So PSN's new terms of service include...

[SackAttack]

...a waiver of class action status and binding arbitration for dispute resolution in order to continue using the service.

How in the world does that *not* violate the 9th Amendment? How can you be compelled to give up your right to a trial by jury in the matter of a financial dispute pursuant to even being granted the right to enter into a fiscal relationship to begin with?

Can one of our local lawyers straighten me out here?

[Mizzou B-ball fan]

I get the impression from some discussions on other boards that it won't stick in court.

[General Mike]

It won't.

[SportsDino]

Many of the contracts companies try to make you sign are completely unenforceable. Like anything that claims they are free of liability when they sell you a product (they are not) which is what this is very similar to. I almost think they should be charged for fraud for even putting this bullshit on paper.

[JediKooter]

Credit card companies do this all the time.

[BrianD]

Thought #1: They are hoping at least some people are dumb enough to not challenge the contract and they will save some money on lawsuits.

Thought #2: Their lawyers found someone in the company dumb enough to approve this language which will ensure more business for the lawyers when people do challenge the contract in court.

[RedKingGold]

Originally Posted by Mizzou B-ball fan

I get the impression from some discussions on other boards that it won't stick in court.

Originally Posted by General Mike

It won't.

Wrong. In general, arbitration clauses waiving class action for consumer suits are lawful by the U.S. Supreme Court.

Reuters) - The U.S. Supreme Court on Wednesday handed businesses such as AT&T Inc a major victory by upholding the use of arbitration for customer disputes rather than allowing claims to be brought together as a group.

By a 5-4 vote, the high court ruled that an AT&T unit could enforce a provision in its customer contracts requiring individual arbitration and preventing the pooling together of claims into a class-action lawsuit or class-wide arbitration. The plaintiffs, Vincent and Liza Concepcion, filed their class-action lawsuit in 2006, claiming they were improperly charged about $30 in sales taxes on cellphones that the AT&T Mobility wireless unit had advertised as free. AT&T, the No. 2 U.S. mobile service, was backed in the case by a number of other companies and by the U.S. Chamber of Commerce business group, while consumer and civil rights groups supported the California couple. Companies generally prefer arbitration as a less expensive way of settling consumer disputes, as opposed to costly class actions, which allow customers to band together and can result in large monetary awards.

Customer arbitration agreements are widely used by cellphone carriers, cable providers, credit card companies, stock brokerage firms and other businesses. Vanderbilt University law professor Brian Fitzpatrick said it may be the most important class action case ever decided by the Supreme Court. "Because companies can ask all of their consumers, employees, and perhaps even shareholders to sign arbitration agreements, this decision has the potential to permit companies to escape class action liability in almost all of their activities," he said.
Shares of AT&T closed up 1.55 percent at $31.42 on the New York Stock Exchange.

AT&T DEFENDS ARBITRATION AS FAIR

AT&T praised the ruling, saying the Supreme Court recognized that arbitration often benefits consumers. "We value our customers, and AT&T's arbitration program is free, fair, fast, easy to use, and consumer-friendly," the company said. AT&T said its arbitration agreements required it to pay at least $7,500 if the arbitrator awarded more than the company's final settlement offer and to pay all arbitration costs for nonfrivolous claims. Deepak Gupta, an attorney at the consumer advocacy group Public Citizen who represented the couple, denounced the decision and said class actions had been an essential tool to achieve justice in U.S. society. "The U.S. Supreme Court dealt a crushing blow to American consumers and employees, ruling that companies can ban class actions in the fine print of contracts," he said.
AT&T had argued that a federal law that encourages the use of arbitration, the Federal Arbitration Act, trumped a California consumer protection law at issue in the case.

In its ruling, the Supreme Court's conservative majority agreed.
"The California law in question stands as an obstacle to the accomplishment of the purposes and the objectives of the FAA. It is accordingly preempted," Justice Antonin Scalia said for the majority in reading his opinion from the bench. Scalia cited a federal judge's conclusion in the case that the couple was better off under the AT&T arbitration agreement than under a class action, which could take months or years and could result in their winning just a small amount of money. The ruling, which reversed a decision by a U.S. appeals court in California, was the latest in a series by the Supreme Court in recent years that generally favored arbitration. The court's four liberal justices dissented. "The Court is wrong to hold that the federal act preempts the rule of state law," Justice Stephen Breyer wrote in dissent.
The Supreme Court case is AT&T Mobility v. Concepcion, No. 09-893.

http://www.reuters.com/article/2011/...73Q4N520110427

[RPI-Fan]

Originally Posted by SackAttack

...a waiver of class action status and binding arbitration for dispute resolution in order to continue using the service.

