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New eBay EULA Prohibits Class Action Lawsuits
First time accepted submitter dangthill writes "On August 21, eBay updated its end-user agreement by adding a binding arbritration clause. By accepting the new agreement, users forfeit their right to join class action lawsuits and instead must submit to arbitration. However, users may opt-out by mailing eBay a signed notice. eBay joins Microsoft, Sony, Electronic Arts, Valve and other companies attempting to prevent class actions after the Supreme Court of the United States ruled such tactics valid."
Does anybody else remember when kangaroo courts were something we associated with the commies?
is a freaking fat joke.
Doesn't like every other EULA out there do this as well?
More importantly, can you 'agree', participate in an auction, then drop out and then join a class action suit for the one auction you participated in before you dropped out?
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I imagine it's already appearing on many more transitory agreements. Corporations now have an out, thanks to Scalia and his buddies, that protects them from the possibility that they'll ever get hit with a lawsuit big enough to actually threaten them. It puts each and every person that they fuck over out on their own and arbitration biases everything in their favor.
I await the inclusion of anti-class action language in virtually all individual-facing contracts. It's virtually guaranteed to happen as there's no downside whatsoever for the corporations.
Class actions are less about justice but revenge.
If you win a big case you usually get like 100 bucks out of the deal (A lunch for two at a 2 star restaurant). The company need to pay the $100 * 1,000,000 plus legal fee. So they loose a lot of money, the victims let little if any (because they will appeal it over and over or just refuse to pay).
You you loose, the company looses. The only one getting big money are the lawyers, unless you happen to get a movie deal out of it.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
that would certainly be nice. The rights granted by any "consumer protection laws" in general should not be waivable. Not just class action suit. Because companies are known to be coercive about trying to force their customers to waive those rights.
I work for the Department of Redundancy Department.
No, but they risk nothing adding it everywhere. At best its an effective protection for company, at worst its just unenforceable and ignored. Only negative aspect is bad press in the internet, but since many other major players already did it, it will be pretty minor (and quickly forgotten).
You might be right about only the lawyers winning but the consumer has already lost if it gets to class action. In a system with forced arbitration the Corporation never loses and never has an incentive to fix a problem, at least with a class-action suit the corporation stands some small chance of losing and may attempt to fix the problem.
People complain about this all the time.
Just don't use the site.
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Yes, because punishing a company for business practices that provoked 1,000,000 people to require legal recourse is something we never want to do. Also, I don't know which is worse, your spelling or the fact that you pay $50/person for lunch.
Everything is better with chainsaws.
Class actions are less about justice but revenge.
I would agree that legal fees, as a percentage of settlement, do tend to be excessively high in class action cases; but some perspective is in order:
Because, as you note, the payoff for individual class members is fairly poor, consider why the class would participate: Because the alternative is nothing.
If all litigation is on an individual basis, simply ensuring that you commit only malfeasance too petty to be worth court costs is de-facto legal; because who would go after you?
Should a greater cut of the class action go to the class members? Sure. Is 'revenge' against malefactors a bad thing? Hell no. We usually call it 'punishment'. That's part of the point. Even if the wronged party gets nothing, raising the expected costs of committing a wrong reduces the odds that a value-rational company will try to pull one. This isn't a difficult concept.
"Class actions are less about justice but revenge."
Justice, punishment and revenge are nearly impossible to tell apart.. especially in the US judicial system.
Yes, but part of the point is the scummy company loses. Sometimes tort law isn't about recouping losses, but preventing unethical behavior in the first place. Frequently the classes of wronged people don't suffer much, but LOTS of people suffer. To me, it seems like a valid course for redress of grievances, and you shouldn't be legally allowed to sign away your rights.
What ever happened to those? Or were they traded away at some point?
Companies can put whatever they like in a EULA. Whether it will actually stand up to scrutiny is another matter.
There's a reason why eBay is allowing people to 'opt-out' -- TBH, if there _was_ a problem, and you sent them a letter threatening to attempt a class-action anyway (and could prove the means to fight it), you'd probably get a personal settlement offer straight away. Nobody's going to want to risk an adverse ruling on a challenge, since it well 'discourages' anyone from 'wasting' money launching a class-action and thus does it's job...
