Forced Arbitration Isn't 'Forced' Because No One Has To Buy Service, Says AT&T (arstechnica.com)

An anonymous reader quotes a report from Ars Technica: AT&T is denying that its contracts include "forced arbitration" clauses, even though customers must agree to the clauses in order to obtain Internet or TV service. "At the outset, no AT&T customer is ever 'forced' to agree to arbitration," AT&T Executive VP Tim McKone wrote in a letter to U.S. senators. "Customers accept their contracts with AT&T freely and voluntarily; no one 'forces' them to obtain AT&T wireless service, DirecTV programming, or other products and services." AT&T was responding to concerns raised by Sens. Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Patrick Leahy (D-Vt.), and Edward Markey (D-Mass.), who previously alleged that AT&T's use of forced arbitration clauses has helped the company charge higher prices than the ones it advertises to customers. While AT&T is correct that no one is forced to sign up for AT&T service, there are numerous areas of the country where AT&T is the only viable option for wired home Internet service. Even in wireless, where there's more competition, AT&T rivals Verizon and Sprint use mandatory arbitration clauses, so signing up with another carrier won't necessarily let customers avoid arbitration. One exception is T-Mobile, which offers a way to opt out of arbitration. The terms of service for AT&T Internet and DirecTV require customers to "agree to arbitrate all disputes and claims" against AT&T. Class actions and trials by jury are prohibited, although individual cases in small claims courts are allowed. AT&T doesn't offer any way to opt out of the arbitration/small claims provision, so the only other option is not buying service from AT&T.

Comments

No one is forced my ass

[Anonymous Coward]

In a lot of markets, AT&T is part of an oligopoly or even may have a monopoly. High speed internet is necessary for a lot of people, especially if they need it for their jobs or classes. When there are very limited options for service, AT&T and their competitors might all include forced arbitration clauses. Get rid of the monopolies and oligopolies, and perhaps AT&T might have a point. Right now, the statement sounds like something I'd say when I'm trolling. No one is forced my ass. Bring in more competition, then we'll talk.

Re: No one is forced my ass

[Anonymous Coward]

Maybe for rural farmers in nowhere Indiana. For the rest of the developed world, internet is a necessity to conduct business and live a modern life.

Re:No one is forced my ass

[jonsmirl]

Has anyone here ever received anything of value from a class action lawsuit? My best win so far is a $10 check. Most of the time I never received anything, and a few times I have received useless coupons.

On the other hand the lawyers doing these suits get paychecks of $10M or more. And where do you think this $10M comes from? It is being added to the price of the product. I think it is probably more cost effective for consumers that these class actions are stopped. I don't really see them as helping consumers, instead they just enrich lawyers.

I think it is far more effective to bombard a company with a thousand individual small claims. That makes them have to show up which costs them a lot of money. And get this -- you can actually win in small claims. My best win in small claims is over $5,000. Several times the judge has just ripped up their thirty page contracts, asked their rep if I have been harmed, and when they say yes, he awards what I am asking for. These small claim judges work more on what is a reasonable outcome, not on what is contained in a lopsided thirty page contract which the consumer is powerless to alter.

In one case the judge even yelled at them for putting such ridiculous clauses in the contract. That was with ADT which has a clause stating that if you moved the contract automatically extended three years. I had moved three times so my original contract had extended to 12 years. Then I moved into a high rise which did not allow alarms and tried to terminate. ADT demanded over $10,000 to terminate my contract. They ended up with nothing.

Re: No one is forced my ass

[ringringbeep]

I bought internet in Rural PA last year. Verizon, AT&T, and a regional company were the only options. After the local company did a survey and determined they could not get a line to me, I called AT&T. The AT&T customer service rep looked up my address and said that's in a Verizon area, can I transfer you to Verizon support?" Having worked for AT&T just after deregulation, I was curious. So instead of saying, "ok" I asked some questions. AT&T and Verizon internet have worked out regional monopolies. Choice is a farce in these areas, and so an arbitration agreement is forced upon any customer who "wants" internet service. Take our terms, or have no internet. Cellular data was also abysmal in the area. On some days climbing out onto th me 2nd story roof was the only way to get email. So I "agreed" to Verizon's land line terms of service.

Re: No one is forced my ass

[mysidia]

having an internet connection is not a right.

It is enough of a right that the supreme court ruled Social networking website bans for past sexual offenders unconstitutional.

Re: No one is forced my ass

[alexgieg]

Here's a better analogy. What if ever single company you applied for included a job application form in which in agreed to solve any dispute about discrimination through arbitration? And then, when you got the job, the contract had a clause in which you also agreed to solve any employment dispute through arbitration? Should that be legal? After all, you're not obliged to work for a company that does that, you can chose any other one. No company left not doing it? You can start your own business! Except all the businesses you need to deal with so as to be able to have one of yours have similar clauses in their contracts. Well, you're not obliged to have a business! You can... er, become a beggar, I guess?

No system of laws should allow contractual clauses to overcome legal rules. The hierarchy of authority should *always* be that only what *isn't* determined by a law is free to be contractually determined between parties. Everything else, the law should take precedence. Don't want that law? Vote a legislative body that will clearly and unambiguously revoke it. But don't insert in the system "option" stuff. That's a recipe for all kinds of extremely damaging slippery slopes.

