posted on September 8, 2002 10:49:00 AM new
Judge says PayPal's arbitration rules unfair
Company attempts to isolate itself from challenges, he rules
Bob Egelko, Chronicle Staff Writer
Saturday, September 7, 2002
A federal judge says PayPal, the fast-growing online payment service, has a mandatory arbitration policy that is unfair to customers who complain that their accounts are being mishandled.
The ruling by U.S. District Judge Jeremy Fogel of San Jose allows customers to take their grievances to a jury rather than an arbitration panel. Fogel also refused to dismiss a lawsuit that seeks class-action status on behalf of thousands of PayPal customers nationwide.
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/09/07/BU232114.DTL&type=business
[ edited by Flaoisland on Sep 8, 2002 10:49 AM ]
posted on September 8, 2002 08:33:19 PM new
Club1man, will this mean you can have your case heard in front of a jury/make the arbitration ruling void (if the order isn't reversed on appeal)?
posted on September 8, 2002 09:47:38 PM new
I don't know Andrew, but if it doesn't help me it will help thousands of others and I hope it brings these arrogant thieves down.
posted on September 9, 2002 10:23:41 PM new
This ruling opens it up so that suits can be filed anywhere. I was talking to people in the UK and Germany and they are planning to file both individual and class action suits. PAYPONZI will be sending lawyers all over the world.
remember the First commandment of the internet
[ edited by club1man on Sep 9, 2002 10:24 PM ]
posted on September 10, 2002 06:34:02 AM new
I just love Coonr sometimes when he makes the comment of "Nothing to say. It don;t mean anything, shoudl PayPal decied to appeal and get a stay." This does mean something, and that it means that you do not have to give up your rights to use their service. Will it get over turned, well, remember, this is the 9th circuit, the same circuit that thought God should not be in the pledge. Needless to say, this US Circuit is one of the most liberal in the country and one of the most anti-business. Thier chances of getting this over turned are not good
posted on September 10, 2002 07:38:40 AM new
Who is talking about a judge in UK or Germany. This Judge is in San Jose, he is part of the 9th circuit. Since PayPal does business out side California, the 9th Circuit does have jurisdiction over PayPal, that is unless in your world San Jose has been taken over by either UK or Germany. This Federal Judge even has the power to over rule the state courts. Come on Coonr, admit this hurts PayPal in that they can not force people into giving up thier rights to a Jury Trial. PayPal lost this battle, and will have a hard time getting this one back.
posted on September 10, 2002 01:08:47 PM new
This ruling means that you do not have to submit to arbitration in San Jose and you may file suit against PAYPONZI where ever you are and they will have to come to the court it was filed in. PAYPONZI will not be able to hide behind an unfair arbitration clause, that takes peoples rights away and forces them to travel to a KANGAROO COURT on their home ground.
posted on September 10, 2002 08:26:28 PM new
Coonr, do you think the U.S. Supreme Court would take this case? If not, the 9th circuit does have the final word on this issue.
posted on September 11, 2002 08:31:33 AM new
Why would the Supreme court NOT hear the case? A voluntary contract (after all this service is not a necessity) freely entered into by a company and a consenting adult.... sounds like basic freedom to me.
posted on September 11, 2002 09:00:05 AM new
The reason why they would not overturn this decision is that not being able to sue in my local jurisdiction is completely unfair and that is way the judge ruled the way he did. I guess you will now admit that the 9th circuit has jurisdiction over paypal now. Looks like your running out of arguments now. Is the justic going to be the "hostile" toward your employers? I personally think this is the first of many defeats in the court system.
posted on September 11, 2002 12:15:30 PM new
"Why would the Supreme court NOT hear the case? A voluntary contract (after all this service is not a necessity) freely entered into by a company and a consenting adult.... sounds like basic freedom to me."
So does the 7th ammendment. A contract can not say "you waive the right to sue completely in any form" (I know this isn't what PayPal's agreement says but contracts can not have whatever the companies want in them). And after all, the Supreme Court hears very few cases (maybe from 100-150) out of thousands. But who knows, maybe they will hear the case. That doesn't mean it will get overturned.