Does anybody else remember when kangaroo courts were something we associated with the commies?
You are a white American aren't you? Talk to a Black, Hispanic, Asian, or Native American, or a Jew, they can tell you loads of stories about how non whites and non Christians have gotten shafted in the US in kangaroo trials since before the Revolutionary War. Hell, even catholic whites used to be treated like a lower form of life.
It is not just about the money. Class action can also be used as a cudgel to change corporate behavior. It is one more weapon against heinous, negligent, and usurous actions.
Sorry we cheated, used, and/or sickened thousands, but nya_nyaa you can't touch us.
If you're not bent over yet, get ready for the rape. Don't worry, thete is plenty of TMZ and Fox News to distract you from the pain.
Silence is a state of mime.
You you loose, the company looses. The only one getting big money are the lawyers, unless you happen to get a movie deal out of it.
I can understand your point about lawyers, but part of the whole idea of class action suits are to bring an offending company to task.
Without class action, how else can that be done? Individual lawsuits? That has the burden of being able to afford to do such a thing in the first place, and the awards will never be large enough to act as a deterrent. Companies would just pay out and carry on. Prosecution by the state? That doesn't sound entirely appealing either, especially considering how cozy the government gets with large corporations.
It seems to me that removing class action suits just further insulates companies from their actions.
AFAIK no EULA or contract is above the law.
So without class action, what exactly is the reason a company won't try this:
1. Overcharge all customers by $30.
2. Refuse to refund the money.
3. If anybody goes to the time and expense of suing them in small claims court, concede and refund the money and the 1 hours' worth of the attorney's time ($300 or so).
This strategy is profitable so long as less than 10% of the customers affected don't go after them. And because it's not in fact worth my time to haggle over a $30 overcharge, chances are I won't. With a class action, somebody else can take the initiative, file the suit on my behalf, and I can get my $30 and the lawyers can get an extra $10 per person on top of that as punative damages. The only real loser in that scenario is the scammer.
I am officially gone from
this kind of clause are void here! we are "protected" from abusive clause. sadly, we are also excluded from many thing because of it :-p
While they can force you into arbitration rather then a class action suit, you still have the right to sue them as an individual, that right has not been taken away.
Of course, the costs involved are high, going up against a corporation with an entire team of lawyers is going to be very expensive, and they would most likely bankrupt an individual before anything ever makes it to trial. I also do not see to many lawyers taking this case on contingency as the potential to win is very very low.
I came, I conquered, I coredumped
Here is the situation for Germans:
As long as you are a CONSUMER, i.e. a private buyer or seller, that clause is invalid, since law requires such an arbritration clause to be settled in an entirely separate contract, and to be signed in person OR digitally as defined in BGB and SigG (there is almost no way to satisfy those requirements for a company like ebay or Valve at the moment).
If you are a COMMERCIAL seller (indication: you must accept returns), then the clause is indeed binding.
There is NO customer protection AT ALL in EU regulations in that regard.
The situation WILL differ depending on your country.
I'm surprised Big-Pharma hasn't taken a chance to jump on this.
the big problem is since the arbitration company is paid for by the company they will automatically be biased in favor of KEEPING THE CONTRACT.
so yes you could in theory sue over the arbitration not being fair but you agreed that the arbitration was BINDING.
Any person using FTFY or editing my postings agrees to a US$50.00 charge
I always associated kangaroo courts with Australians or perhaps Dr. Seuss
If you get $100 bucks you're lucky, my impression is that most are much lower. But as far as I understand, that's sort of the point of class action. Each person hasn't been harmed much and doesn't deserve a huge award, but if the company scams 1000000 people for $100 each they make a cool $100 million so the point is to punish the corporation. The problems are twofold:
1) The class action lawyers don't act in their clients' best interest. They want to rack up as huge a legal bill as they possibly can, knowing each client is again too small to complain about it since s/he's 1/1000000th of their case. Either by spending time in court or more commonly by settling in a way that's favorable to the lawyers and unfavorable to everyone else. Class actions should be done on commission, if you want to get paid more you have to settle for more. That'd put the incentive back in the right place trying to extract as much money as possible for your clients.
