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https://www.bloomberg.com/news/articles/2021-06-01/amazon-to-let-customers-sue-after-thousands-of-alexa-complaints
Companies generally have terms of service that say if you have a problem with them, you have to go through arbitration, not the regular court system. It is pretty easy to find books and news articles and activism that assert this is a Bad Thing. The items listed to support the assertion that this is a Bad Thing usually involve: people in arbitration will do a lot of business with the firm, and only a little with a particular customer, so they will tend to favor the firm; arbitration is arbitrary; Rights!; and finally, It’s Expensive. It is rarely noted that all of the things that are listed as negatives with respect to arbitration are actually _even worse_ in the regular court system, with the possible exception of Rights!
A law firm, and let’s TRY to remember Keller Lenkner, because they are creative and effective and thus worth paying attention to, has taken a page from grass roots activism: help thousands of people file very similar arbitration claims. The law firm can automate this process, to a large degree, keeping the price down for the customers, one would assume. The law firm may also be doing this for complex reasons of its own (ranging from, they want people to remember their name, to, they are kinda pissed about Amazon, to, they figure this is super easy to do to Amazon and if they do it to Amazon, a lot of people will notice so if they show up to do it to another firm, the other firm will probably become incredibly easy to negotiate with, to any number of other more clever things too clever for me to imagine in advance).
In any event, Amazon modified its TOS to say, it’s fine, go ahead and file this in court. I don’t know if this will become one or more class action suits (it’s all about whether Alexa is doing stuff that violates the law by recording and possibly retaining recordings of things people say around it, when the people with the Alexa device did not fully grasp that was happening, and/or Children), altho that certainly seems like the next step. But the whole thing is sufficiently creative that it’ll be interesting to watch.
This is the final paragraph of the article, and it is an amazing humblebrag / victory lap / lookee what I did: “It’s remarkable that one of the largest companies in the world, when faced with actual claims under a dispute resolution clause that it drafted, would take such an about-face,” Lenkner said.
Keller Lenkner LLC would like you to know they can do this to Amazon. OK. I’ll be watching with interest for further developments.
Further details / source reporting at:
https://www.wsj.com/amp/articles/amazon-faced-75-000-arbitration-demands-now-it-says-fine-sue-us-11622547000
This mentions a May 18 class action suit already filed.
There is a picture of Travis Lenkner in the WSJ article. He looks extremely … young. And Lenkner did not start with Amazon, they’ve been working up to this point.
The WSJ article is more or less portraying what Lenkner and others are doing as a shakedown operation — swamp a company with claims to get a settlement. Uber, Lyft and Intuit are listed, but none of them have done what Amazon has done (fine, go to court. In King County. See ya there! I guess we are going to find out just how well zoom court scales?).
Also, William Alsup — the only judge that techies remember — makes an appearance in a case back in February where Lenkner asked to force DoorDash (which wanted to move the arbitration cases to court) back to arbitration. Alsup gleefully did so. I would point to this incident as the proximate cause for Amazon to ditch the arbitration requirement entirely. I don’t think this was Lenkner’s goal, and I think it may have been a genuine surprise. The money involved on a per claim basis does not seem particularly large (numbers in the article over 2 years, over 375 million on 100K+ claims, which is less than 2K per. Impossible to know if that if before or after all the fees and cuts but one assumes it is before, so profitable for the lawyers, less clear for the plaintiffs).
https://www.reuters.com/article/us-otc-doordash/this-hypocrisy-will-not-be-blessed-judge-orders-doordash-to-arbitrate-5000-couriers-claims-idUSKBN2052S1
Coverage from back in February ; will update after I read it.
Wow, this is really the nth round. And the opposing firm is usually Gibson Dunn, arguing that Keller Lenkner’s efforts to automate the client side has a certain amount of — and this is my term — bogosity to it.
“Gibson Dunn, in turn, convinced Judge Alsup to ascertain Keller Lenkner’s claims about its clients. The judge required the plaintiffs’ firm to obtain and file sworn declarations from all of its clients, attesting that they worked for DoorDash and clicked their assent to arbitration. Keller Lenkner’s original motion to compel arbitration cited 6,250 demands filed at AAA. Ultimately, as Judge Alsup recounted in Monday’s order, Keller Lenkner filed the declarations Alsup required for 5,010 clients. (The firm filed sworn witness statements for another 869 clients, but Alsup said those statements weren’t good enough and refused to compel arbitration for those couriers.)
Gibson Dunn pushed arguments about Keller Lenkner throughout the case, insisting in a brief just last week that Keller Lenkner “used a telemarketer to generate a ‘client list’ and does not maintain contact with its purported clients.” At a hearing Monday, before Judge Alsup issued his order, Joshua Lipshutz of Gibson Dunn asserted that 400 DoorDash couriers purportedly represented by Keller Lenkner are also apparently represented by other plaintiffs' firms.”
