> According to Lord, the terms of service when he made the initial pledge aren’t the same terms of service they are today. The original terms of service, according to RSI’s own records, make no mention of arbitration before February 2015. “These Terms of Service (TOS) do not affect any transactions made before its effective date,” RSI’s terms site said. “All prior transactions are governed by the TOS in effect on the date of such transactions.”
> Lord came to court prepared. He had printed out multiple versions of the terms of service, all records of communication with RSI, and a long document recording the 77 promises RSI hasn’t fulfilled in a timely fashion, including citations showing where and when RSI made those promises. But the case never got that far. He said RSI’s representatives understood that Lord’s pledges weren’t covered by the arbitration clause, and he offered to settle, again, for $3,800. They declined.
> According to Lord, when RSI’s representatives stood before the judge, they tried to argue the arbitration clause of their TOS. “Right off the bat, they assert the arbitration clause applied to everything, even though it plainly didn't,” Lord said. “I had to give the judge a copy of the first terms of services that clearly show that the arbitration clause was not there for the first few transactions.”
> ...According to Lord, the judge decided to apply the current TOS to all of the transactions in dispute. “He said he didn’t want two rulings floating out there,” Lord said. He may have lost this case, but he’s not done fighting. “I’m going to pursue it further. I’m not sure in what direction. I’m going to be speaking with a couple of different attorneys to evaluate my options.”
I mean... what? So even if you do exercise your choice as a consumer to avoid a forced-arbitration clause, companies can simply add it to their ToSes later on and retroactively make it apply to all interactions ever with the company?
2.Change price.
3.Sell some more products.
4.Send lawyers to collect diff on product sold in [1].
The question is, was he made aware, that his previous agreement will be changed when he was giving some more money?
Any new pledge could easily have a little tickbox "I've read and understood the terms & conditions", I'm not sure if Kickstarter has one but I've seen such boxes pop up everywhere.
We also need those contracts to be much simpler. A single page of large font in language simple enough for a grade school graduate to understand what's supposed to happen.
Yes, a few rights are better protected then in the US (at least if you haven't written the EULA in the right way), but I'm pretty sure they are generally legal and enforced.
The other side of this is small claims cases aren't going to get a thorough review like they would traditionally, thus some cases have the wrong ruling made. Since the claim was dismissed without prejudice, it could be refiled iirc.
That's not reasonable
By the way, the hypothetic wandering cat or curious child that were to do so would risk of being liable of perjury :|
The courts are for the wealthy, not for the plebiscite. This is what this ruling shows.
According to several other articles I read this was argued but lost due to the majority of contributed money came _after_ the ToS update which required him accepting the new ToS.
It's still crappy though.
However, here's the other side to this particular claim. " the vast majority of Lord's 61 pledges came after the arbitration clause was added and that Lord accepted the new terms of service when he added additional funds to his initial pledge. "
My guess, if he was to appeal, the end result would be a ruling saying "The stuff done before the arbitration clause get adjudicated, the stuff after goes to arbitration"
This is what has happened in the past. But in general, you are allowed to give contracts retroactive effect if both parties agree and it's explicit.
This would probably leave Lord with a claim for basically nothing.
The plaintiff can still appeal the case though, and stands a good chance of having the case heard, if the facts are as presented.
The author is making some confusing word choices.
It has an arbitration clause.
Also, are these statements legal in America?
* "YOU UNDERSTAND AND HEREBY AGREE THAT YOU HEREBY WAIVE THE RIGHT TO SUE IN COURT AND HAVE A JURY TRIAL."
* "To the fullest extent permitted by law, (1) no arbitration shall be joined with any other; (2) there is no right or authority for any Dispute to be arbitrated on a class-action basis or to utilize class action procedures"
* "Any arbitration shall be initiated in the County of Los Angeles, State of California, United States of America. Any Dispute not subject to arbitration, or where no election to arbitrate has been made, shall be decided by a court of competent jurisdiction within the County of Los Angeles, State of California, United States of America, and you and RSI agree to submit to the personal jurisdiction of that court."
