Netflix Terms of Service Invalidates Your Right To Sue

New submitter ebombme writes "Netflix has decided to go the route of AT&T and others by trying to take away the rights of their users to form class action lawsuits against them. A copy of the new terms of use states 'These Terms of Use provide that all disputes between you and Netflix will be resolved by BINDING ARBITRATION. YOU AGREE TO GIVE UP YOUR RIGHT TO GO TO COURT to assert or defend your rights under this contract (except for matters that may be taken to small claims court). Your rights will be determined by a NEUTRAL ARBITRATOR and NOT a judge or jury and your claims cannot be brought as a class action. Please review the Arbitration Agreement below for the details regarding your agreement to arbitrate any disputes with Netflix.'"

Re:Irrelevant for the normal consumer

[jonsmirl]

That's the real problem. The only winner in these class actions is the lawyers. They get $20M. The consumers get coupons and the service raises their price to collect the $20M and give it the lawyers.

I got a check for $0.02 in a mortgage case when the class action lawyer took home $65M. Funny how the account servicing fee went up $0.10 a month after that. Probably cost me over $20 to recover that $0.02 I had been "cheated" out of.

Re:yep

[Anonymous Coward]

Completely enforceable in the US.

US Supreme Court ruled that binding arbitration agreements are legal and enforceable.

Still, not news, as every company will soon have this clause.

Re:Not legal.

[macs4all]

It is perfectly legal. Business lobbies have purchased congress to affirm in law that these stipulations are allowable.

Really? I must have missed the repeal of the Seventh Amendment to the U.S. Constitution (which guarantees not only a right to sue, but in fact guarantees a JURY TRIAL in any controversy in excess of TWENTY dollars), AND the vacating of 250 years of case law that stands for the proposition that the waiver of a constitutional right must be express, informed and knowing.

A "click contract" doesn't meet any of those criteria, regardless of what South Park would lead you to believe.

Re:yep

[bmo]

Nope. Not enforceable.

Verizon got spanked for such terms in its contracts.

You cannot sign away your rights.

--
BMO

Re:Not legal.

[iamgnat]

Really? I must have missed the repeal of the Seventh Amendment to the U.S. Constitution

Not a repeal, but a sound gutting:

• ARS [arstechnica.com]
• Reuters [reuters.com]
• NYT [nytimes.com]

Re:if they break the law...

[History's Coming To]

In the UK you can't sign away your statutory rights. If I sign a contract saying I won't sue for negligence and the company are negligent, then I can sue and the judge will probably see the contract as a minus point for the defendant/s.

Example - my landlord can put a clause in the rent contract saying he is not responsible for the safety of animals (reasonable, as I live on a farm), but he can't get out of a statutory obligation such as ensuring electrical safety in the premises, no matter what I sign.

Re:yep

[Tsian]

This blog discusses the case and its ramifications briefly

Significance: Under this Supreme Court ruling, consumer contracts that require binding arbitration and prohibit participation in classwide arbitration are allowable.
http://lawprofessors.typepad.com/banking/2011/05/us-supreme-court-okays-binding-arbitration-clauses-prohibiting-consumers-from-joining-class-actions.html [typepad.com]

IAAL and it IS unenforceable

[PDG]

The AT&T case was unique in that the SCOTUS overrode a CA statute that was OVERLY generous to consumers (and completely unfair to businesses) and said the arbitration clause was valid. MA on the other hand will toss out such a clause (as they did in the Dell case) as it simply stripped a consumer's right to the court. So I repeat, the AT&T does NOT validate all arbitration clauses, all it did was invalidate enforcement of a CA statute that was superceded by the Fed Arbitration Action.

Re:yep

[digitalaudiorock]

Yup...and I can't for the life of me figure out how that jives with the 7 th Amendment [wikipedia.org]: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law." Seems pretty clear to me.

Re:yep

[dgatwood]

You are correct. What the GP was thinking of is called "mediation". Binding arbitration means that you agree to abide by the decision.

Worse, binding arbitration means that you lose the right to sue over afterwards. Once arbitration begins, your right to sue is gone. This is why binding arbitration should be limited to minor disputes over small sums of money. If that's not what you're dealing with, you are always better off getting a lawyer and going to court, challenging the binding arbitration clause as unconscionable.

At least in the state of California, mandatory binding arbitration clauses in contracts of adhesion (e.g. the Netflix contract) are almost always found to be unconscionable. Unfortunately, the recent Supreme Court decision undid all this, reversing some thirty years of fairly consistent case law in the name of federal preemption. At this point, the only way to get back our right to sue is to demand that Congress pass laws fixing this heinous abuse of justice.

Mandatory binding arbitration clauses in contracts of adhesion are way beyond unconscionable. They are a fundamental abrogation of the legal principles upon which this country was founded. The justices who made this decision should be ashamed of themselves for putting the profits of big corporations above the public's right to not get screwed by them.