2) Extremely often the settlement doesn't actually involve cash, in involves a voucher or a discount for your next purchase even if you don't ever want to do business with them again. Not to mention people often never get around to spending them because they can't find anything they want to buy - even with the discount and it is forgotten or lost. Particularly for software the value is simply the sales value, it costs them nothing to churn out more copies. This could also be solved by requiring the payout be in cold hard cash.
Live today, because you never know what tomorrow brings
Sure. Do you want to pay the $50 mil to the congresscritter or shall I?
Technically the SCOTUS doesn't have jurisdiction in the U.S. either. They rule on *individual* cases not all cases in perpetuity. Just because they made a ruling that "user contracts can block class-action suits" does not mean any of the lower-level judges have to abide by it.
For example I might sue Ebay in the state of Maryland, win a class-wide lawsuit for all state residents, and on appeal by Ebay the Supreme Court of Maryland upholds the lower court's decision..... in direct opposition to the U.S. Supreme Court prior ruling.
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
which gives incentives to the company not to do shit that will get them involved.
Class actions are less about justice but revenge.
Punishment is not revenge. The point of class actions is to deter future bad behavior. I don't care if a class action suit makes the lawyer a hundred million dollars and I get nothing. If it stops the behavior in the future it's done its job.
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If a contract has an invalid clause, it can be ruled to be null and void in in its entirety, this is done PRECISELY to avoid what you said, try crap in your contract to see if you can get away with it and the judge will just award the case to the other side. It rarely goes this far because by that time a lawyer will advise the offending party to settle or risk getting their ass chewed out and usually companies listen.
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You may solo them, I prefer them in a group.
In August 2002, Craig Comb and two others filed a class action against PayPal in, Craig Comb, et al. v. PayPal, Inc.. They sued, alleging illegal misappropriation of customer accounts and detailed ghastly customer service experiences. Allegations included freezing deposited funds for up to 180 days until disputes were resolved by PayPal, and forcing customers to arbitrate their disputes under the American Arbitration Association's guidelines (a costly procedure). The court ruled against PayPal, stating that "the User Agreement and arbitration clause are substantively unconscionable under California law," noting their unjustifiable one-sidedness and explicit prohibition of class actions produces results that "shock the conscience" and indicate PayPal was "attempting to insulate itself contractually from any meaningful challenge to its alleged practices"
Do note that this ruling only applies to the law as it stands. Do note that the CPFB has the authority to overturn this ruling (according to the article, at least), and this practice, by adopting a regulation prohibiting mandatory arbitration clauses. In other words, if you are an American, and concerned about this practice, go to consumerfinance.gov and send them your concerns.
Can folks from other countries join in a US class action? If not, the point is moot.
For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
I'd happily chip in on that one.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Correct me if I'm wrong, but doesn't arbitration mean that the proceedings and decisions don't enter into the public record either? Monetary damages are one thing, but chances are, bad publicity is far worse.
This is a subject on which I have experience. I am an arbitrator. I occasionally am asked to decide consumer cases, but that is not my primary area. I have nothing to do with ebay arbitrations. I know a good bit about the American Arbitration Association.
The issues here are not simple, and there are rational arguments both ways. I'll leave PayPal out of this discussion, since they may be a different case. But, I think there are good things about arbitration from the consumer's end of things.
First, arbitration as structured under the ebay user agreement is straight up, no funny business. The arbitration process is administered by the American Arbitration Association, which is pretty widely respected as being thoughtful and above-board in their management of the arbitration process. AAA does a good job of training arbitrators. AAA does not direct or control the outcome. Think of them as the clerks office at the courthouse. They manage the process, keep records, recruit and train arbitrators, but do not get involved in deciding the case.
Keep in mind that an ebay transactions are likely to be small. A few dollars to a few hundred dollars. I'd guess that larger transactions are less common. How likely are you to hire a lawyer to file suit against eBay over their mishandling of a few hundred dollars? Would you really want to travel across the country for a day long trial over a $500 claim? Over a $100 claim?