So waiving your right to the judicial system, waiving your right to enter into a class action suit, and enforcing a particular jurisdiction location? Seems very anti-consumer and not fair at all.
The whole EULA/TOS nonsense is crazy in general, but RSI isn't doing anything unusual here, and I'm not surprised this is how a judge took it.
The idea that someone could make 61 different purchases over a span of years, and then go back and think that they are entitled to refunds for all of them is a little crazy. And while the game isn't done, it is playable, and he did spend a significant amount of time playing it. It's unfortunate the game isn't developed the way he likes, but that is again, not an RSI-specific problem.
>"Yes your honor, this did not apply at the time of pledge, but we updated the TOS, and he specifically agreed to updated TOS as part of his playing the beta test and here is the timestamp when he did so through his account."
well, that'd still be plenty good reason to discuss how the modern practices of EULAs and TOS clearly circumvent the spirit of contract law, but it wouldn't be a new practice at all either. And it seems like it'd be a pretty straightforward, slam dunk thing to say too.
The article though doesn't make it sound like that was the argument or came up. Which might be because we're getting it 2nd or 3rd hand, so we shouldn't necessarily jump to conclusions. But if the judge arbitrarily decided it applied retroactively rather then "it applies because he agreed it would at a later date" that'd absolutely be pretty scary.
Yeah, as a Star Citizen backer (at an extremely modest level) I think that it just wasn't spelled out in the article. There was a LOT of hubub in the community when they added this new clause to the TOS, because you had to accept it to continue playing the alpha, which in turn meant that you could never get a refund.
Now I do agree that it would be very nice to see that the judge confirmed that the user actually went through with this agreement personally and that his acceptance was not just implied by the fact that the change was made a ways back in the release cycle.
There is an important distinction to be made.
I agree that he should not be entitled to change his mind about wanting a refund, years down the line.
But a corporation should not be entitled to unilaterally declare itself a sovereign entity, where it becomes both the defendant and the judge in lawsuits brought against it!
So sure, right verdict, but based on really terrible legal reasoning that needs to be overturned.
That's not a refund years after one received a product, it's years after he was promised a product that he has not yet received!
The fact that they gave him prototypes of the product in the meanwhile has little relevance (altough if those "prototypes" were explicitly mentioned as part of what you would get in exchange of the funding, they could be regarded as a partial delivery and their assessed value ought to be discounted from the refund).
But I really don't even know the Kickstarter terms, I'm just speculating...
In the US, both laws (other than laws criminalizing conduct or increasing punishment for a crime, where the prohibition on ex post facto laws applies) and contracts can be, and sometimes are, retroactive.
Could you expand upon this a bit? In the US bills of attainder and ex post facto laws were clearly banned for both the Federal and State government from the founding of the country, though I remember reading that despite statements from the founders SCOTUS has been shakier on applying it to civil vs criminal law.
But it's not clear to me how that relates to purely private contracts, unless there is something in California regulating it? Further to your own point:
>A new TOS can force you to cede rights from that point onward.
It seems like that could cover this just fine couldn't it? Ie., two parties could agree that regardless of past or ongoing legal interactions, any future new legal interactions could be governed under different rules. I'm not sure that'd be "retroactive", it doesn't govern anything undertaken under the previous agreement, it modifies it going forward. Are you saying that contracts may never be modified from their original form? That doesn't jive at all with my (admittedly non-lawyer) understanding. It'd be against all sorts of bankruptcy proceedings and private settlements for example, since those often involve modifying previously agreed terms of previously engaged in financial exchanges.
Granted this all puts aside questions of adhesion and whether he even did agree to new TOS at all of course. But assuming during his ongoing play he was presented with a new TOS, agreed to it, and then at a later date filed suit, it doesn't seem novel at least (even if we think certain rights should not be contractable) that their legal interactions after the agreement date would be governed by the new TOS.
