Oct 29 (Reuters) - In a case against entertainment behemoth Live Nation (LYV.N), a U.S. appeals court has rejected a common corporate tactic to combat mass consumer arbitration and has cast doubt on whether companies can force consumers into consolidated arbitration protocols.
The 9th U.S. Circuit Court of Appeals ruled on Monday that Live Nation, the parent company of Ticketmaster, cannot compel its customers to arbitrate antitrust claims because Live Nation's mandatory arbitration provisions were too unfair to be enforceable.
As my Reuters colleague Mike Scarcella reported, the appeals court concluded that the mass arbitration protocol offered by Live Nation's arbitration provider, New Era, featured rules that were "so dense, convoluted and internally contradictory to be borderline unintelligible." (New Era disputed that characterization, insisting that its rules are "objective [and] easy to understand.")
...
In a concurrence, VanDyke said flatly, "The Federal Arbitration Act just does not apply to the type of mass 'arbitration' contemplated by Live Nation's agreements."
That has to be a chilling sentence for companies relying on batch-and-bellwether protocols to mitigate the time and expense of defending thousands of arbitration demands.
(Score: 5, Insightful) by ikanreed on Monday November 04 2024, @03:06PM (11 children)
The idea of arbitration was always, at its core, a good one. But only in negotiated contracts. If you're working with a specific counter-party and writing up a contract describing the unique deal between you and that counter-party, having a process to resolve the disputes arising from the unique details of your negotiation, because you're not going to think of everything. Fine. I get it. That makes sense.
For boilerplate contracts that your counter-party thinks everyone should sign exactly the same? Then the protections of common law for fair enforcement through precedent and uniformity of rights really ought to prevail. The need to "hammer out the unexpected details" are obviated by your counter-party's intention to standardize on their terms. It no longer makes sense.
(Score: 5, Insightful) by mcgrew on Monday November 04 2024, @03:39PM (3 children)
Boilerplate contracts that require arbitration should be illegal, especially on monopolies like Live Nitwit and Ticketmonster.
Impeach Donald Palpatine and his sidekick Elon Vader
(Score: 4, Insightful) by owl on Monday November 04 2024, @04:45PM
There, FTFY.
Yes, for any boilerplate "you must accept or not buy" contracts then arbitration should simply not be a legal dispute resolution process, no matter what "big-co" is creating the "you must accept" boilerplate.
(Score: 0) by Anonymous Coward on Monday November 04 2024, @08:39PM
We have a well documented process to change "should" to "shall"
(Score: 3, Informative) by Thexalon on Tuesday November 05 2024, @05:34PM
Not only should they be illegal, California passed a law making them illegal there. In one of the more significant SCOTUS rulings you've never heard of, AT&T Mobility LLC v Concepcion, the conservative judges in their infinite wisdom held that not only are binding arbitration clauses legal, they're legal even if the state makes them illegal. This combined with the fact that the megacorp who wrote the boilerplate contract usually gets to pick who the arbitrator is (and picks them based on their favorability towards the megacorp) means that the megacorps largely operate without any bounds of civil law when dealing with employees, consumers, and smaller suppliers.
This led directly to the case this summer where Disney tried to get out of a wrongful death suit because the deceased's next of kin had subscribed to Disney+ [mynews13.com], which had a binding arbitration clause covering any dispute arising between that individual and Disney. Which Disney backed away from not because it was legally incorrect, but because of the bad press.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 2, Offtopic) by krishnoid on Monday November 04 2024, @04:03PM (2 children)
Boilerplate? Maybe people could get together, *print* and *sign* these contracts, and mail them in to the legal department at the headquarters. That might be enough of a hassle to get them to shorten the size of the contract, or sell an actual product where the "contract" is terminated once payment is made. I mean, can a company proscribe the option of submitting a legal document on paper?
(Score: 5, Insightful) by owl on Monday November 04 2024, @06:59PM (1 child)
The legal dept. would probably like that (instead of, as you imply, disllike it).
They would have:
No, better to not sign and mail them to the legal dept's. The enforceability of them is more shaky if you don't do so.
(Score: 1, Insightful) by Anonymous Coward on Monday November 04 2024, @11:29PM
Sending a paper copy is doable/possible, but probably not a great idea. But not only for the reasons you state:
You could print it out, modify the contract to suit you (initial each place where you make a change and sign each page), then send a copy via a trackable mechanism that confirms receipt/delivery, that would obviate the enforceability issue you raise, except that you'd need an authorized representative of that corporation to endorse any changes you made and return a copy of your copy that's marked up appropriately by them as well. And good luck getting them to do that.
In the meantime, you can't use whatever it is that requires accepting whatever it is. Better to just close the tab and move on, IMHO.
(Score: 4, Interesting) by Tork on Monday November 04 2024, @04:48PM (2 children)
If I find some time I'll see if i can find that story, it was a hoot. I've been meaning to follow up and see if that caused any changes to how binding arbitration is executed. I honestly don't remember how it ended.
🏳️🌈 Proud Ally 🏳️🌈
(Score: 3, Informative) by owl on Monday November 04 2024, @06:54PM
IIRC, it was Amazon, and the pain of having to pay for each and every one of those arbitrations up front was sufficient that they removed the "must arbitrate" clause from their "click-n-run" contract.
(Score: 4, Informative) by NotSanguine on Monday November 04 2024, @07:01PM
Or the recent negative PR for Disney about a woman who died [nbcnews.com] after eating food at a DisneyWorld restaurant and then Disney tried to force arbitration because her husband signed up for a free trial of Disney+ several years earlier.
