December 6th, 2016

Opting Out of Uber’s Forced Arbitration (The Clock is Ticking)

Uber logo. Used without its permission.

Uber logo. Used without its permission.

You have until December 21st. That’s it. But you can opt out.

Here’s the deal: Uber changed its terms of service to force people into arbitrations, taking away consumers’ rights to sue the ride sharing company if something goes wrong. Like plow into another car because the driver was looking at his phone to see where his next right might come from.

That kind of thing.

And compulsory arbitration is very bad for the little guy, as I’ve discussed earlier, as arbitrators would love to have the repeat business of the companies that are always involved in disputes. There is a hidden financial motivation to arbitrators to be gentle to Uber and other large businesses so that they continue to hire said arbitrators.

That is why, for example, Wells Fargo is trying hard to force claims against it for creating sham accounts into arbitration, instead of facing the wrath of juries.

So while Big Business of all stripes can pull it’s business from arbitrators who might not be as nice as they’d like, the one-and-done consumer has no leverage. None. Nada. Zip.

Advantage: Big Biz.

So, courtesy of Marea L. Wachsman, comes this easy-peasy method of preserving your rights against Uber.

Take it away Marea:
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mareawachsman_492128262

Marea Wachsman, of Schreier & Wachsman, LLP

If a passenger is injured in an Uber vehicle due to its negligence, passengers were required to arbitrate their claims for personal injuries before the American Arbitration Association.  They were required to arbitrate pursuant to the terms and conditions of the Uber contract the passenger “accepts” when using Uber.

On July 29, 2016, however, Judge Rakoff from the Southern District ruled that the Uber arbitration terms were not conspicuous enough or did not evince the users “unambiguous manifestation of ascent” to the arbitration provision and therefore the court ruled that the arbitration provision was not enforceable.

With its forced arbitration clause tossed into the dumper, Uber tried again.

On November 14, 2016 Uber sent an email to its users to undermine Judge Rakoff’s decision, announcing it was updating its Terms effective November 21, 2016 —  while everyone was scampering somewhere, or doing something, in anticipation of  Thanksgiving.

In that same email, Uber instructed its users to read the new Terms and expressly stated it had “revised our arbitration agreement.”  The revision is with an eye to ensuring that negligence claims by passengers must have their claims for personal injuries arbitrated, and not litigated, thereby waiving the passengers’ rights to a jury trial.

Fortunately, you can reject the November 21, 2016 Uber Terms, by providing Uber with written notice by mail, by hand delivery or by email within 30 days of November 21, 2016.

If the rejection is by email, the email must come from the email associated with the individuals account and addressed to change-dr@Uber.com. The notice to reject the Terms must include the individuals full name and state your explicit intent to reject the changes to the Terms.

By rejecting the November 21, 2016 Terms, the individual continues to be bound by the Terms the individual first agreed to when the individual signed up with Uber.  Thus, presumably, the individual would still have the protection Judge Rakoff provided in having the claims for personal injury for an Uber passenger against Uber heard in a courtroom and not in an arbitration hall.

You can find the information buried on Uber’s legal page, in paragraph 5, reprinted in full below:

Uber may amend the Terms from time to time. Amendments will be effective upon Uber’s posting of such updated Terms at this location or in the amended policies or supplemental terms on the applicable Service(s). Your continued access or use of the Services after such posting confirms your consent to be bound by the Terms, as amended. If Uber changes these Terms after the date you first agreed to the Terms (or to any subsequent changes to these Terms), you may reject any such change by providing Uber written notice of such rejection within 30 days of the date such change became effective, as indicated in the “Effective” date above. This written notice must be provided either (a) by mail or hand delivery to our registered agent for service of process, c/o Uber USA, LLC (the name and current contact information for the registered agent in each state are available online here), or (b) by email from the email address associated with your Account to: change-dr@uber.com. In order to be effective, the notice must include your full name and clearly indicate your intent to reject changes to these Terms. By rejecting changes, you are agreeing that you will continue to be bound by the provisions of these Terms as of the date you first agreed to the Terms (or to any subsequent changes to these Terms).