By providing for disputes to be resolved by arbitration the following happens:
- The parties have a direct say in choosing the arbitrator. You can ding anyone on the list that you don't like the looks of.
- The proceedings are informal and expedited. This reduces the cost of getting to trial, a trade-off which seems appropriate to me for a case of modest size.
- The final hearing (i.e. the trial) takes place by telephone or is decided by written submissions. Again, would it be worth it to fly across the country to a trial over $500?
AAA does not decide the case. The arbitrator decides the case. This distinction is important. Most arbitrators are experienced, and widely respected, lawyers who have a practice focused on the area of the law in which they hear cases. Many arbitrators are practicing lawyers, who do a small number of arbitrations. Some arbitrators are full time neutrals. An arbitrator obtains future work as an arbitrator only being acceptable to BOTH sides of a case. In my experience lawyers talk to each other. An arbitrator who gets a reputation for making bone-headed decisions on a case will quickly find him/herself out of work. An arbitrator who gets a reputation for being the pawn of one side or the other is done, end of career as an arbitrator. Similarly, an arbitrator who simply "splits the baby" and not really making the hard call of who wins/who loses under the law is also likely to find that he/she has not future assignments as an arbitrator. It is not unusual for me to be selected to serve as an arbitrator by a lawfirm where I have previously ruled against one of their clients in an earlier case.
Yes arbitration does not provide the exact same trial process as a jury trial at the courthouse. But very few cases filed at the courthouse go to trial. Say, 5% or so. My experience in arbitration cases is that the vast majority of consumer arbitration cases do get to trial. There is genuine concern that we have created a litigation process so expensive that almost no one can afford it. Consumer arbitration under the AAA rules provides a way to get a small claim heard quickly, and at modest cost. I think this has real value.
Some will say that the restriction of class actions means that big companies are free to lie, cheat and steal. I've seen a big company facing scores of consumer arbitration cases under rules very similar to those set by ebay. The company's cost of trying those cases is much higher than it would be under a class action. Plus, under a class action one trial and you are done with every one. In this process, the company has to try or set
I had this problem too after many years of buying junk on ebay, unfortunately many otherwise good sellers will only take paypal :(
Solved by:
-Call bank, create new checking account
-(optional) create short name/nickname for account for use on website/apps/etc. (suggestions: "I hate paypal" or "paypal sucks" or "***** paypal")
-Ensure this account is not linked to any other account in any other way at all. No overdraft, no protection, no nuttin'. Triple verify this with your bank, many will "helpfully" set these up by default.
-transfer $25 or whatever minimum is to account
-continue to use credit card on every purchase (paypal will use 5000 different website tricks to make sure this is not your default method, so you have to select it every time, annoying as hell but whatever)
-$profit$ by not risking more than $25 to their crappy crooked methods
The bank employee that did this for me over the phone was not surprised at all, they had done similar for people several times before.
What little is left of American mythology is reflected in the good intentions of those who participate but do not have the same agency, full force of legal standing nor full constitutional rights on the field of play. Arbitration is the legal free-waiving of your constitutional rights granted all American citizens to enter into another domain of statutory law in exchange for the privilege of performing a transaction in a business domain with agreed-in-advance inconsequential outcomes.
The one arbitration I've successfully participated until conclusion was fraught with series of cascading hoops through which evidence had to be gathered, lifted and passed through to make it into the final judgement and subsequent award. Evidence was treated as property regardless of condition and sought only to separate vested ownership interest. Award of compensation, renumeration and damages followed the property and there did not exist any claim to ' make the parties whole' or ' judge wrongdoing' in a penalty phase. The lasting experience was an arbitration which simply unwound transactions on a case by case basis with monies in dispute limited to transaction values and penalties for behaviors which in a US court might rise to civil or criminal were simply beyond the jurisprudence of the process.
Class actions are supposed to be deterrent. If company has to pay $100 * 1000000 + legal fee, then they will think twice before pulling the same shit again.
