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“In its most recent update to its “User Agreement,” Capital Bikeshare has slipped in a forced arbitration clause and class action ban that significantly affects the rights of Bikeshare members.”

by Prince Of Petworth January 6, 2017 at 1:45 pm 20 Comments

bikeshare-crash
Photo by PoPville flickr user James Warner

“Dear PoPville,

Thought this was interesting. Folks should protect their rights.”

From Public Justice’s Opt Out of Capital Bikeshare’s Forced Arbitration Clause by Dani Zylberberg:

“In its most recent update to its “User Agreement,” Capital Bikeshare—the hugely popular bike program in the Washington, D.C. area—has slipped in a forced arbitration clause and class action ban that significantly affects the rights of Bikeshare members. In fact, this new “User Agreement” only benefits Capital Bikeshare, not its members. But if you are a Capital Bikeshare member there is something you can do about it: Opt Out!

Capital Bikeshare’s new “User Agreement” forces users to give up their right to go to court, and instead sends dispute that would typically be heard by a court into arbitration, which almost always favors corporations over consumers. That’s because arbitrators—who are often hired again and again by corporations to hear these disputes—unsurprisingly tend to rule in favor of the company that is bringing the arbitrator repeat business.

But you can do something about it: Opt out! And do it quickly.

Capital Bikeshare’s User Agreement allows its members to avoid this arbitration clause by following these simple steps within thirty days of your first use of its service:

From the email account you used to register with Capital Bikeshare, address an email to legal@motivateco.com;
In the subject line write “CAPITAL BIKESHARE ARBITRATION AND CLASS ACTION WAIVER OPT-OUT”
In the body of your email write, “I opt out of Arbitration and the Class Action Waiver” and optionally include your member id if you have it handy.
Send the email.

Although this also waives your right to force arbitration upon Capital Bikeshare in the event of any dispute, it doesn’t prevent you and Capital Bikeshare from mutually agreeing to use arbitration if that is what you both desire at the time. If arbitration will really be to both your benefits—as corporations often argue—then it will be a no-brainer for Capital Bikeshare to arbitrate whatever claims it or you may have.”

  • Anony

    Did it and got an email kickback that address is invalid. So much for that

    • mdrndgtl
    • It is just a copy and paste problem

      If you go to the actual article the address is right, when it got copied over to the blog the “to” got connected to the email address. I sent an email to: legal@motivateco.com

      It worked just fine

    • Barijho

      it probably should be legal@motivateco.com rather than tolegal. Maybe not?

    • SimonBolivar
    • Dani Zylberberg

      Hey there. Try sending it to:

      legal@motivateco.com

      I think when the article was copied that a space was deleted between “to” and “legal@motivateco.com.”

      Hope that helps, and thank you, PoPville, for linking to the article.

  • B’Dale Res

    I would love to see proof about the Arbitration Claims. As someone that works in Arbitration, this is news to me….

    • ymous

      Are you asking for proof about the claims that arbitration clauses such as this benefit only the company and not the consumer? If so, here is the basic argument: Arbitration has the following disadvantages for consumers: (1) it is expensive–the parties pay all of the costs of the arbitration (including the arbitrator’s fees) out of pocket, where as court costs are heavily subsidized by taxes; (2) it is confidential–there is no way for consumers to discover if other consumers have brought or prevailed on similar claims and to use those prior claims as precedent; (3) discovery of documents and information, the ability to subpoena witnesses to testify, and the ability to introduce evidence are all much more limited in arbitration than in court. When the arbitration clause also waives any right to participate in a class action, as this one does, you have the following additional disadvantages to consumers: (1) consumers who have all suffered from the same harm cannot band together in a single case to save costs and pool resources; and (2) for small harms, it may not be worth any individual’s costs to go after the company, so the company is never held to account for them.

      Companies often argue that arbitration allows them to keep legal costs down, which allows them to reduce prices. But, the arbitration process is only cheaper for companies in consumer cases because it limits consumer rights. Arbitration was originally conceived and subsequently adopted at the federal level (in the form of the Federal Arbitration Act) as a way for companies to resolve dispute between one another. Because company-to-company contracts are typically negotiated, or at least entered into by savvy repeat players with the ability to negotiate and some semblance of equal bargaining power, it made sense to allow them to adopt arbitration if they so desired. The modern practice of cramming arbitration and class action waivers down on consumers through form contracts (a.k.a. contracts of adhesion) is a whole different ballgame and none of the arguments that originally supported arbitration make sense in this context.

