Nick Rekeita, the lawyer who hosts the Lawstream, analyzes yesterday’s hearing:
Okay, here’s the skinny. If Patreon does not pay up within 30 days on all 100 of the claims, if they don’t pay up in 30 days, they’re in default. That means that they lose, basically, and it doesn’t mean that they lose the arbitration action, because they lose this one, but then the backers can compel another one or go to court. In either case, there’s a monetary sanction, there’s also a cost of arbitration plus attorneys fees, or the backer sanctions. If Patreon doesn’t pay up, not only will they then have to go back, and they may have to pay up anyway, well, they will, I mean at some point they’ll have to pay up anyway. They’ll also end up having to pay the attorneys fees for the backers and that gets devastatingly expensive, again, millions and millions of dollars.
This is massive because if this preliminary injunction fails, look to see all of your Terms of Service updated across the board. Big Tech will be watching this, they absolutely will. Anyone who uses adhesion contracts and has arbitration clauses in it is going to be looking at this and the rules are going to change dramatically. But it also shows that we as consumers do have tools in our toolbox to go ahead and combat them, and those tools are often given to us by big tech companies.You just have to find the right situation.
Personally, I think the injunction should be denied. Why we don’t hold these companies to account for their choices is beyond me. Of course Patreon wanted this, they wanted it this way. Now the reason they wanted it this way is because they never for a moment considered that things would go down this way because I think, at their core, Patreon never considered banning creators at the onset.
It looks like it is just going to get even crazier from here. I am informed that Patreon has begun responding to the first independent arbitrations with incoherent rants directed at the JAMS National Arbitration Council. Their argument, such as it was, was explained to me:
“This should not be arbitrated because we know we will lose and we don’t like it and it’s expensive for us.”
At this point, I wouldn’t put it past Patreon to sue both JAMS and the State of California for unfairly holding them accountable to their own contracts of adhesion. The whole thing is beginning to look a lot like a Kids in the Hall sketch.
The Quartering has also put in his two cents on the situation, as has GamerGate legend Sargon of Akkad.
The obvious question the LLOE has to consider now is whether the time has arrived to call Patreon on all their idiotic posturing and bring a massive class action lawsuit against them in the Superior Court. I imagine they would suddenly recall why they mandated arbitration in the first place and do a very fast and astonishingly hypocritical 180.