If some body or a group of people are really serious about an issue that arises from this they can take eBay to court for the EULA itself. If I bury a line in my product EULA that I have the right kill all users and (even) 1% miss it and accept the EULA it doesn't mean it can stand in a court of law.
RGdot.com
I recently started selling on Ebay. Having previously used the account mostly for purchases, I never really worried much about feedback. When I began paying more attention to it, I realized that all my purchases were visible to others. This immediately pissed me off. My purchases were nothing unusual, but anyone could peruse them at will, potentially connecting them to my actual identity.
I called Ebay Support and complained. They informed me that I could make my purchases semi-private, but it would disable my ability to sell. So, I could not make my purchases private while keeping my sales transparent. They recommended I start a new account used only for purchases, with a user-ID non-descriptive of my actual identity. I continued to complain and argue (yes, futilely) and said I was nearly inspired to start a blog on this disturbing policy and also that a class-action lawsuit seemed a real prospect.
Most Ebay users never consider when registering that their purchases will be totally open for anyone to see. Because of this, the names they create are often related to their real identity. I began researching a bit and quickly found instances where items like sex-toys were openly displayed in user's public purchasing history. In another instance a user had complained that their kids were able to anticipate Christmas gifts because they had known their parents Ebay ID.
The complaints are many and not limited to privacy, but that is primarily what has concerned me. Ebay/Paypal is a shitty company. They are directly misleading with listing-fees too. When I complained about this, they said it was all in the user-agreement. My response was to ask what operating system the rep was using, which was Microsoft. I then asked if she had read the entire Windows user-agreement, to which she predictably answered "No". I reminded her that she was using it despite this admitted fact. I am not always intelligent, but I think I am adequately enough to see a listing-fee before agreeing to it. But I've definitely had a few surprises and unexpected fees along the way.
Anyway, I am not surprised about this news. I wish their were viable alternatives, but it looks like shitty service is the future. It would take more than a tremendous effort to get such companies to reconsider their abusive policies. Seems all we can do now is give them a class-action FUCK YOU!
Forward! -- Emperor Norton, 2012
The idea behind "the company loosing" is to de-motivate it and other companies to do the same.
For example, if paypal takes everybody's money away to a total of 50M, and looses 100M in a class action lawsuit, they'll certainly think twice about doing it again. And so will other similar companies.
In many cases, justice is about setting an example and de-motivating others from doing the same (bad) thing.
Since English isn't your first language, I hope I'm helpful in pointing out that "loose" means "set free". E.g., "he looses his dog every morning. Cry havok, and loose the dogs of war". The word you're looking for is "lose."
I blame Suse, (and they also speak in a different native tongue). When I gave it a try ten years ago, a warning said "you may loose data". I wonder if that typo is still there?
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Ebay insists you opt-out by paper mail:
You must mail the Opt-Out Notice to eBay Inc., c/o National Registered Agents, Inc., 2778 W. Shady Bend Lane, Lehi, UT 84043.
This appears to be somebody's house.
Sure. Do you want to pay the $50 mil to the congresscritter or shall I?
Maybe we should have a non-profit consumer protection lobby that accepts charitable donations with which to bribe- I mean, "lobby" to protect us from bloodsucking corporations?
Thank you, Edward Snowden.
"Arguments from authority are worthless." —Carl Sagan
At this point, why don't they just modify their EULA to nullify every consumer protection law and civil right ever written since it appears that EULAs can override any law or right
How is that better than them paying something that approximates the actual damage they caused? I've never gotten a class action settlement notice that was worth doing anything about it. Woo! A check for 23 cents! Into the shredder.
As I understand it, a few people actually bring the lawsuit, and get actual money. Say $20,000 each. Then a million or so people get 23 cents each, and the lawyers get $500,000. This is a boneheaded system that works for the lawyers and really no one else. Instead, give each of the million people the same $20,000 the filers get. I know. OMG, that'll put companies out of business! Yes. Yes, it will. Perhaps screwing over a million people should put companies out of business. Perhaps then they'll stop doing it.
Until then, class action lawsuits are merely a way to make lawyers rich.
