Posts Tagged ‘techdirt’

Arbitrations and the Corporate Litigants Who Love Them

Tuesday, September 11th, 2012

Tim Cushing at Techdirt picked up on the post I did on the Barnes & Noble case (where I, in turn, was picking up on the post Venkat Balasubramani did on Eric Goldman’s Technology & Marketing Law Blog).

In my post, I tried to explain why arbitration is such a great deal for corporations. For various reasons I didn’t dwell on the question of whether corporations get better-than-fair treatment in the arbitration itself. But they do. Much better.

Cushing picked up where I left off by citing to a Seattle Post Intelligencer article reporting the results of a Public Citizen study finding that corporations beat consumers about 95 percent of the time in arbitration.

The Public Citizen study the PI was talking about appears to be this one: The Arbitration Trap: How Credit Card Companies Ensnare Consumers [pdf].

The details are interesting. The key statistic in the study is actually 94 percent – that’s the winning rate for corporations in the cases handled in California by the private arbitration service provider called the National Arbitration Forum. (California formed the sample pool because California, unlike other states, requires public reporting of some limited data by arbitrators.)

The 95 percent figure is for just a small group of specific 28 arbitrators. But it’s that elite group that gets almost all the work!

The Busiest Arbitrators Produce the Results Corporations Seek: In California, a small, busy cadre of 28 arbitrators handled nearly 9 out of every 10 NAF cases. This group ruled for businesses 95 percent of the time. Another 120 arbitrators handled slightly more than 10 percent of the cases in which an arbitrator was assigned. They ruled for businesses 86 percent of the time and for consumers 10 percent.

Can you imagine what it would be like if, instead of judges getting their salary from the government, they were paid by litigants. And can you imagine if there were different court systems competing with one another, all vying for the repeat business of litigants who constantly find themselves being sued? Well, you don’t have to imagine it: That’s arbitration.

As a corporate user of arbitration, you pick the arbitration firm upfront by selecting it in the terms of service or credit-card holder agreement. Of course, you are going to pick the firm that gives you good results. And since arbitration firms are competing for the loyalty of corporate customers, they are going to pick the arbitrators that give those corporate customers what they want. That’s not something dirty for the corporation to do, mind you. That’s just a general counsel doing her or his job. But it sure creates incentives that are skewed.

The report explains:

Arbitrators have a strong financial incentive to rule in favor of the companies that file cases against consumers because they can make hundreds of thousands of dollars a year conducting arbitrations. The arbitrators are chosen by the arbitration firms hired by MBNA and other corporations, which are unlikely to pick arbitration firms that produce results they do not like. Arbitrators routinely charge $400 or more an hour. Top arbitrators can charge up to $10,000 per day and some make $1 million a year. In comparison, California Superior Court judges earn $171,648.

(Yeah, judges don’t make as much. But, in fact, the judgeship is a great stepping stone to being an arbitrator.)

The Public Citizen report explains how systemic bias can develop:

A Race to the Bottom for Arbitration Firms: Companies track how arbitrators rule, and do not choose arbitrators who do not rule in their favor. One NAF arbitrator, a Harvard law professor, was blackballed after she awarded $48,000 to a consumer in a case in which a credit card company filed a claim against the consumer. After the same credit card company had her removed from other pending cases, she resigned, citing NAF’s “apparent systematic bias in favor of the financial services industry.”

Hey, do you get the feeling that Harvard law professor they might have been talking about was Elizabeth Warren? Yeah, me too! Warren was thanked in the acknowledgments section, but it’s just as likely she was their source for information about a different Harvard law professor. (Harvard does have a huge faculty.)

Masnick Reflects on Public Domain Day

Wednesday, January 12th, 2011

techdirt logoFurther to our discussion of the public domain – mostly relevant to bloggers as a source of free images – Mike Masnick of TechDirt reflects on Public Domain Day, as other nations receive new content into the public domain, and once again, nothing in the U.S. becomes free of copyright restrictions.

My Deacon, My Sheriff

Tuesday, November 9th, 2010

Mike Masnick at TechDirt has a nice succinct synopsis of the incredibly frightening I-can’t-believe-this-happened-in-America story of the First Baptist Church in Jacksonville, Florida and the government/church joint venture that came after blogger Tim Rich:

As Masnick says,

A local sheriff’s detective, Robert Hinson, who was (in addition to being a sheriff’s detective) a member of the same church, a provider of security to the church, a deacon at the church and a member of the church’s “disciplinary committee,” used his position in the sheriff’s office to open an official investigation into the blog …

I posted about this case a little while back: Justice for a Blogger Ganged Up On By Sheriff and Church.

European Parliament Approves Get-Tough Gallo Report

Thursday, September 23rd, 2010

The European Parliament voted to approve the Gallo Report calling for tough intellectual-property enforcement measures. (Photo: European Parliament. Used without permission.)

Following up on yesterday’s post, the European Parliament has approved the Gallo Report. (Europarl press release.)


Bengals Cheerleader Sues and Wins $11M Judgment Against Wrong Blog

Tuesday, September 14th, 2010

Sarah Jones (Photo, Cincinnati Bengals)

A federal court has entered an $11 million default judgment for defamation against a blog that was apparently sued by mistake, says Politico.

The blog at the root of the dispute is, a site dating back to 2007 which posts pictures of people and then holds them up to extreme ridicule.

As explains, allegedly posted pictures of Sarah Jones, a Cincinnati Bengals cheerleader and Kentucky high school English teacher, and then made claims that she had sexually transmitted diseases, was having an affair with a player (a violation of Bengal cheerleader rules), and had sexual intercourse in her classroom.

This is the kind of off-the-charts fact pattern you can usually find only on a law school exam. It’s the belt-and-suspenders approach to trying to become a defamation defendant.

Assuming the allegations were false, then Jones had a granddaddy of a defamation case.

As a professor who teaches torts and media law, take it from me, this is not what you would call a gray area. As defamation claims go, this is hardy. You could drop it off in the Gobi desert with nothing more than a stick of chewing gum and it would gain 20 pounds of pure muscle and come flying back on a chartered jet sipping champagne.

And yet there was a problem.

It appears that Jones sued – leaving out the “y” in

News of the $11 million dollar judgment must have come as a surprise to, a fledgling gossip site that seems to have come online only last month.

Now, I have no reason to think that it is, but I tell you if this was typosquatting, it sure backfired. That would be like surreptitiously fishing for perch and landing a great white shark. The silver lining for, I guess, is that it’s drawing some traffic now.

Hmmm, could this be the makings of the world’s strangest theory of trademark infringement? Imagine: “We demand that you immediately cease and desist from conduct that is acquiring lawsuits that should rightfully belong to us … ”

More: TechDirt, Slashdot,

Techdirt Digs Up Cache Problem for Cash-for-Nuisance Suer Righthaven

Monday, August 23rd, 2010

Ooooh. Very interesting. Techdirt asks:

Could The Legality Of Google’s Cache Kill Righthaven’s Copyright Claims?

Two things I would add:

1. This is especially interesting since the Field v. Google case came out of the District of Nevada. That means it’s real precedent in federal court in Las Vegas.

2. The Field v. Google case was in my view wrongly decided. But not real surprising. Bad facts + silly plaintiff => bad reasoning + silly precedent. The Righthaven case may force the issue.

TechDirt Dishes on Righthaven

Thursday, July 29th, 2010

TechDirt on Righthaven: RightHaven Ramping Up Its Copyright Trolling Business.