The word about Patreon’s legal dilemma is rapidly spreading, as an activist site, Reclaim the Net, has picked up the story about Owen and the Bears fighting back against Big Tech censorship and deplatformings:
Tentative ruling against Patreon could provide a legal workaround for Big Tech censorship. If the final ruling goes against Patreon, it could have to pay millions of dollars in arbitration fees and leave other companies such as PayPal open to a similar fate.
A California Court has issued a tentative ruling against fan-funding platform Patreon and denied its request for an injunction against 72 claimants who are seeking arbitration against the company.
If the final ruling goes against Patreon, which it looks like it might, lawyer, commentator, and producer Mike Cernovich believes that it would serve as “a HUGE workaround for Big Tech censorship” where the former backers of large creators who are banned from Patreon or other similar sites such as payments service PayPal could file similar motions and force these companies to pay huge arbitration fees that could total millions of dollars.
At this point, I see no serious probability that the final ruling will not go against Patreon. And the bizarre behavior of Patreon`s lawyers in response to the recent demands for arbitration by various independent parties has made it very clear that they, at least, recognize the significance of the full text of the tentative ruling, to which most of the public has not yet been made privy.
Not only that, but there is a very good chance that at least some of the arbitrations addressed by the lawsuit will be declared to be in default by the arbitrators before the next court hearing, which would be significant in light of the signaling by the judge about his reluctance to interfere with either the arbitrators or the arbitration process.
This reluctance should not be a surprise to anyone, given the deference that state and federal courts have given to arbitration. For example, here is one precedent from the 5th Circuit Court of Appeals which the judge could cite in his final ruling, if he were so inclined. The key words here are “he bargains for the process”. And in the case of Patreon, it not only bargained for the process, but drafted and imposed it.
The parties bargained for arbitration. When one bargains for arbitration, he bargains for the process as well as the results. If Ocean had wanted to have the rigors of a federal court proceeding, it could have had them. Instead, it compelled arbitration and now, dissatisfied with the result, seeks a different outcome.
Kergosien v. Ocean Energy, Inc., 390 F.3d 346 (5th Cir. 2004)
A number of people have noted Ebay`s recent changes to its Terms of Use and assumed they were made in response to Patreon`s situation. That may or may not be so, but regardless, the tweaks Ebay has applied to its dispute process don`t really address its intrinsic vulnerability to mass consumer action.