      Unfortunately, it does not appear to be going away any time soon, as the Supreme Court recently endorsed it and said it was up to Congress to change the Federal Arbitration Act if it does not like the way it is being interpreted and implemented. (The relevant case is Italian Colors v. American Express for those who are interested.) The CFPB had banned these clauses in financial consumer contracts, but that ban (and the CFPB generally) is at the top of the list of the incoming administration to dismantle.

      I could go on forever about this, but you get the idea.

      • dcd

        This reads like it is pulled out of the plaintiff’s bar’s Manual – section 5.6 “Why arbitration and class action waivers are bad for us, and therefore are bad for consumers (or so we’ll make them think).” The reality is, as you might expect, much more nuanced.

        • ymous

          Obviously there is more nuance than can be conveyed in a 2-paragraph comment on a blog, but what I have said above is (I believe) correct. If you disagree, I would love to hear why.

    • Dani Zylberberg

      The issue is not with arbitration generally, but forced arbitration and class action bans, where companies do not give customers any choice but to give up their rights to litigate in court or as a class. This leads to corporate abuse and allows companies to keep their malfeasance a secret. A recent example is Wells Fargo, which vigorously enforced its forced arbitration clauses to keep its fraud scandal a secret for years and prevented customers from getting the justice they deserved. This has been well documented in a few article, including this one from the LA Times:

      http://www.latimes.com/business/hiltzik/la-fi-hiltzik-wells-arbitration-20160926-snap-story.html

      The Consumer Financial Protection Bureau also released a study concluding that forced arbitration is categorically bad for consumers:

      http://www.consumerfinance.gov/about-us/newsroom/cfpb-study-finds-that-arbitration-agreements-limit-relief-for-consumers/

      Arbitration may be great in some circumstances, for example when businesses are resolving disputes between each other, but it is not good for consumers. And, like the article points out, if arbitration is better for consumers, and it almost never is, then there is no need to force consumers to agree to it ahead of time, they will naturally want it later.

  • Rachel

    When did this take effect? I’ve been a member for years, so am obviously beyond the “first 30 days of my use of the service.” Does this only apply for people that are new members? (the ability to opt out)

    • Anon Spock

      Should be 30 days from the date enacted or from when you join for new members. They can’t force you to accept it simply because you are an old member.

  • Former DC Resident

    It’ll be funny when all these people who opt out suddenly have inactive key fobs and are indefinitely barred from using the service. I see nothing wrong with a service provider preferring arbitration as it can significantly reduce the amount of money spent on superfluous lawsuits. What are you going to sue them for? We are such a litigious society that it’s sickening.

    • ymous

      Hypothetically speaking, suppose there is some defect in their bikes, and they know about but decide not to fix it or notify their users of it. The defect repeatedly leads to crashes and injuries. You use one of their defective bikes and get injured. I can imagine you might want to hold them accountable in such an instance. Right?

      Not all lawsuits are frivolous. And, even if you think there is too much litigation, there are more efficient and fairer ways to reduce litigation than simply allowing companies to force consumers to surrender their right to sue in exchange for using a company’s product or service.

    • S C

      I strongly recommend listening to this NPR piece on forced arbitration and what a loss class action rights are: http://www.npr.org/2015/11/12/455749456/have-we-lost-a-constitutional-right-in-the-fine-print

      A taste from the 30-minute piece:

      “DAVIES: You write in the series that many of these customer agreements include a clause that requires arbitration and specifically bans people from engaging in class action lawsuits for their grievances. Why is that so important?

      SILVER-GREENBERG: Class action lawsuits, because they enable large groups of people that might be similarly affected to pool their resources, are really the only way that an individual can afford to go up against a deep-pocketed company with vast resources. It allows people to join together to prove their case. And these are cases that require often a lot of expert testimony, a lot of evidence, and so they would otherwise be prohibitively expensive to bring. The lawsuits are also really important when you were dealing with systemic issues, like wage theft, that affects many people in the same way. So we’re not just talking about disputed fees or a checking account problem.”

      There is a lot more on the history and coalition that paid for the campaign to ban class action.

  • MadMax

    I was expecting something much more heinous. This falls more along the lines of “meh”.

  • Anonymous

    Is this actually true?

    The only user agreement I can locate is at https://www.capitalbikeshare.com/user-agreement

    Section 18 (Choice of Law; Dispute Resolution) doesn’t look to me as if you are waiving your litigation rights. The last sentence reads: “If, for any reason, the dispute is not resolved through mediation within the 4-month period, then the parties may continue seeking to resolve the dispute by use of any process, including litigation by trial.”

    If this has changed, is there a link available to an updated user agreement that includes the new terms regarding arbitration?

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