Trouble brewing with Patreon.

[Peelee]

Umm, yes it is, in many cases.

Actual question, not a challenge or anything: assume 15 people that donated to Peelee's Awesome Channel file for arbitration. All claims are for the same complaint. Does the company need to hire 15 times the number of lawyers they would if they faced one complaint? I assume no, which is why I challenged this assertion.

Again, yes it is, in some cases.

Yes, and hearsay is not allowed in some cases (from what I gather, actually, there are so many exceptions to hearsay that it is more frequently allowable as testimony than not, but I'm no lawyer and could have heard wrong). That there are exceptions to the American Rule does not mean that there is no American Rule. I was deliberately speaking generally.

[Anymage]

Actual question, not a challenge or anything: assume 15 people that donated to Peelee's Awesome Channel file for arbitration. All claims are for the same complaint. Does the company need to hire 15 times the number of lawyers they would if they faced one complaint? I assume no, which is why I challenged this assertion.

IANAL, but as I understand it:

Without any clause, if 1500 people feel that they've been harmed by Peelee's Awesome Channel, they can file a class action. All that an individual has to do is sign up, and they get part of the settlement. (Which is often a small part of the settlement since it does have to be split 1500 ways on top of lawyer fees, but again it's basically money for just signing up.)

If you put in a clause saying that they have to go through individual arbitration first, that can discourage large scale class action suits because everybody has to file a complaint individually. That involves some level of hassle, so the expectation is that you'll have fewer claims to deal with.

Unfortunately the drawback is exactly what we're seeing. If enough people do decide to all file for arbitration at the same time, the terms of the contract prevent you from dealing with them collectively.

[Peelee]

IANAL, but as I understand it:

Without any clause, if 1500 people feel that they've been harmed by Peelee's Awesome Channel, they can file a class action. All that an individual has to do is sign up, and they get part of the settlement. (Which is often a small part of the settlement since it does have to be split 1500 ways on top of lawyer fees, but again it's basically money for just signing up.)

If you put in a clause saying that they have to go through individual arbitration first, that can discourage large scale class action suits because everybody has to file a complaint individually. That involves some level of hassle, so the expectation is that you'll have fewer claims to deal with.

Unfortunately the drawback is exactly what we're seeing. If enough people do decide to all file for arbitration at the same time, the terms of the contract prevent you from dealing with them collectively.

The question assumes 15 individual filings that are not part of a class action for whatever reason. The "15" number is similarly arbitrary and can be whatever.

[Xyril]

Actual question, not a challenge or anything: assume 15 people that donated to Peelee's Awesome Channel file for arbitration. All claims are for the same complaint. Does the company need to hire 15 times the number of lawyers they would if they faced one complaint? I assume no, which is why I challenged this assertion.

Probably not 15 times the number of lawyers, but depending on the circumstances, very possibly 15 times the expected number of billable hours. It depends substantially on procedural and circumstantial specifics. You say the "same complaint," but what does that mean?

The whole reason (in civil court, not in arbitration) class action litigation needs to be certified by a judge is that a neutral party has to balance the benefits of consolidation versus making sure that every party gets their case heard on their own merits. Generally, the judge weighs how similar the complaints really are. It's easy to say, "We all broke a leg at Disney" or "Patreon didn't give us all our money" is just a bunch of the same claim and that it should be decided en masse. But then you have to ask, how did that happen? Did everyone break their leg falling out of Space Mountain because a seat belt strap broke? Did everyone break their leg on different rides, but they still all fell out because of of seat belts so close enough? What if some fell out because of seat belts, some had fixtures fall on them, and some slipped and fell because an industrial cleaning robot flooded the walkways, but the plaintiffs want to consolidate because they all were all direct results of the Disney Guild of Maintenance, Local 55?