 

June 21st, 2013

Why Arbitration is Rigged Against Consumers

AmericanExpressThe United States Supreme Court put arbitration back in the news yesterday, by deciding a case in favor of American Express and against a restaurant (American Express v. Italian Colors Restaurant). The restaurant had a $40,000 claim, but to prove it would cost about $1M. They wanted, therefore, to proceed as a class action with others similarly aggrieved by American Express policies, as that is what class actions are made for: allowing small claimants to aggregate to make justice economically viable.

Justice Scalia, writing for the majority, says boo hoo and too damn bad if the courthouse doors were slammed in their face due to a contract:

“Respondents argue that requiring them to litigate their claims individually—as they contracted to do—would contravene the policies of the antitrust laws. But the antitrust laws do not guarantee an affordable procedural path to the vindication of every claim.”

Justice Kagan, writing in dissent, calls Scalia on what he did:

Here is the nutshell version of this case, unfortunately obscured in the Court’s decision. The owner of a small restaurant (Italian Colors) thinks that American Express (Amex) has used its monopoly power to force merchants to accept a form contract violating the antitrust laws. The restaurateur wants to challenge the allegedly unlawful provision (imposing a tying arrangement), but the same contract’s arbitration clause prevents him from doing so. That term imposes a variety of procedural bars that would make pursuit of the antitrust claim a fool’s errand. So if the arbitration clause is enforceable, Amex has insulated itself from antitrust liability—even if it has in fact violated the law. The monopolist gets to use its monopoly power to insist on a contract effectively depriving its victims of all legal recourse.

And here is the nutshell version of today’s opinion, admirably flaunted rather than camouflaged: Too darn bad.

I won’t get into further details, as it is covered elsewhere, such as here:

The Supreme Court Just Made It Easier for Big Business to Screw the Little Guy (Mother Jones)

Details: American Express v. Italian Colors Restaurant (SCOTUSBlog)

SCOTUS Decision in American Express v. Italian Colors (CivPro and Fed Courts Blog)

I write instead to briefly explain why pro-consumer groups hate arbitration agreements that are forced onto consumers in the fine print of countless agreements.

Corporations appear regularly in front of arbitrators, but unlike judges, litigants get to actually pick who they appear before. True, the choice of arbitrator must be done with the consent of the consumer, but the consumer is likely to appear only once and not be the frequent flyers that corporations are.

Arbitrators have, therefore, two customers in front of them; one that regularly hires them to arbitrate and the other appearing as a one-off. Who does the arbitrator want to make happy?

You might think that the arbitrator would just do what is fair, but fair is a flexible term. Arbitrators know that if a defendant-corporation deserves to be hammered in the verdict, and they do exactly that in their decisions, then the company is likely to blacklist the arbitrator from their “approved” list.

If you were corporate counsel, wouldn’t you be tracking which arbitrators have given favorable verdicts and which ones not? Wouldn’t you be selecting only the favorable ones? Wouldn’t you have an “approved” list?

And if you are an arbitrator, wouldn’t you want to be on that list with a constant flow of business?

The consumer, of course, doesn’t have the advantage of appearing often, and even with counsel, the counsel is unlikely to be have as much business in front of the arbitration company as the corporation.

There are times, of course, when a plaintiff may want to arbitrate, such as circumstances where speed is of the essence due to age, or the cost of experts exceeding the value of the case. That’s fine, so long as it’s elective.

But that isn’t what’s happening lately as corporations rush to put compulsory arbitration agreements in every consumer contract they can find.

Congress should act to reverse this decision.  Given the staggering sums of money that corporations give to candidates, of course (courtesy once again of the Supreme Court in Citizens United v. Federal Election Commission), that is unlikely.