Re: No one is forced my ass

[Antique Geekmeister]

I'm afraid that there are too many cases where "just get another job!" has been an excuse for systemic Gender abuse, racism, and homophobia in the workplace are merely examples. It's also included unpaid overtime, nepotism, sexual harassment, and employment fraud. Forced arbitration, which is what this inherently is for all employees, provides much stronger benefit to the larger legal entity, who is typically the entity that selects the arbitrator. These arbitrations are also typically sealed: the evidence submitted to them is not available to any other possible plaintiffs.

From my experience with corporate lawsuits, they're workable for modest cases where the cost of a lawsuit would outweigh the cost of any reasonable settlement. But they have no legally binding force for anyone but the plaintiff and that company's relationship with that particular plaintiff. For widespread workplace abuse, they're not helpful at stopping or preventing the abuse as a matter of policy.

Re: No one is forced my ass

[mysidia]

Demanding that someone subsidize or provide you pen and paper is not.

I just demand fair, reasonable, non-discriminatory, and equitable access to purchase pen and paper (Or Internet access) without
being requested or required to sign over or waive any basic rights in the process, including the right to have disputes between me and a vendor mediated by the courts, and to pursue class action if damage or deception is committed against a large number of customers .

No *customer*

[kav2k]

[...] no AT&T customer is ever 'forced' to agree to arbitration [...]

[...] no one 'forces' them to obtain AT&T wireless service, DirecTV programming, or other products and services.

So basically, you only qualify as a customer if you do use products or services (that require agreement), but no customer is ever forced? I fail to see the logic here.

quite peculiar

[gsslay]

Why is it that American law permits clauses in contracts that deny people access to the law of the land?

It's quite peculiar. In the UK any contract that attempts to limit a consumer's statutory rights and legal protections is automatically void. It cannot be done. This is why most sales contracts actually state that "This does not affect your statutory rights", because it cannot.

Re:quite peculiar

[DRJlaw]

The courts frequently strike down such arbitration clauses as such clauses are direct unilateral violation of rights in a given jurisdiction.

IANAL

That's obvious, because you're wrong.

The Federal government passed the Federal Arbitration Act, which authorizes such arbitration clauses, and there's a pesky thing in the Constitution called the Supremacy Clause. AT&T itself won a U.S. Supreme court case that said that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-wide arbitration, on the basis of statutory interpretation, since nobody seriously questioned that wireless contracts were within the scope of the Interstate Commerce Clause.

Specifically,

Relying on the California Supreme Court's Discover Bank decision, [the Ninth Circuit Court of Appeals] found the arbitration provision unconscionable because it disallowed classwide proceedings. The Ninth Circuit agreed that the provision was unconscionable under California law and held that the Federal Arbitration Act (FAA), which makes arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract," 9 U. S. C. sec. 2, did not preempt its ruling.

Held: Because it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," Hines v. Davidowitz, 312 U. S. 52, 67, California's Discover Bank rule is preempted by the FAA. Pp. 4-18.

IAAL.

The Canadian Supreme Court disagrees

[davecb]

In cases where the company is breaking Canadian law, contract language to force arbitration in California is null and void. A class action about “Sponsored Stories”, which uses the name and picture of a customer "without consent for the purposes of advertising" will go forward.

The legalese is summarized at http://www.slaw.ca/2017/06/28/... and the full case is https://www.canlii.org/en/ca/s...

It's primarily an arguement about choice of forum (country) in a contract.

Everyone knows this is bunk.

[Cyberpunk Reality]

AT&T has sued cities to prevent competition. This is part of the broken pattern here in America. Powerful companies openly flout the law, and then find some technicalities to hide behind. Everyone knows it's BS, and the only question is how long it can go on before the public breaks out the guillotines and starts setting things on fire. Those profiting are betting the answer is "long enough to flee and live like kings in Patagonia".

Re:Notice that the only Senators are Democrats

[DontBeAMoran]

Rule of acquisition 17: A contract is a contract is a contract... but only between Ferengi.

American law?

[Anonymous Coward]

We are a plutocracy in this land. Shit like this is forced on us without a peep from most people because they are being distracted by other issues. They don't care until the day comes that AT&T screws them over and discover that they have no choice but to pay up and shut up.

While they are being gouged by the ISPs and given third world quality service, they are all being distracted by the latest tweet from the Big Orange small fingered vulgarian in the Whitehouse. While my state legislature (mostly Republicans) are being "lobbied" by these ISPs to keep their un-free markets and not-capitalistic business models, they are arguing over laws about who can use what bathroom depending on the sex on one's birth certificate.

And my fellow citizen's allow themselves to get sucked into a moronic fight.

That's the state of the American people. And we blame immigrants for our declining standard of living.

Utility, not a luxury

[Roger W Moore]

having an internet connection is not a right. its a luxury good that you choose to buy or not.

No, it is a utility just like gas, water and electricity. In theory, you can survive without all of these but you would be camping in your house and while an internet connection might be regarded as a luxury while camping it isn't really a luxury anymore for everyday life. In addition, the cost of duplicating the infrastructure to each house means that at a local level there is no real competition which is how capitalism keeps companies focused on providing the best service. Hence the utility market has to be heavily regulated otherwise companies can abuse their monopolistic power by putting unreasonable terms into their contracts leaving consumers with a choice between accepting them or house-camping.