There is a lot to love in the Reuters coverage!
“ He also reminded the plaintiffs’ firm that “it would be a serious problem” to initiate arbitration without a client’s informed consent or to claim a client relationship with couriers who have not authorized Keller Lenkner to represent them.” Wow!
Let’s see what Gibson Dunn has to say.
https://www.gibsondunn.com/as-mass-arbitrations-proliferate-companies-have-deployed-strategies-for-deterring-and-defending-against-them/
That’s from about a week ago, May 24.
They start with a little background, and costs of arbitration provide some insight into that 375million/100000 ratio coming in at a little under $2K.
“For example, if a company’s filing-fee obligation is $2,000 per arbitration”
Yeah, Amazon’s gonna send you back to the court system and make someone else pay. The reason our society has been relatively tolerant of forced arbitration is because of the comparator: the company is willing to pay for the judge, the setting, etc. OK, then! That is fine. At least the taxpayer is not on the hook for it. If this all gets run through the court system, you might be super happy that Ha Ha, Evil Arbitration Is Gone, but it is more expensive for the plaintiff. And the taxpayer.
As a practical matter, however, Gibson Dunn has a numbered list of things that companies could put in their TOS / arbitration agreement paperwork (batching similar claims, for example, but also the usual suspects — cost shifting to the plaintiff if the arbitrator finds the claim to be frivolous, if the judgment is less than what was offered pre-arbitration as a settlement, etc.) to try to reduce costs / risks.
I’m trying to weigh in my own mind the strategic implications of what Amazon opted for. They didn’t massage their TOS. They took an action that could be summarized as Don’t Feed the Trolls / Report to the Mods.
Keller Lenkner and Gibson Dunn are all lawyers. They win no matter which side of this particular arms race wins or loses a given battle. DoorDash tried to get out of this particular trap and failed; Amazon is trying a new exit strategy. I think it is very unclear whether it will work or not. I will say this: we more or less stopped talking about tort reform once forced arbitration became an Ubiquitous Thing. If arbitration fails at mass scale, will we be back talking about tort reform again? No one wants that. But who knows; maybe it will trigger even broader reform.
ETA: Ars Technica coverage: https://arstechnica.com/tech-policy/2021/06/after-75000-echo-arbitration-demands-amazon-now-lets-you-sue-it/
ETAYA: Ars commenters still love Alsup. No surprise there.
Companies generally have terms of service that say if you have a problem with them, you have to go through arbitration, not the regular court system. It is pretty easy to find books and news articles and activism that assert this is a Bad Thing. The items listed to support the assertion that this is a Bad Thing usually involve: people in arbitration will do a lot of business with the firm, and only a little with a particular customer, so they will tend to favor the firm; arbitration is arbitrary; Rights!; and finally, It’s Expensive. It is rarely noted that all of the things that are listed as negatives with respect to arbitration are actually _even worse_ in the regular court system, with the possible exception of Rights!
A law firm, and let’s TRY to remember Keller Lenkner, because they are creative and effective and thus worth paying attention to, has taken a page from grass roots activism: help thousands of people file very similar arbitration claims. The law firm can automate this process, to a large degree, keeping the price down for the customers, one would assume. The law firm may also be doing this for complex reasons of its own (ranging from, they want people to remember their name, to, they are kinda pissed about Amazon, to, they figure this is super easy to do to Amazon and if they do it to Amazon, a lot of people will notice so if they show up to do it to another firm, the other firm will probably become incredibly easy to negotiate with, to any number of other more clever things too clever for me to imagine in advance).
In any event, Amazon modified its TOS to say, it’s fine, go ahead and file this in court. I don’t know if this will become one or more class action suits (it’s all about whether Alexa is doing stuff that violates the law by recording and possibly retaining recordings of things people say around it, when the people with the Alexa device did not fully grasp that was happening, and/or Children), altho that certainly seems like the next step. But the whole thing is sufficiently creative that it’ll be interesting to watch.
This is the final paragraph of the article, and it is an amazing humblebrag / victory lap / lookee what I did: “It’s remarkable that one of the largest companies in the world, when faced with actual claims under a dispute resolution clause that it drafted, would take such an about-face,” Lenkner said.
Keller Lenkner LLC would like you to know they can do this to Amazon. OK. I’ll be watching with interest for further developments.
Further details / source reporting at:
https://www.wsj.com/amp/articles/amazon-faced-75-000-arbitration-demands-now-it-says-fine-sue-us-11622547000
This mentions a May 18 class action suit already filed.
There is a picture of Travis Lenkner in the WSJ article. He looks extremely … young. And Lenkner did not start with Amazon, they’ve been working up to this point.
