion of their so-called safe harbour protections makes them anxious to ensure that their decisions withstand judicial scrutiny, and the best way to ensure that is to have the decisions made by a proper court in the first place?


Federal court is very expensive and time consuming.

Let's say 230 immunity does not exist but arb is still a thing. Facebook decides to nuke all the discussion space and usual potential customer contact channels for your custom woodworking business because you said something in your personal life to support Trump.

Under arbitration you get a lawyer, file the form and pleadings, have the very limited discovery AAA/JAMS allows, and are in front of an arb within a year or so. Maybe 30-60 grand in legal fees.

Same case in federal court, at the end of that year we are doing the second round of production requests and scheduling depositions. A few motions. We are nowhere near court and you have already paid out over 75k.

Businesses like arbitration for two reasons: 1. They can easily set a reserve for each case because the expenses are known (pretty closely), and the money judgments and exposure are easier to predict; and, 2. Because discovery is so limited there is little chance of something getting out to harm the corporation's interest or cause a firestorm of new suits.

Blogger SciVo July 20, 2021 7:08 AM  

@Valtandor Nought:
I'm a little bit at a loss here. How does an overturning of the Section 230 ruling referred to make court proceedings more attractive relative to arbitration?

The juxtiposition is that Big Tech is caught between the Scylla of arbitration and the Charibdis of re-examination of Section 230. They have no good options. That's the point.

Blogger Doktor Jeep July 20, 2021 8:12 AM  

Surprised it took this long, given that the best weapon of large organizations has always been a matter of "he who can afford more lawyers".

Blogger Silly but True July 20, 2021 8:24 AM  

It’s always good when our society remembers it didn’t want any kings, separate under the law. When courts are starting to see NCAA as an illegal anti-competitive monopoly, and the DoJ recognizes the real estate industry engages in illegal anti-competitive anti-trust activities such as forcing buyers to pay sellers’ agents’ commissions, then we’re on to something. Arbitration should be a negotiation wanted by both parties, because court is generally the arbiter of last resort; that corporations no longer want arbitration shows just how much influence consumers have finally attained.

Blogger Akulkis July 20, 2021 8:29 AM  

The fact that the 2nd Circuit is going to give this case an en banc hearing means that the duties and enforcement parts of Section 230 will finally be realized in practice.

Blogger Ominous Cowherd July 20, 2021 9:03 AM  

RedJack wrote:Interesting. Seems arbitration is to risky, so go to the legal courts.
Now we need to make the courts risky, too.

Blogger MichaelJMaier July 20, 2021 9:26 AM  

How much of this is driven by the ease of the people to obtain information, as opposed to having to rely on the media or the legal system to share it?

Blogger BeatYourHeadIn July 20, 2021 11:32 AM  

Watching Californian courts reign in the tech cartels is why I no longer blindly decry communism in its entirety the way I used to.

Sure there's subversive convergence within the movement -you only need to lurk on VP here to learn what those things are- but the same can be resoundingly said of free market capitalism.

I understand the wisdom of a national government bringing a wayward merchant class to heel through legal and marital force. I understand the necessity of transplanting dense urban population into rural productivity. These are major planks in the communist manifesto.

I'll keep railing against the subversive stuff like the destruction of the family unit, but I will admit where the commies get it right.

Blogger SciVo July 20, 2021 11:38 AM  

Ominous Cowherd:
RedJack wrote:Interesting. Seems arbitration is to risky, so go to the legal courts.
Now we need to make the courts risky, too.


The courts were already risky; that was the reason for arbitration in the first place. All we have to do now is sit back and laugh with a hard cruel smile. Because evil is getting pinched.

Blogger Dafo July 20, 2021 11:44 AM  

Let the class actions flow... the dam is about to burst.

Blogger Matt Harris July 20, 2021 12:10 PM  

Interesting that while they are getting rid of arbitration, they don't want to face juries either. From the Conditions of Use linked:

"Any dispute or claim relating in any way to your use of any Amazon Service will be adjudicated in the state or Federal courts in King County, Washington, and you consent to exclusive jurisdiction and venue in these courts. We each waive any right to a jury trial."

Blogger Mathias July 20, 2021 1:38 PM  

Matt Harris,

Ha, they think you can waive your right to a Jury Trial? I'm sure that will hold up to strict scrutiny + favoring the adhered. Not.

Blogger Melvin July 20, 2021 3:30 PM  

Why didn't Jeff just stay up there forever beyond the clouds?!

Blogger Solon July 20, 2021 4:09 PM  

Exactly, Mathias.

Amazon can't remove your right to a jury trial, not even if you read the ToS and agreed to them. They're just hoping you don't know your rights, because they are well aware of the devastating possibility of a jury nullification situation.

Blogger Nihil Dicit July 20, 2021 4:42 PM  

I understand the necessity of transplanting dense urban population into rural productivity.

Hell no. Parasites are parasites, regardless of zip code. Keep 'em walled in their self-selected ghettos.


The second is that California is tightening its grip on the arbitration companies.

Given all the big money clients they're currently losing, it might be a moot point. JAMS must be bleeding millions here.

Blogger Paulito July 20, 2021 5:17 PM  

@16/18 You can waive your right to jury trial, certainly. There's even a legal name for the contractual clause because it's pretty common: Contractual Jury Waiver. The only issue is whether accepting a TOS equates to signing. Estate law has contractual jury waivers that are not in signed documents, so the issue isn't as clear-cut as you make it seem. For the record, I am against this being a thing, but whether I like or approve of something has no bearing on whether it's legal or not.

Blogger OneWingedShark July 20, 2021 5:54 PM  

Paulito wrote:@16/18 You can waive your right to jury trial, certainly. There's even a legal name for the contractual clause because it's pretty common: Contractual Jury Waiver.
Does your bullshit 'contract' supersede the Constitution?
Amendment VI
In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

Amendment VII
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

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