Monday, June 4, 2018
From Alison Frankel, Fitbit lawyers reveal ‘ugly truth’ about arbitration, judge threatens contempt (Reuters):
At a hearing Thursday in San Francisco federal court, a lawyer for the fitness tracking company Fitbit told U.S. District Judge James Donato that no rational customer would arbitrate a $162 claim against the company. The filing fee for a proceeding before the American Arbitration Association, said William Stern of Morrison & Foerster, is $750 - and that’s just to get the case started. It simply doesn’t make sense, Stern said no fewer than six times at Thursday’s hearing, to arbitrate a $162 claim.
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Thursday’s hearing was supposed to be about the opt-outs’ class action, but Judge Donato quickly homed in on the arbitration controversy. He said Fitbit’s handling of the McLellan arbitration “appears to be an absolutely unacceptable level of gamesmanship” and ordered briefing from both sides on whether Fitbit had engaged in “a form of civil contempt.”
The judge said he had sent the case to arbitration because Fitbit said that’s where it belonged. It is “profoundly troubling,” Judge Donato said, that Fitbit unilaterally decided McLellan’s claim could not be arbitrated because, as he described the company’s position, “We think it’s a cheap case, and we offered her plenty money to get rid of it, and she said no, and she’s crazy as a result of that, so our hands are now tied.’”
(H/T: Bob Klonoff)