The WSJ article is more or less portraying what Lenkner and others are doing as a shakedown operation — swamp a company with claims to get a settlement. Uber, Lyft and Intuit are listed, but none of them have done what Amazon has done (fine, go to court. In King County. See ya there! I guess we are going to find out just how well zoom court scales?).
Also, William Alsup — the only judge that techies remember — makes an appearance in a case back in February where Lenkner asked to force DoorDash (which wanted to move the arbitration cases to court) back to arbitration. Alsup gleefully did so. I would point to this incident as the proximate cause for Amazon to ditch the arbitration requirement entirely. I don’t think this was Lenkner’s goal, and I think it may have been a genuine surprise. The money involved on a per claim basis does not seem particularly large (numbers in the article over 2 years, over 375 million on 100K+ claims, which is less than 2K per. Impossible to know if that if before or after all the fees and cuts but one assumes it is before, so profitable for the lawyers, less clear for the plaintiffs).
https://www.reuters.com/article/us-otc-doordash/this-hypocrisy-will-not-be-blessed-judge-orders-doordash-to-arbitrate-5000-couriers-claims-idUSKBN2052S1
Coverage from back in February ; will update after I read it.
Wow, this is really the nth round. And the opposing firm is usually Gibson Dunn, arguing that Keller Lenkner’s efforts to automate the client side has a certain amount of — and this is my term — bogosity to it.
“Gibson Dunn, in turn, convinced Judge Alsup to ascertain Keller Lenkner’s claims about its clients. The judge required the plaintiffs’ firm to obtain and file sworn declarations from all of its clients, attesting that they worked for DoorDash and clicked their assent to arbitration. Keller Lenkner’s original motion to compel arbitration cited 6,250 demands filed at AAA. Ultimately, as Judge Alsup recounted in Monday’s order, Keller Lenkner filed the declarations Alsup required for 5,010 clients. (The firm filed sworn witness statements for another 869 clients, but Alsup said those statements weren’t good enough and refused to compel arbitration for those couriers.)
Gibson Dunn pushed arguments about Keller Lenkner throughout the case, insisting in a brief just last week that Keller Lenkner “used a telemarketer to generate a ‘client list’ and does not maintain contact with its purported clients.” At a hearing Monday, before Judge Alsup issued his order, Joshua Lipshutz of Gibson Dunn asserted that 400 DoorDash couriers purportedly represented by Keller Lenkner are also apparently represented by other plaintiffs' firms.”
There is a lot to love in the Reuters coverage!
“ He also reminded the plaintiffs’ firm that “it would be a serious problem” to initiate arbitration without a client’s informed consent or to claim a client relationship with couriers who have not authorized Keller Lenkner to represent them.” Wow!
Let’s see what Gibson Dunn has to say.
https://www.gibsondunn.com/as-mass-arbitrations-proliferate-companies-have-deployed-strategies-for-deterring-and-defending-against-them/
That’s from about a week ago, May 24.
They start with a little background, and costs of arbitration provide some insight into that 375million/100000 ratio coming in at a little under $2K.
“For example, if a company’s filing-fee obligation is $2,000 per arbitration”
Yeah, Amazon’s gonna send you back to the court system and make someone else pay. The reason our society has been relatively tolerant of forced arbitration is because of the comparator: the company is willing to pay for the judge, the setting, etc. OK, then! That is fine. At least the taxpayer is not on the hook for it. If this all gets run through the court system, you might be super happy that Ha Ha, Evil Arbitration Is Gone, but it is more expensive for the plaintiff. And the taxpayer.
As a practical matter, however, Gibson Dunn has a numbered list of things that companies could put in their TOS / arbitration agreement paperwork (batching similar claims, for example, but also the usual suspects — cost shifting to the plaintiff if the arbitrator finds the claim to be frivolous, if the judgment is less than what was offered pre-arbitration as a settlement, etc.) to try to reduce costs / risks.
I’m trying to weigh in my own mind the strategic implications of what Amazon opted for. They didn’t massage their TOS. They took an action that could be summarized as Don’t Feed the Trolls / Report to the Mods.
Keller Lenkner and Gibson Dunn are all lawyers. They win no matter which side of this particular arms race wins or loses a given battle. DoorDash tried to get out of this particular trap and failed; Amazon is trying a new exit strategy. I think it is very unclear whether it will work or not. I will say this: we more or less stopped talking about tort reform once forced arbitration became an Ubiquitous Thing. If arbitration fails at mass scale, will we be back talking about tort reform again? No one wants that. But who knows; maybe it will trigger even broader reform.
ETA: Ars Technica coverage: https://arstechnica.com/tech-policy/2021/06/after-75000-echo-arbitration-demands-amazon-now-lets-you-sue-it/
ETAYA: Ars commenters still love Alsup. No surprise there.