How in the world does that *not* violate the 9th Amendment? How can you be compelled to give up your right to a trial by jury in the matter of a financial dispute pursuant to even being granted the right to enter into a fiscal relationship to begin with?

Can one of our local lawyers straighten me out here?

Note: I am not a lawyer and am not offering any legal advice.

The 9th Amendment has nothing to do with trial by jury.

Further, what RedKingGold said. To the extent that there is a problem with the deal, it is that the contract provision does not apply because it is unconscionable. Nothing in the 7th Amendment precludes you from contracting away your right to a trial by jury. To draw an analogy, you can waive - without even getting anything in consideration (unlike the deal questioned here) - your Fourth Amendment rights. It happens ALL the time. I have even heard some experienced cops claim that they have literally never seen a suspect refuse to consent to a search. I imagine that those claims are a bit fanciful, boastful, or ignorant (or some combination thereof), but the basic point stands.

Additionally, the 7th Amendment right to trial by jury does not even apply to state courts in the first place.

[albionmoonlight]

I will say that there is something unique about the 7th Amendment compared to other rights that we contract away all the time. The 7th Amendment applies to suits between two private parties. (Which gives you a sense of how afraid the founders were of oligarchy. Two private folks getting to resolve their dispute before a jury of their peers (as opposed to an upper-class judge) is right in there with Free Speech and the rest.)

So, I can see an argument that two private parties cannot contract away a right designed to maintain fairness between two private parties. There is something to that, I think.

However, RKG's case seems on point. And I really don't know much, at all, about the 7th Amendment.

[SportsDino]

I stand corrected, I forgot how recently the Supreme Court is full of fucktards.

That is still a young case though, and I'm unsure how it will hold up if arbitration abuse goes rampant.

In lower courts arbitration clauses have been thrown out in a variety of consumer and at-will employment cases, so I think this precedent needs some more exercise before one can predict how it will play out on a case by case basis.

Also the cost of arbitration hearings can be quite high, they advertise it as saving everyone money, but have you actually fought one (no I haven't, I just read a bit). If you want a chance you probably need a lawyer, not to mention the corporation picks the arbitrator so they get a sort of home court advantage.

I think these clauses suck, but they are littered all over the place. Along with EULAs and other evil clauses in contracts maybe this means in a decade or so there is an anti-bullshit movement and people refuse en masse to buy these products. That is the only way it is going to disappear entirely.

[DaddyTorgo]

But since you can't see the TOS until you purchase the PS3 and try to sign on isn't that going to get tossed out in court (unless they're forced to give you a full refund on an open-box one)?

Such bullshit.

[RPI-Fan]

Originally Posted by DaddyTorgo

But since you can't see the TOS until you purchase the PS3 and try to sign on isn't that going to get tossed out in court (unless they're forced to give you a full refund on an open-box one)?

Such bullshit.

(I am not a lawyer and this is not legal advice.)

In a word - no. Well, not for the reason that you say anyways.

Cf. Carnival Cruise Lines, Inc. v. Shute - Wikipedia, the free encyclopedia.

[DaddyTorgo]

Oh...well that blows.

Fuck them.

[RedKingGold]

Originally Posted by SportsDino

I stand corrected, I forgot how recently the Supreme Court is full of fucktards.

That is still a young case though, and I'm unsure how it will hold up if arbitration abuse goes rampant.

In lower courts arbitration clauses have been thrown out in a variety of consumer and at-will employment cases, so I think this precedent needs some more exercise before one can predict how it will play out on a case by case basis.

At its heart, I think the AT&T case cited above is more about preemption than anything, basically federal law > state law like rock > scissors. I believe these types of arbitration clauses can still be challenged under state law, however, that's going to depend on the state/locality/jurisdiction to find that specific state law for the hook.

Also the cost of arbitration hearings can be quite high, they advertise it as saving everyone money, but have you actually fought one (no I haven't, I just read a bit). If you want a chance you probably need a lawyer, not to mention the corporation picks the arbitrator so they get a sort of home court advantage.

Absolutely 100% not true. The cost of preparing for litigation is much, much more costly than preparing for an arbitration. Also, while arbitration forums vary, arbitrators are often selected completely at random or at the mutual choice of both parties. Lastly, from what I've seen, pro se plaintiffs are given much more leeway in presenting their case in an arbitration forum as the rules of evidence are much more relaxed.

FWIW, I've served as a county arbitrator on various consumer matters (credit card default, bankruptcy, etc.), so I feel I have some experience to speak on this issue.