I would say as a general rule, the kind of cases that should (IMO) and generally would be certified are the cases that wouldn't multiply the work much--in other words, the ones where each case is substantially identical, and the majority of the duplicate work in dealing with duplicate cases would be the 15 duplicate filings. If the circumstances of each controversy (i.e., the undisclosed reason Patreon refused to part with money or shut down the account for each individual case) are substantially different, it pretty much would take close to 15 times the amount of work to properly address each case. This is why, in civil court, your case wouldn't be certified with so few plaintiffs. (Things get fudgey with bigger cases and smaller dollar amounts per plaintiff--for something with hundreds of thousands of plaintiffs arguing over $10 a piece, a judge might be willing to overlook more substantial differences between individual complaints.)

In terms of arbitration, the same rules don't apply--in a fair arbitration framework, I would hope that the same considerations would dictate whether multiple cases get consolidated. The problem is, in this case the language of the contract specifically didn't make that provision--or, apparently, any provision into consolidating any classes of cases. That's the whole reason they're in real court. All we know is that Patreon decided to change the contract to allow consolidation. From that, we can safely infer that they thought consolidating cases was worthwhile. Beyond that, we can't be sure. It's possible that they were motivated by practicality and fairness--given that they have better access to the big picture than any individual plaintiff, it's possible that they every case as similar, and they honestly think this will be more efficient for everyone involved. It's probable they see this as money saving in the long run, one way or another.

Beyond that, we can't know for sure. There are strategic reasons to consolidate, beyond saving money on their own lawyers and arbitration costs. Depending on what the rules for arbitration are, forcing all of the plaintiffs into a single arbitration could substantially impair their ability to make their individual cases. It might be simple retaliation. These suits do seem "harassing" in the sense that they're deliberately timed to aggravate Patreon. That does not, however, imply that they are individually without merit. The goal of a lawsuit is to win, and quite frankly, a lot of people who are 100% in the right end up with a very weak legal case due to lack of resources or access to evidence.

Timing the cases so that Patreon has to deal with a spike of legal work at once--rather than sequentially so that Patreon might not even exceed whatever non-refundable retainer they normally pay--feels like it's fighting dirty, but we can't assume it was a fair fight to begin with.

Yes, and hearsay is not allowed in some cases (from what I gather, actually, there are so many exceptions to hearsay that it is more frequently allowable as testimony than not, but I'm no lawyer and could have heard wrong).

That there are exceptions to the American Rule does not mean that there is no American Rule. I was deliberately speaking generally.

With respect, you weren't though. You were stating the rule as a snarky response to someone's statement specifically on a topic that fits pretty squarely in what is probably the biggest single exception. While your comment might have been technically correct (the best kind of correct), in context it was highly misleading.

To use your example, it would be accurate for your to say in general, "Hearsay is not allowed in court cases." It would be... misleading at best, if somebody testifies, "And then he shouted at me to hand over my wallet or he'd shoot me," and your response is, "That's not how hearsay works."

[tomaO2]

Um, does this mean that it's not a specific California law that is forcing Patreon to pay for all legal fees but, rather, the old terms of services that forced it to be this way?

I guess that would have to be the case, now that I think about it, because I read that the new terms of service are preventing that from happening again. I was sure there was some recent California law that made this lawsuit suddenly practical...

Any idea why Patreon missed a loophole like this?

[Peelee]

Probably not 15 times the number of lawyers, but depending on the circumstances, very possibly 15 times the expected number of billable hours. It depends substantially on procedural and circumstantial specifics. You say the "same complaint," but what does that mean?

The whole reason (in civil court, not in arbitration) class action litigation needs to be certified by a judge is that a neutral party has to balance the benefits of consolidation versus making sure that every party gets their case heard on their own merits. Generally, the judge weighs how similar the complaints really are. It's easy to say, "We all broke a leg at Disney" or "Patreon didn't give us all our money" is just a bunch of the same claim and that it should be decided en masse. But then you have to ask, how did that happen? Did everyone break their leg falling out of Space Mountain because a seat belt strap broke? Did everyone break their leg on different rides, but they still all fell out because of of seat belts so close enough? What if some fell out because of seat belts, some had fixtures fall on them, and some slipped and fell because an industrial cleaning robot flooded the walkways, but the plaintiffs want to consolidate because they all were all direct results of the Disney Guild of Maintenance, Local 55?