And what does PayPal have to fear having cases in front of a jury/small claims court? Seems like they like making you go to arbitration so you will give up knowing the arbitration fees/flights to California will almost always be more than your claim.
posted on September 12, 2002 09:13:43 PM new
Well I just got the impartial arbitrators decision in the mail. PAYPONZI spent 340k to get 14k out of me. What's the percentage on that. About $24 for every dollar WOW that's good business sense. But then again it wasn't their money it was the customers. Now they think it's over,but it's just started. NOW thanks to the court ruling lawyers all over the world are filing suits. The UK, Canada and Germany are just 3. PAYPONZI is now advertising for lawyers that will travel. Also because of this ruling I'll get my day in court. Then I plan to invite them to come to a TEXAS court. We'll so them some go ole TEXAS hospitality.
WONDER HOW MANY MILLIONS THEY WANT TO GIVE THEIR ATTORNEY'S FOR LITTLE OLE ME.
Might be Ebay will change their mind about taking on this dirt bag companies dirty linen.
posted on September 13, 2002 06:47:58 AM new
The impartial arbitrator said that 4 of PAYPONZI'S employees testimonys are to remain confidential. In fact the one he didn't say was confidential was, the VP of customer service at the time---he was the only one that didn't lie. Because of the fact that this will go before a real judge, I've been told it's best not to violate the orders. By the way we didn't have Damon testify and niether did they, probably because anything he said would be insignificant.
I noticed you didn't comment on the fact that PAYPONZI spent 25 to 1 and also because they broke me they can't even get that back.
posted on September 14, 2002 11:41:47 PM new
Sounds like they considered you a crook, and was willing on priciple to spend the money to put you out fo business.
posted on September 15, 2002 12:15:51 PM new
I'm no lawyer, but I do read the news and sometimes the news can be confusing. If you look at the two articles below it would seem there can be two ways to read this. PayPal's arbitration agreement is still in their TOS and their arbitration agreement is exactly the same as you see for many, many companies in their TOS. I'm thinking this wasn't a blanket ruling on arbitration, but simply a ruling on two class action lawsuits in regards to arbitration. Feel free to disagree with my opinion or dismiss it. I won't argue about it because I a bit busy at the present, and it is a waste of time to argue with some in this forum.
BTW - If a voice from God tells you not to use PayPal I recommend you heed the advice. If someone indicates that God has commanded him to tell others not to use PayPal you might want to get another opinion from a second prophet.
posted on September 15, 2002 01:13:34 PM new
When I spoke with the lawyer that was involved in the case he said the judge ruled the arbitration contract unconscionable. It's possible that it will set a president that would effect many contracts. We'll just have to wait and see.
UNCONSCIONABLE CONDUCT What is unconscionable conduct? Unconscionable conduct is any behaviour which has the effect of unlawfully placing the other party to a transaction at a serious disadvantage. Section 13 of the Fair Trading Act
posted on September 16, 2002 04:29:53 AM new
I am no lawyer either, but if I understand the first article correctly, it states that the Arbitraation rule is not enforceable and that you do have the right to take some one to court.
posted on September 16, 2002 10:15:59 AM new
The first article Uaru links to is simply what Paypal stated about the ruling. It can't be more clear arbitration is out for Paypal. Here is another article
http://www.theregister.co.uk/content/6/27028.html
The ruling was issued on August 30 by US District Judge Jeremy Fogel of San Jose, who decided that people should not have to use PayPal's private arbitration system to settle disputes. Instead of customers having to travel to Santa Clara County for arbitration, they should be able to get them settled in court, he said.
posted on September 16, 2002 09:15:15 PM new
Stoney,
Perhaps you can tell us what you think of this as a clause for the Terms of Use?
