Forced arbitration from LG appliances

Forced arbitration from LG appliances
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#22

I would still sue. The arbitration clause is a defense that they would need to assert in response to your suit (hiring a lawyer to do so) - and very likely would instead try to resolve the issue with you.


#23

Not every dispute is so straightforward. Also, if you believe you can do better on your own, nothing stops you from opting out of a class action and pursuing the matter individually.


#24

That’s a bit disingenuous – a $500 problem is never solved by a $50 class action check alone. They’ll usually pay to fix the problem. The class action checks I receive are usually for things I didn’t even know were a problem, or were too small to pursue on my own (like asking for ZIP code while processing a credit card payment, illegally recording phone conversations, or overcharging me for computer parts or airline tickets due to corporate collusion, allegedly).


#25

If you didn’t sign anything, it is probably not binding.


#26

Not universally true, unfortunately – it depends on the exact circumstances and applicable state law. There’s a 9th Circuit case, Norcia v. Samsung, applying California law, where Samsung lost on this issue, but IIRC Samsung has also had success in at least one other jurisdiction. There’s also some older precedent that’s unfavorable, like Hill v. Gateway 2000 in the 7th Circuit.


#27

As a starting point on the replies to my post, I’m not in favor of mandatory binding arbitration in consumer agreements. If there was a panel on the pros and cons of mandatory binding arbitration for consumers, I’d be arguing on the con side. That said, the provisions exist in lots of contracts, and I think there are situations where consumers can take advantage of the terms of those provisions.

This is a separate issue. I find this method used by LG to be wholly unacceptable, and don’t believe this should create any sort of binding contract. This sort of “notification” based contract has always seemed inappropriate to me. It’s similar to shrink-wrap software contracts, but in those cases, at least now, consumers are well aware of this method of contracting. Whether that’s fair or not is still debatable, but it’s surely more fair than what LG has done here given the standard practice. I’m still opposed to shrink-wrap contracts in all consumer transactions.

A problem for sure, but that’s just how the law works. It’s not exactly LG’s fault that consumers don’t understand the terms in a contract. And no, I don’t think LG is intentionally using complicated terms - they’re using terms that other companies have used and have survived scrutiny. Most contract writing lawyers don’t like to be trailblazers with regard to language.

I think this still goes to (1) above, but if you’re just referring to arbitration provisions generally, the company is giving the consumer an opportunity to choose between two contractual terms. Given the choice of allowing a consumer to opt-out, or not allowing a consumer to opt-out, surely the choice to opt-out is beneficial to the consumer (assuming the contract would otherwise be enforceable without providing an option to opt-out).

This is again, a separate issue. However, the policy behind allowing class action lawsuits isn’t about providing benefits to would-be plaintiffs. It’s about deterrence, and class action lawsuits generally involve systematic bad behavior. So on a macro scale, class action waivers are bad for consumers, but on an individual basis there isn’t much detriment to the consumer for not being able to participate in a class action.

I have zero knowledge of FINRA arbitration (or the securities industry at all), but I have seen arbitration provisions in consumer contracts where the claimant picks one arbitrator, respondent picks one arbitrator, and those two arbitrators pick the third. These kinds of terms in the provisions make the process less subject to bias.

It would be very inappropriate. First, companies simply wouldn’t be able to effectively defend claims. The reason for statutes of limitations isn’t for a wrongdoer to be able to say “phew, I’m free.” It’s just unfair to subject people and companies to an unlimited time period in which people can bring civil claims.Documents get destroyed, people die, people/companies lose access to people who may be able to defend them, and memories fade.

Second, companies have to place reserves for potential liabilities on their balance sheets. As a practical matter, passing a law like this would require companies to analyze their potential liabilities. I don’t know what the long-term effects of this would be on the financial markets, but I do know it’s a good way to erase all the gains of the last several years.

Third, and possibly the most scary, is the slippery slope argument. And I do admit that there are problems with this argument, but I don’t see a distinction between arbitration agreements and things that many people may find even more egregious. As one example (and if you’re already in favor of this, surely you can imagine other things which you wouldn’t be in favor of, with the same effects), what if Roe v Wade is overturned and a state all of a sudden passed a law that abortions are retroactively illegal, and any doctor who has performed an abortion is immediately subject to losing their license, despite the fact that abortions were legal at the time they performed the abortion? This doesn’t seem totally out of the realm of possibility.

As an aside, if you’re interested in reading cases, there was a Supreme Court opinion a couple years ago on the topic. I don’t know the case name, but CalPERS was one of the parties. I don’t recall the details, but they were discussing tolling of SOLs and analyzing the applicability of American Pipe.


#28

I agree with that concern. But I would note that this wouldn’t be entirely without precedent – serious violent crimes (like murder) usually do not have an SOL, though of course that varies by state. There’s no question that, for all the reasons you mentioned, it’s probably going to be significantly easier to defend against, say, an accusation made today of an attempted rape that occurred in the last year than one in the 1980s. If out-of-SOL claims were revived, do you think taking a page out of criminal law and applying the higher “reasonable doubt” standard might balance things better?

I’d also consider the justification of the delayed discovery rule some jurisdictions have on civil fraud causes of action. If you can’t escape legal consequences for fraud by running out the clock while the victim hasn’t yet discovered the fraud, why should it be possible to escape legal consequences by running out the clock while the victim has no way of effectively pursuing the claim? (This argument works better on smaller claims, where individual arbitrations or small claims actions aren’t really practical, or larger claims where the cost of proving the claim will be more expensive than the relief any individual person/entity is entitled to, as was the case in Amex v. Italian Colors.)

I see the argument here, particularly with respect to the impact on everyone’s 401(k), IRA, pension, etc., but at the same time it feels quite similar to “we can’t let the banks fail or else” (which I guess is technically true, though that could have been handled much better). It’s troubling.

This is a persuasive argument, and I think “slippery slope” is appropriate. I do see somewhat of a distinction, though: revoking medical licenses for performing what was a lawful act when it occurred would be a state action, while reviving private civil claims and enabling the aggrieved party/parties to litigate those claims on their own would not be. The former, while not technically criminal, feels closer to an ex post facto clause issue. Unfortunately, I suspect (but hope I’m wrong) something like this would have a good chance of surviving scrutiny, since it’s not a retroactive application of a criminal law.

Thanks. Looks like it’s CalPERS v. ANZ Securities.