You may not win big if you are in on a class action, but what is more important is that the bad corporation loses. Class action suits are not about getting your $100 in the mail, but to prevent the corporation from selling automobiles that blow up or from claiming that cigarettes are healthy or dumping waste into the rivers. Companies used to treat these individual cases as just a minor cost of doing business and only the big class action suits made them change their ways. With binding arbitration the companies can go back to ignoring the health and safety of its customers and employees again, with the few arbitration cases that it loses being only a minor cost of business.
It's better for some lawyers to get a lot of money than to let these corporations ignore the law with impunity.
Most civil laws in the US and around the world rely on lawsuits. Someone has to bring a case against someone else and show that the law was broken. Regulators very often do not have the power to act as the police and bring their own lawsuits, and when they do have that power they may not have the resources. The regulators also depend upon their being an aggrieved party to use as a witness. Class action lawsuits assist in enforcing the laws here because it means that even in the case of small petty theft by a corporation (false advertising) there will be enough plaintants to bring a case. Individuals can not afford to bring lawsuits on their own against a large company or government entity. Binding arbitration undermines the laws because it eliminates the lawsuits, and will also eliminate the witnesses who will be prevented from testifying if they signed an agreement or settlement.
With vouchers and the like I think this happens because the cases are settled out of court for a far less amount than if there had been an actual judgement of wrongdoing. But even then most of these settlements will require the defendant to change their behavior (stop lying in their advertisements, stop overcharging, pay for toxic cleanup, etc).
I never used paypal. I used ebay once then canceled my account (after arguing with the rep that I didn't care if this messed up my once-only buyer reputation). I will never use ebay if I must also use paypal or some other faux bank or internet payment service. Also there's not much reason to use them anymore, they have ceased to become merely a go-between for non-commercial sellers to find customers but have become a marketplace primarily for commercial sellers. I'd rather head to Amazon or something like that if I'm going to buy from a business.
What e-commerce? Many people ignore that altogether. Those that don't will often go to direct sellers. And paypal is almost always a bad idea to use, very unsafe, very unsavory. Ebay requires paypal or similar payment services for many services (if they buyer decides not to accept credit card transactions). So it's more convenient if you're a smart person who avoids paypal to also avoid ebay.
'...Supreme Court of the United States ruled such tactics valid...'
The SCUS may have ruled such tactics valid, but remember, they are only valid in the US, they cannot be enforced outside of the US!
Michael
http://s1.sfgame.us/index.php?rec=58163
Wow - a slashdot topic that I actually know what I'm talking about and I'm late to the party.
I've worked for 15+ years for a company that administers class action settlements - so I have a definite bias here.
Some are BS settlements/lawsuits involving technicalities where there were no actual damages (does it really matter if a tool is made in America - or assembled in America from 30% parts made here and 70% parts made overseas). This makes up around 10% of the cases that I've seen.
On the other hand - there are a lot of instances where they are not. It's easier to steal $1 each from 1,000,000 people than it is $1,000,000. Whether or not it's underfilling product - conspiring with competitors to fix prices - or deliberately selling defective products - they aren't grey issues.
Companies win with arbitration waivers because: 1) the government cant find everything (thing the SEC and Bernie Madoff); and, 2) no lawyer is going to take your case. Consumers will be hurt because of these decisions. Sure - 90% of companies do the right thing. That leaves the 10% hiding unsavory business practices.
For the people who say "What class action hasn't resulted in a windfall for the lawyers involved and a token payment for any plaintiffs?" - there are a lot. You don't here about them because it's only the settlement where a check for $0.25 was mailed that makes the news (a practice I tell my clients not to do). It's been a great marketing campaign by the US Chamber of Commerce.
I can send out letters to 1,000 people -- telling them each that they'll get $1,000 - and only 100 will respond. That's a real $1,000 by the way. There are times when you cant give away money.
If you don't like a settlement - write the judge. Object. Complain in writing. Better yet - show up ion Court at the hearing and ask to speak. A full Federal judge will let you talk about the evils of the settlement as long as you reasonably want. Maybe you'll influence them - who knows - but they'll let you talk and let your message get into the record. Judges actually care about these comments.