However, this seems to be that rare case in which we do know exactly how it happened: Patreon banned a person they were patrons of. That single focal point is the same across the board; everyone broke their metaphorical legs on Space Mountain because the left tire came off the ride, slamming all their left legs into the guardrail.

I may not know how Space Mountain works.

With respect, you weren't though. You were stating the rule as a snarky response to someone's statement specifically on a topic that fits pretty squarely in what is probably the biggest single exception. While your comment might have been technically correct (the best kind of correct), in context it was highly misleading.

To use your example, it would be accurate for your to say in general, "Hearsay is not allowed in court cases." It would be... misleading at best, if somebody testifies, "And then he shouted at me to hand over my wallet or he'd shoot me," and your response is, "That's not how hearsay works."

Fair. However, they were basing their assertion on the idea that the complaints fall under employment law, so even if I'm riding on the "technically correct but come on dude" train, I still feel at least somewhat vindicated.

Also I would be perfectly willing to join you in song and dance regarding bureaucracy.

Any idea why Patreon missed a loophole like this?

Assuming this is the case (which most of us cannot state one way or the other), companies are not perfect. It's nowhere near as big a mistake as McDonalds' '84 Olympics promotion, for example.

[Xyril]

Um, does this mean that it's not a specific California law that is forcing Patreon to pay for all legal fees but, rather, the old terms of services that forced it to be this way?

I guess that would have to be the case, now that I think about it, because I read that the new terms of service are preventing that from happening again. I was sure there was some recent California law that made this lawsuit suddenly practical...

Any idea why Patreon missed a loophole like this?

From what I can see so far, they didn't miss the loophole, they put it in. In pretty much any situation where one party is a bigger entity that enters into the same general contract with a lot of other parties, it's that one big guy who actually drafts the contract in question. It's simply more efficient if their thousands or millions of contracts aren't individualized more than absolutely necessary, and in that case it would be weird if their first client drafted a contract, Patreon accepted, and then liked it so much that they used it as their offer for every other client they have.

As I mentioned earlier, they probably have a reason to do so. In these relationships, there's a practical limit to how much the company can negotiate with individuals, so the meta-negotiation is pretty much sitting down the with lawyers, and figuring out a contract that gives you what you absolutely need, while hopefully not scaring off too many potential partners/clients/users/etc. That's why this case is interesting to me. Very one sided, "If the company prevails, you pay our legal fees. If you prevail, you don't pay our fees but you still pay your own" provisions are so common that they generate mild outrage but few real concessions by the big companies who use them.

So Patreon having doing the same, or having no fee-shifting at all, wouldn't have raised an eyebrow on its own. So I really have no clue why they decided to go out of their way to give what is essentially a huge concession to everyone. My best guess is that they figured that enough creators or patrons have been burned by similar clauses in the past that they're more wary than the typical customer, and being able to point to how they're different was an important of their business strategy. Whether they now still think it was a worthwhile concession is an open question.

[tomaO2]

I see, so it was basically an added incentive to entice people to join that were leary of bad practices.

My understanding is that they do not think this is beneficial, and the current terms of service have been altered so that this will not be possible for current users of the website. I'm not quite sure how the new rules work, I would guess that if there are over X number of claimants, it will be rolled over to a class action lawsuit?

Do you know how the new ToS rules compare to the old one?

[Corvus]

Saw this talked about elsewhere and it is a sucky situation, given a number of creators I follow rely on Patreon.

{scrubbed}. The problem is that Patreon may have broken the law in the manner they did it and their TOS may also have some illegalities in it. Part of it states that you waive your right to trial by jury, which cannot happen according to the law.

Basically Patreon, or at least their lawyers, stuffed up, and a lot of other people may end up paying the price.

[Bohandas]

If there were ever any serious trouble for the company, I'm fairly confident another company with a similar operation would spring up before long. There might even already be a similar company operating on a smaller scale.

There are several of them, including Liberapay, Subscribestar, and others. If Patreon goes belly up it won't cause any problems. If anything it will be a good thing, because currently they are becoming a monopoly.

[Rogar Demonblud]

The problem is that Patreon may have broken the law in the manner they did it and their TOS may also have some illegalities in it. Part of it states that you waive your right to trial by jury, which cannot happen according to the law.