No, no, you're not thinking; you're just being logical. --Niels Bohr
(Score: 3, Insightful) by Thexalon on Tuesday November 05 2024, @02:28PM
I'm going to at least challenge that one: We've created a private industry big enough to cost about the same as the US federal court system. A lot of what arbitration is supposed to handle could be handled by small claims courts, which are often fairly cheap to run and sue in. And, critically, one of the differences between arbitration and the judiciary is that in arbitration one of the parties gets to decide who is handling the case, and guess what measurement they like to use.
The real reason courts and arbitrators get involved in the first place is that trust has broken down between the two sides of the contract. If there's still a lot of trust between the parties, and something unforeseen comes up, what typically happens is that there's a brief negotiation and the contract is amended. It's after one or both sides firmly believe the other is trying to stiff them that lawyers get involved.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 4, Informative) by VLM on Monday November 04 2024, @08:27PM (6 children)
The legal term is "consideration" and both the story and summary seem to be avoiding any mention of it, which is weird.
From a legal standpoint it's not a contract unless it includes consideration. This might seem obvious but its not a legal contract unless its a fair-enough trade. You can't just write a contract that totally Fs over the other side and have it treated legally like a contract. You can have total unconditional surrender in a peace treaty, but its quite literally not allowed in contracts by definition. There has to be at least an appearance of a fair trade.
Plausibly, totally F-ing over the customer for no reason other than they can because they're a monopoly violates consideration.
https://en.wikipedia.org/wiki/Consideration [wikipedia.org]
(Score: 3, Interesting) by owl on Monday November 04 2024, @09:37PM (3 children)
Not weird at all. Rather this is normal for the press. The reporters get some fact wrong everywhere, everytime. It is just that for all the myrad of stories where you do not have either the inside knowledge, or the field specific knowledge, to see the mistakes, you don't recognize the mistakes they make.
This is the basis for Gell-Mann Amnesia [epsilontheory.com], you recognize all the mistakes where you have the proper knowledge to see them, but then somehow forget that and assume the reporting was correct for the other stories where you don't have the proper knowledge to recognize all the mistakes.
(Score: 1, Informative) by Anonymous Coward on Tuesday November 05 2024, @07:40AM (2 children)
But they changed stuff and got stuff wrong.
(Score: 2) by owl on Tuesday November 05 2024, @01:16PM (1 child)
Yes, they with their English Degree thought themselves better suited to properly reword your narrative. And in the process converting a "rain causes wet streets" passage into a "wet streets cause rain" passage.
(Score: 1, Insightful) by Anonymous Coward on Wednesday November 06 2024, @08:51AM
If you're going to get crap anyway, you might as well get cheap crap.
(Score: 2, Interesting) by pTamok on Monday November 04 2024, @09:46PM (1 child)
I get the impression that you might not have understood what 'consideration' in legal contracts actually means.
It's about an 'exchange of value' - in other words, one cannot have one-sided contracts: there must be some exchange of value (usually monetary) for a contract to be valid and enforceable. This is true in, for example, English and American law, but not in Scots law.
More importantly boilerplate/standard form/shrink-wrap' contracts [wikipedia.org] are a legally grey area, because contacts are supposed to be agreed between equal parties - being presented with a 'take it or leave it' contract can give you rights you might not otherwise have had. Forced arbitration clauses could plausibly be argued as being unconscionable (See the section on contracts of adhesion in the Wikipedia article above).
(Score: 2) by VLM on Tuesday November 05 2024, @12:47PM
The way I see it, all three of us agree, you, me, and the AI journalist, although I thought it odd the journalist refused to use the legal term.
(Score: 2) by sjames on Monday November 04 2024, @10:12PM (1 child)
This all stems from Live Nation wanting to have their cake and eat it too. They want deprive their customers of the courts as a remedy in favor of their own pet arbitrator. They accept (no doubt grudgingly) that they'll have to pay for the arbitrator if they want to pick. They also don't want any class actions to hit the courts. But OH NOES, now our customers are suing us en-masse, it'll cost a fortune in arbitration. Quick! Arbitrator, jump through the hoop and invent a new class action arbitration procedure that favors us!
The courts at last shift their asses uncomfortably in their seats, rub the sleep from their eyes, and say "now you're taking the piss!".
(Score: 2) by Thexalon on Tuesday November 05 2024, @05:52PM
The ultimate goal of the legal departments of large corporations is to make the corporation completely immune from being sued or fined by the government for anything that they do.
And yes, an arbitration process that they can rig in their favor is basically immunity from lawsuits.
"Think of how stupid the average person is. Then realize half of 'em are stupider than that." - George Carlin
(Score: 1, Informative) by Anonymous Coward on Tuesday November 05 2024, @12:53AM (1 child)
In a very Disney-esque manner, from the Terms and Agreement with Total Wine [totalwine.com], just walking into their store they claim you must settle any issues through arbitration:
(Score: 5, Informative) by owl on Tuesday November 05 2024, @02:07AM
Gave up on Total Wine when I went to use one of their "discount coupons". Buried in the fine print, 2pt type on the back of the coupon is that the discount coupon only applies to wines that are priced ending in 9 (as in 12.99 or 22.99).
Then, you wander the shelves, and every single wine bottle in the store save for the schlep that won't sell anyway and that they want to be rid of, is priced 12.96 and 14.96 and 24.96 (note the alarming lack of a "nine" in the last position).
Have never been back to a Total Wine since.