Arbitration
Any controversy or claim arising under or related to this Agreement shall be settled by arbitration in accordance with the International Arbitration Rules of the American Arbitration Association before a single arbitrator appointed by mutual consent of the parties to this Agreement. The language of the arbitration shall be English.
posted on September 16, 2002 09:58:52 PM newFrom the judge UNCONSCIONABLE CONDUCT What is unconscionable conduct? Unconscionable conduct is any behaviour which has the effect of unlawfully placing the other party to a transaction at a serious disadvantage. Section 13 of the Fair Trading Act
posted on September 17, 2002 06:20:40 AM new
The quoted Arbitration Clause is from eGold. Glad to see you finally condemn them. Will you be closing you account there, since, according to you, their conduct is UNCONSCIONABLE ?
posted on September 17, 2002 09:48:56 AM new
No I won't be closing my http://e-gold.com/ account. I've done a million dollars in bussiness with them and had no problems. They are honest. I do think their arbitration clause will need to be dealt with and probably will. Look at c2it's arbitration clause. At least they explain it.
XXI. RESOLUTION OF DISPUTES BY ARBITRATION
PLEASE READ THIS SECTION OF THE TERMS AND CONDITIONS CAREFULLY. IT PROVIDES THAT EITHER YOU OR WE CAN REQUIRE THAT ANY CONTROVERSY OR DISPUTE BE RESOLVED BY BINDING ARBITRATION. ARBITRATION REPLACES THE RIGHT TO GO TO COURT, INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING. IN ARBITRATION, A DISPUTE IS RESOLVED BY A NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR JURY. ARBITRATION PROCEDURES ARE SIMPLER AND MORE LIMITED THAN RULES APPLICABLE IN COURT. THE DECISION OF THE ARBITRATOR IS FINAL AND BINDING.
1. Agreement to Arbitrate Disputes. You agree that either you or we may elect to require that any dispute between us, including any dispute concerning your c2it Account, c2it Membership, application for membership in the c2it service, or these c2it Terms and Conditions be resolved by binding arbitration. These provisions will not, however, apply to those disputes specifically excluded below.
2. Disputes Covered by Arbitration. Any claim relating to or arising out of your c2it Account, c2it Membership, application for membership in the c2it service or these c2it Terms and Conditions, will be subject to arbitration. Disputes include not only claims made directly by you, but also made by anyone connected with you or claiming through you, such as a joint account holder, account beneficiary, or a representative or agent. Disputes include not only claims that relate directly to Citibank, but also its parent, affiliates, successors, assignees, employees, and agents, and claims for which we may be directly or indirectly liable, even if we are not properly named at the time the claim is made. Disputes include claims based on any theory of law, contract, statute, regulation, tort (including fraud or any intentional tort), or any other legal or equitable ground, and include claims asserted as counterclaims, cross-claims, third-party claims, interpleaders or otherwise. Disputes include claims made as part of a class action or other representative action, it being expressly understood and agreed to that the arbitration of such claims must proceed on an individual (non-class, non-representative) basis. Disputes also include claims relating to the enforceability or interpretation of any of these arbitration provisions.
3. Disputes Excluded from Arbitration. Disputes filed by you or by us individually in a small claims court are not subject to arbitration, so long as the disputes remain in such court and advances only an individual claim for relief. In addition, disputes involving claims that you have infringed or have threatened to infringe our intellectual property rights are not subject to arbitration.
4. Commencing an Arbitration. The arbitration must be filed with one of the following neutral arbitration forums: American Arbitration Association; National Arbitration Forum; or JAMS. If you initiate the arbitration, you must notify us in writing at Citibank, c2it service/Office of the General Counsel, One Court Square, 38th Floor, Long Island City, NY 11120. If we initiate the arbitration, we will notify you at the last known physical or e-mail address on file with us in your c2it Membership. You may obtain a copy of the arbitration rules for these forums, as well as additional information about initiating an arbitration by contacting these arbitration forums at the following addresses:
American Arbitration Association:
335 Madison Avenue - 10th Floor
New York, NY 10017-4605
www.adr.org
National Arbitration Forum:
P.O. Box 50191
Minneapolis, MN 55405
www.arbitration-forum.com
JAMS:
1920 Main Street Suite 300
Irvine, CA 92610
www.jamsadr.com
The arbitration shall be conducted in the same city as the U.S. District Court closest to your home address, unless the parties agree to a different location.