Are there records created for small claims cases?
You're forgetting that judges and lawyers are the ones who moonlight as paid arbitrators. They're only acting in their own best interests.
There is no option to simply not participate, it is absurd.
Completely agreed. Prisons are another example of an essential public service that should never be privatized or outsourced.
The NHS also has other private components: it used to run its own logistics division which was scrapped in recent years and replaced with services provided by couriers like DHL.
Could they? I thought the doctor's contract is with the NHS on standard government terms, and the patients are dealing with the NHS terms, the doctors have no direct contract with the patients or ability to impose legal terms on the patients differing from the NHS terms.
Does it? Why? I'm 100% for all of the items you mentioned -- public transportation, public communication, and public food. Arguably we pay for crappier versions of all of those already (Busses, Lifeline Program, SNAP and Bridges or your state's equivalent)
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You can be for "public services that should never be privatized or outsourced", and still allow private services to exist too. That's not a conflict in any way.
(I'm aware of the letter ban) but a public USPS for package delivery, doesn't prevent FedEx from also delivering packages too. A public water utility doesn't prevent Nestle from also selling bottled water everywhere. Public elementary schools hasn't prevented private/religious schools from also existing in every state. PBS / BBC hasn't prevented NBC / ABC / CBS / Sky from existing. You can be pro "public utilities for things everyone needs, ban privatization of public services" and that does not have to hurt any private companies in any way.
Government has always been about the legitimatized application of force; the use of law as one of the key components of the legitimization of force is very old, but not essential to the concept government (it's essential to modern, and even many older, norms or models of government, though.)
This is how government ought to be, and has been at least several times in the last 1000 years. The Magna Carta is famous for first codifying the rule of law principle.
It's the fundamental government functions that should never be outsourced.
(If the people's will is that government take care of other matters, no problem. They can choose either way, provided the resulting laws are not unconstitutional.)
The public service (small claims court) was present and used. He just didn't get the result he wanted. It's not like the "public service of justice" was evaded. He got a hearing. The judge (a real judge!) said the arbitration clause was enforceable.
So he lost. In court. Having exercised his constitutional right to petition his government for redress of grievances.
I mean, look: I get that arbitration clauses can be unfair. But that's not an indictment of arbitration, it's an indictment of unfair contracts. For every case like this that makes your blood boil there's one that throws out an arbitration clause that wasn't appropriate.
The system works, basically. It just doesn't get this guy his $4500 back because he made a stupid bet on Kickstarter.
Arbitration is no longer thrown out almost ever, because of ATT Mobility LLC v. Concepcion. An unconscionable contract with arbitration is not an exception to arbitration anymore and state laws no longer apply to arbitration compelled agreements. The arbiter will decide what, if any, laws to follow. The arbiter will decide if the contract is fair. The arbiter will decide if they even want to rule based on the dispute at hand or something arbitrary.
You are behind the times on the sheer power of mandatory binding arbitration.
Then perhaps your ire should be directed at the politicians responsible for appointing judges with more acceptable leanings on civil liberty issues like this, and not at some random local magistrate who failed to rule for the gambling rando who lost $4500 on kickstarter.
I get what you're saying. This isn't a good example of the problem, nor a productive location to whine about it.
Also, "An unconscionable contract with arbitration is not an exception to arbitration anymore" then isn't the problem deceptive business conduct? Can't people form a class and sue for that? (Or is that a process only the FTC can initiate?)
The system did NOT work.
He was denied his right to redress because the judge thought the case wasn't worth enough to be worth his time, wrote a very dismissive ruling and then hoped it wouldn't be appealed so his shitty ruling wouldn't be torn apart.
This isn't a 'the sky is falling' situation. This is a judge cutting a corner to get to cases he views as more important.
This kind of precedent should not be allowed to stand but there is only so much time an individual who has to make a living can devote to these kind of issues.
