Our response to Professor Sovern’s article about arbitration opt-outs and so-called “dark patterns” prompted a reply in which he poses two “challenges”: (1) “prove that opt outs benefit consumers by telling us how many consumers opt out,” and (2) “get rid of the deadline [for opting out] and allow … consumers to opt out of arbitration when they know there’s a dispute.”… Continue Reading
Mark J. Levin
Arbitration opt out provisions benefit consumers, Professor Sovern
For the past decade, Professor Jeff Sovern has criticized companies for including opt out provisions in their consumer arbitration clauses, even though such provisions give consumers freedom of choice by allowing them to reject arbitration without affecting the other contractual terms. Most recently, he argues that opt out provisions are actually what the FTC calls a “dark pattern”—a practice that “tricks users into making choices they would not otherwise have made and that may cause harm.” … Continue Reading
Pending New York bills would significantly expand UDAP liability and persons entitled to sue
Two companion bills titled the “Consumer and Small Business Protection Act” have been introduced in the New York legislature would make sweeping changes to the provisions of the state’s general business law (Section 349) dealing with deceptive practices. In addition to creating a new private right of action, the bills would greatly expand the powers of the New York attorney general. … Continue Reading
Arbitration “Fair Act” reintroduced in Congress
Recently, 37 Senators (36 Democrats, one Independent) and 84 members of the House of Representatives (all Democrats), led by Senator Richard Blumenthal of Connecticut and Congressman Hank Johnson of Georgia, reintroduced the Forced Arbitration Injustice Repeal Act (the “Fair Act”) which would amend the Federal Arbitration Act to prohibit the use of pre-dispute arbitration clauses and class action waivers in consumer, employment, civil rights and antitrust cases. … Continue Reading
Professor Sovern: You’re mixing apples and oranges
In a recent blog post, Professor Jeff Sovern contends that the case against consumer arbitration has been bolstered by the fact that a lawyer for the “conservative” Competitive Enterprise Institute made positive remarks about the importance of the Seventh Amendment right to a jury trial in testifying at a House Financial Services Committee hearing. … Continue Reading
Consumer advocates take aim at Chamber’s new mass arbitration report
The U.S. Chamber of Commerce’s recent publication of an 80-page report titled “Mass Arbitration Shakedown: Coercing Unjustified Settlements” has fanned the flames on an already heated debate between consumer advocates and industry lawyers over the propriety of mass arbitrations.
We have addressed mass arbitration issues and potential defenses extensively in our prior blogs.… Continue Reading
New Jersey appellate court decision limiting Atalese to consumer and employment arbitration clauses may fuel FAA preemption argument
In 2014, the New Jersey Supreme Court held in Atalese v. U.S. Legal Services Group, L.P. that in order to be enforceable, arbitration clauses must contain an express waiver of the parties’ right to seek relief in a court of law. Earlier this month, in County of Passaic v. Horizon Healthcare Services, Inc.… Continue Reading
White House issues Blueprint for Renters Bill of Rights: Will the CFPB and FTC stay in their lanes?
Last week, the Biden Administration released a “Blueprint for a Renters Bill of Rights” (Blueprint), which sets forth five principles intended to “create a shared baseline for fairness for renters in the housing market” and directs various federal agencies, including the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC), to take various actions to further those principles. … Continue Reading
CFPB proposes registry for supervised nonbanks using form contracts containing arbitration provisions, waivers, or other limits
The CFPB has issued a proposed rule to establish a system for the registration of nonbanks subject to CFPB supervision that use “certain terms or conditions that seek to waive consumer rights or other legal protections or limit the ability of consumers to enforce their rights.” Arbitration provisions are among the terms that would trigger registration. … Continue Reading
California federal court enforces “clickwrap” web agreement and compels arbitration of claims against Google
Last week, a California federal court granted Google’s motion to compel arbitration of claims asserted by customers who alleged that their Fitbit watches burned their skin. The opinion in Houtchens v. Google found that the company’s “clickwrap” agreement put the plaintiffs on “reasonably conspicuous notice” of the company’s terms of service when they created online accounts to purchase the watches. … Continue Reading