You can totally waive your right to trial by jury. In fact, given how easy it is to manipulate a jury, requesting a bench trial is often something to consider. And in any case, the ToS apparently says you have to try arbitration before filing a suit, which is not waiving a jury, just fulfilling a pre-condition (not conceptually different than a divorce court requiring couples counseling before proceeding to trial---it's all about getting things done in a way that doesn't use up too much of the court's limited time).

[Peelee]

You can totally waive your right to trial by jury. In fact, given how easy it is to manipulate a jury, requesting a bench trial is often something to consider.

There's an old joke - if you're innocent, you want a bench trial. If you're guilty, you want a jury.

[Rogar Demonblud]

Yup. Unfortunately, too many people think it HAS to be a jury trial.

But this is getting political, so we better drop it before a certain dragon drops in.

[snowblizz]

I'm hoping the LeagelEagle youtube channel takes this up. He's very good at describing stuff like this.

Learned of the trial by bench thing watching the vids. The fact that they aren't boring topical law descriptions helps, though it means I can't directly link to vids about the various things.

[Chen]

So what Im confused at, is why the followers of some channel even have any standing to file a claim that requires arbitration if the channel is closed. Wouldnt that be like people who watch a TV show suing a television station for cancelling a show (even if the show were cancelled for illegal reasons)?

[Rockphed]

Yes, and hearsay is not allowed in some cases (from what I gather, actually, there are so many exceptions to hearsay that it is more frequently allowable as testimony than not, but I'm no lawyer and could have heard wrong).

My memory is that hearsay is allowable if the person being quoted is the defendant in a criminal case or if it is a description of an event offered spontaneously during the event. So if I say "I'm gonna kill George" and then George gets murdered, then people can testify that they heard me say that. Or if a car runs a red light and I didn't see it but I heard someone say "that red car just ran a red light!" I can testify to that. What isn't allowable is to have second hand testimony ("George said that Rockphed broke in to his store" or "Peelee tells me that 2D8hp is very attractive and often correct") because you want to get the people with first hand knowledge in to testify so you can properly cross examine them.

There's an old joke - if you're innocent, you want a bench trial. If you're guilty, you want a jury.

If the law is on your side, you pound the law. If the facts are on your side, you pound the facts. If neither is on your side, you pound the table.

[Rogar Demonblud]

First hand knowledge is not hearsay. You literally witnessed what you are reporting. The red car example is hearsay, and a good lawyer would bypass you for the person who told you (juries like hearing from the source).

[Rockphed]

First hand knowledge is not hearsay. You literally witnessed what you are reporting. The red car example is hearsay, and a good lawyer would bypass you for the person who told you (juries like hearing from the source).

Yes, the red car example is hearsay. My point was that the number of exceptions to "no hearsay" fall into 2 main categories.

And pretty much the only time I could see bringing in people who heard an exclamation instead of the exclaimer would be if the exclaimer is giving testimony contrary to their exclamation and you want to convince the jury that they shouldn't be believed.

At any rate we are quickly passing beyond my knowledge of legal matters. The only other thing I remember is that lawyers are supposed to ask the witnesses they call open-ended questions but can ask yes/no questions when they cross examine people.

[Peelee]

Yes, the red car example is hearsay. My point was that the number of exceptions to "no hearsay" fall into 2 main categories.

Margaret Hagan has great ideas about design and legal studies. I totally recommend checking out some of her flowcharts, if you're interested. I am also not a lawyer, so take that recommendation as you will.

[Tvtyrant]

The issue here as I understand it is with the way arbitration was designed. Arbitration disputes have a 2 week response time and hearings have to be heard promptly. If this is not done, the persons not responding forfeit.

What this means in practice is if I file 15,000 simultaneous arbitration disputes the corporation cannot meet the deadlines and a majority of those are going to be paid out. Corporations have lost attempts to change this as they designed the rules for arbitration and forced the client to agree to them. It's not just Patreon, this is happening across many industries.