It's not like a corporation that has legal staff on board and can afford to litigate for years on end without any consequences for anyone involved, and if there is a fine at the end it gets paid.
I can imagine that if they tried to get a refund somewhat close to the change, a judge could be convinced to allow the refund under the old ToS.
If he made one pledge, and then never used or logged into kickstarter and agreed to a new TOS then he would have a case.
The argument is that the justice system is slow and expensive because it is overloaded with cases that don't really belong in the justice system in the first place. Which is not a radical idea; e.g. only some cases merit the attention of a district court, and fewer still merit the SCOTUS.
You can see the "overloading" perspective when you look at the asylum hearing backlog. The demand outstrips the judiciary's ability to run fair hearings practically to the point of absurdity.
Is small claims court slow and expensive? Not to my knowledge.
The ease of which you can go to court can motivate parties to use it as a strategic threat even if they feel they don't have a particularly strong case, and the openness of the court system can make that small chance of success a strong threat against a public person or company.
So arbitration, by definition, can find a mutually acceptable solution with a zero sum, as opposed to the negative sum of a legal war. Society stands to gain if arbitration works - but not in cases such as these, were forced arbitration is employed as a stopgap against any and all claims.
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I have seen data to suggest that arbitrators rule often in the favor of the companies, but that could be a result of more people raising bullshit claims since it's significantly easier to do so.
Maybe the other arbitrators went out of business because they ruled on the consumer side.
See: survivorship bias.
Just to be clear, that doesn't mean he wouldn't have lost otherwise, or that forced arbitration wouldn't have worked in his favor. If forced arbitration wasn't a consideration, he might still have lost.
Arbitration is a biased loss for a human up against a corporation in mandatory binding arbitration via a contract of adhesion.
When you as the consumer have nil input into establishing an impartial venue, and the COMPANY has an ongoing business relationship with the Arbiter on which the Arbiter depends it completely undermines the integrity of the proceedings. It's like asking your Mother in Law to preside over divorce proceedings.
How is this so hard to understand?
If a company can force you into that regime, and has all the bargaining power in the transaction, you are not at the table as equals. You are cattle. You are meant to consume and remain silent. Any complaints will be ignored in the order they are received.
You can say that IDEALLY the Arbitration company runs arbitration for many other companies, so is an impartial body in this case. Losing this ONE business wouldn't hurt right?
Except their bills ARE PAID by your opponent. You don't bite the hand that feeds. It's why the public justice system "works". If arbitration is so effective, it should be integrated into the public justice system and funded accordingly. Otherwise, it's your Civil Rights being discarded by corporate contract lawyers.
No, it's not. The point being not whether arbitration is good or not, simply contesting the implication that the only reason lost because of a forced arbitration clause.
The only way you can disagree with that or argue it is to prove otherwise, which you can't.
That's a classic, I'll have to remember that.
What you're really saying is that you want to prevent me from offering a service on the condition that contract disputes are handled by alternative dispute resolution mechanisms.
This desire to impose restrictions on other people's free action is immoral, and doesn't become okay due to your anti-free-market ideology.
It’s especially sad to see you trying to spin blocking someone’s ability to exercise their right to use the legal system as a pro-liberty move. At the least you can be honest and acknowledge that it’s about saving money.
But that's a separate issue from the possibility of including arbitration clauses in a contract, which simply expands the range of possible contracts two consenting parties can enter into.
>>Being forced to use a company’s appeals process
No one is being "forced to use a company's appeals process". You choose to accept a company's offer, and agree to the terms, when you sign a contract with them. Given you're not entitled to use their service, and are free to not use it, you are not being forced into anything.
The justice system should always be an option when arbitration fails, and arbitration should take no more than a reasonable time to fail (say, two weeks for this $5000 amount). The whole point of a small claims court is to handle such cases, not offload them to a dodgy corporate lawyer masquerading as a judge.
If the public service of justice is slow and expensive, we need to fix the public service, not replace it with a free market simulacrum. That's always the case with non marketable but essential public goods.