5. Administration of Arbitration. The arbitration shall be decided by a single arbitrator, unless either party to the arbitration requests a panel of three arbitrators in which case the arbitration shall be conducted by a panel of three arbitrators (said arbitrator or arbitrators hereinafter referred to as "the arbitrator". The arbitrator shall decide the dispute in accordance with applicable substantive law consistent with the Federal Arbitration Act. The arbitrator shall be empowered to award any damages or other relief provided for under applicable law and will not have the power to award relief to, or against, any person who is not a party to the arbitration. The decision rendered by the arbitrator shall be in writing; however, the arbitrator need not provide a statement of his reasons unless one is requested by you or us. The award of the arbitrator shall be final and binding, subject to judicial intervention or review only to the extent allowed under the Federal Arbitration Act. The award of the arbitrator can be entered as a judgment in any court having jurisdiction.
6. Costs. The party initiating the arbitration shall pay the initial filing fee. If you file the arbitration and an award is rendered in your favor, we will reimburse you for your filing fee. If there is a hearing, we will pay the fees and costs for the first day of that hearing. If either you or we request a panel of three arbitrators, the party making the request shall pay the fees of those additional arbitrators unless the arbitrator rules otherwise. All other fees and costs will be allocated in accordance with the rules of the arbitration forum. However, we will advance or reimburse filing and other fees if the arbitrator rules that you cannot afford to pay them or finds other good cause for requiring us to do so. Each party shall bear the expense of their respective attorneys, experts, and witnesses and other expenses, regardless of who prevails, except to the extent the arbitrator assess costs of the arbitration to either you or us.
7. No Class Action or Joinder of Parties. You and we agree that no class action, private attorney general or other representative claims may be pursued in arbitration, nor may such action be pursued in court if either you or we elect arbitration. Unless mutually agreed to by you and us, claims of two or more persons may not be joined, consolidated, or otherwise brought together in the same arbitration (unless those persons are joint account holders or beneficiaries on your account and/or related accounts, or parties to a single transaction or related transaction); this is so whether or not the claim may have been assigned.
8. Right to Resort to Provisional Remedies Preserved. Nothing herein shall be deemed to limit or constrain our right to resort to self-help remedies, such as the right of set-off or the right to restrain funds in an account, to interplead funds in the event of a dispute, or to comply with legal process, or to obtain provisional remedies such as injunctive relief, attachment, or garnishment by a court having appropriate jurisdiction.
9. Governing Law. You and we agree that our relationship includes transactions involving interstate commerce and that these arbitration provisions are governed by, and enforceable under, the Federal Arbitration Act. To the extent state law is applicable, the laws of the state governing your account relationship apply.
10. Severability, Survival. These arbitration provisions shall survive (i) termination or changes to the c2it Terms and Conditions, your c2it Account or any related services we provide; (ii) the bankruptcy of any party; and (iii) the transfer or assignment of your c2it Account. If one or more of these arbitration provisions are deemed invalid or unenforceable, the remaining portions shall nevertheless remain valid and enforceable.
. The arbitrator shall decide the dispute in accordance with applicable substantive law consistent with the Federal Arbitration Act. The arbitrator shall be empowered to award any damages or other relief provided for under applicable law and will not have the power to award relief to, or against, any person who is not a party to the arbitration. The decision rendered by the arbitrator shall be in writing; however, the arbitrator need not provide a statement of his reasons unless one is requested by you or us. The award of the arbitrator shall be final and binding, subject to judicial intervention or review only to the extent allowed under the Federal Arbitration Act. The award of the arbitrator can be entered as a judgment in any court having jurisdiction.