[Rogar Demonblud]

That's why you have a boilerplate reply form where all you have to do is fill in the name and case number. Then you have, depending on jurisdiction, up to 6 months to amend the reply.

[Tvtyrant]

That's why you have a boilerplate reply form where all you have to do is fill in the name and case number. Then you have, depending on jurisdiction, up to 6 months to amend the reply.

Patreon uses Jamsadr. Everyone interested can just read the rules involved.

[Corvus]

You can totally waive your right to trial by jury. In fact, given how easy it is to manipulate a jury, requesting a bench trial is often something to consider. And in any case, the ToS apparently says you have to try arbitration before filing a suit, which is not waiving a jury, just fulfilling a pre-condition (not conceptually different than a divorce court requiring couples counseling before proceeding to trial---it's all about getting things done in a way that doesn't use up too much of the court's limited time).

They are based in California, and the way that I heard it is that you can only waive your trial by jury when it goes to court according to Californian law, not before hand. The way the TOS is worded makes it sound like you are waiving that right just by agreeing to the TOS, hence why it is not legal.

[Xyril]

Yes, the red car example is hearsay. My point was that the number of exceptions to "no hearsay" fall into 2 main categories.

There are things that literally are not hearsay, and there are exceptions to the hearsay rules that allow literal hearsay to be admitted.

As a rough rule, if you're trying to prove that the third-party statement is literally true, it's hearsay. In your example, it would be hearsay to use the statement to prove that the guy killed George. However, you can prove things like state of mind: Regardless of whether or not you killed George, we can infer from you making that statement that you at one point had intent to kill George. Sometimes, the statement is the act itself: If George was right there, and the way you were acting when you threatened George made it seem like it wasn't a joke or exaggeration, then under the right circumstances the threat itself might be against the law. Again, whether it was true (you followed through and killed George) isn't the fact you're trying to prove, so it's not hearsay as it's being used. These exceptions are as universal as things get in law, because they're largely based on language and semantics.

The exceptions are cases where you are using it as hearsay evidence (proving the third-party statement is true), but the rules of procedure allow their use anyway. The reasoning for most exceptions is that the main problem with hearsay--credibility--is less suspect under those exceptional circumstances. YMMV whether you buy that reasoning. Obviously, allowable exceptions can vary widely, even between states. The idea is that if you know you're going to die, for example, or make an spontaneous utterance, you're less likely to lie.

[tomaO2]

I found an article talking about one of the arbitration cases. I believe it's the first ruling of all the outstanding cases.

Arbitrator apparently ruled that Patreon does have the contractual right it claims to kick anyone off its platform at any time without any reason, regardless of whether the user being kicked off has violated any rules or community guidelines or not. That right to terminate any user at any time at will was the reason he gave for granting Patreon's request for summary disposition.

Arbitration cases don't really set precedents for other cases, but it's showing that the bar seems to be extremely high for whom they can kick off the website.

I really don't care for this level of blanket immunity. It seems to give internet companies a level of protection that is not possible with physical stores. If it's this expansive, then why even bother having terms of service?

[Razade]

This was always going to be how it was going to go. Patreon is a service and services are allowed to deny access to their services regardless so long as they're not discriminatory. Patreon can't kick people off because of race or anything like that, there are limits outlined by other legal precedent and rules. This just reinforces what is probably in their ToS already though I haven't looked. If Patreon's ToS is like most ToS it's on there.

[Rogar Demonblud]

The last time I tried to read a ToS, I gave up after an hour. Now I just assume they intend to screw me in case of any difficulties, and if I'm not okay with that I don't click 'accept'.

[Xyril]

I really don't care for this level of blanket immunity. It seems to give internet companies a level of protection that is not possible with physical stores. If it's this expansive, then why even bother having terms of service?

It's not in fact all that expansive. Immunity implies that you're free from the consequences of doing something wrong, which implies a duty on the part of Patreon. In many (maybe most) places in the U.S., the starting point for business relationships is "at will." This means either party (customer, merchant, employee, employer, etc) can general exit their relationship at any time. The law steps in sometimes to mandate a slightly different "default" when someone decides that public policy would be served by imposing a bit more stability (this happens often in residential rentals and employment.)

(Also, employment's a mess, since even in at will states whether you're fired for cause can have an impact on benefits and other obligations, so litigation over whether a firing was justified can still be relevant even if everyone acknowledges that the employer has the right to fire without cause.)

Generally, a company has no obligation to let you remain a member/customer/user unless they specifically promise to do so in the contract. In the absence of explicit language doing so, the law generally won't infer such a promise except when circumstances give you a specific reason to do so. For example, if you buy an annual pass to Disney, and Disney forgot to add the part of the contract governing your period of uses, then the law would probably recognize that it's reasonable to expect to be allowed to use your annual pass for the year without arbitrarily revoking it. On the face of it, if you buy something called a yearly pass, you generally expect to have it for a year. (In practice, I'm guessing they tell you exactly what sort of bad behavior could get you kicked out.) The same might apply to monthly subscription services or the like--it would seem deceitful to take money for a month of access and then deny access before time is up, without any justification.

For something like Patreon or twitter, there are some factors that might argue in favor or more rights for the user. For example, being able to keep a cash account on the service should generally prevent them from terminating you arbitrarily and denying you access to your accumulated money. The problem is that Patreon sounds much more transactional to me--they provide a secure, convenient way to support artists with regular payments, in exchange for getting a cut of every payment. As a way of making money, it makes sense for them to make recurring payments convenient and to offer that service widely, but they don't really promise indefinite access to the service. It's like a vendor offering to sell you a Disney ticket online, automatically every week. You pay them money for the ticket, and that's all they owe you. If you specifically buy a season pass, or you pay a special fee for guaranteed automatic ticket sales for a year, or if for whatever reason they specifically promise that you'll be able to use the service for a year, then they can't yank the rug out from under you. From what people have posted, however, it doesn't seem like Patreon made any promises like that.

[Peelee]

I found an article talking about one of the arbitration cases. I believe it's the first ruling of all the outstanding cases.

Arbitrator apparently ruled that Patreon does have the contractual right it claims to kick anyone off its platform at any time without any reason, regardless of whether the user being kicked off has violated any rules or community guidelines or not. That right to terminate any user at any time at will was the reason he gave for granting Patreon's request for summary disposition.

Arbitration cases don't really set precedents for other cases, but it's showing that the bar seems to be extremely high for whom they can kick off the website.

I really don't care for this level of blanket immunity. It seems to give internet companies a level of protection that is not possible with physical stores. If it's this expansive, then why even bother having terms of service?

Physical stores can generally ban or refuse service to anyone for any reason, barring a very few exceptions that I won't go into. It's not different at all.

And that's ignoring that Patreon isn't a store. It's a service provider. That's irrelevant, since the same holds true for physical service providers, but I felt the difference should be noted.

[BeerMug Paladin]

I would guess that the "right to refuse service" is generally written in the vague terms it is to get around having to "prove" that someone is deliberately being as antagonistic towards violating the terms of service as possible without technically breaking any rules. If you set a standard for yourself that you must prove those things, then you're sometimes restricting your own ability to enforce those rules. In many cases, it's not quite possible to prove such activity isn't an honest mistake or there was really an alternative intent, even if it may seem obvious to some observers.

Following the letter of the law but not the spirit of the law exists as a concept for a reason.

Anyway, if you give yourself an arbitrary standard you can enforce for any/no reason needed, then you can safely just use a judgement call to take care of any potential issues on your own platform. The public rules are purely a guideline for outsiders coming in who may want to interact, so they can make an educated guess as to what kind of activity they will be allowed to engage in. This is why having clearly written rules for outsiders to read over is favorable. It's not for the benefit of the platform holder, it's for the benefit of the outsider(s) coming in to participate on the platform.

If the user's best guess as to how to moderate their own behavior isn't sufficient to keep them from seemingly engaging in prohibited activity, then the arbitrary standard can be cited, and the offending party can just be removed with little hassle. Of course there may be errors of judgement and honest miscommunication going on, but since the right to refuse service is arbitrary, you don't have to worry about proving your case. You merely have to be only concerned with your own ability to recognize when and if your own judgement call is sound.