ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, March 5, 2024

What Batch Arbitration Looks Like

DavisBen Davis of University of Toledo (right) has called to our attention the language relating to arbitration in Roku's new terms of service.

It is unbelievably long and complicated.  We note, first, the ludicrously specific instructions for opting out (Section 1(L)): 

L. 30-Day Right to Opt Out. You have the right to opt out of arbitration by sending written notice of your decision to opt out to the following address by mail: General Counsel, Roku Inc., 1701 Junction Court, Suite 100, San Jose, CA 95112 within 30 days of you first becoming subject to these Dispute Resolution Terms. Such notice must include the name of each person opting out and contact information for each such person, the specific product models, software, or services used that are at issue, the email address that you used to set up your Roku account (if you have one), and, if applicable, a copy of your purchase receipt. For clarity, opt-out notices submitted via any method other than mail (including email) will not be effective. If you send timely written notice containing the required information in accordance with this Section 1(L), then neither party will be required to arbitrate the Claims between them.

Why mail, Roku?  Why not carrier pigeon?  What happens if Roku updates its terms?  Does the user have to keep on top of changes in terms of service and opt out anew with each iteration of the arbitration provision?  And what if you update your service or the software itself updates.  Does that require a separate trip to the post office?

More striking is the language on batch arbitration, a topic we discussed previously here, and which Roku calls "mass arbitration." 

K. Mass Arbitrations. If 25 or more Claimant Notices are received by a party within 180 days of the first Claimant Notice that the party received, and all such Claimant Notices raise similar Claims and have the same or coordinated counsel, then these Claims will be considered “Mass Arbitrations.” You or Roku may advise the other if you or Roku believe that the Claims at issue are Mass Arbitrations, and disputes over whether a Claim meets the definition of “Mass Arbitrations” will be decided by the arbitration provider as an administrative matter. To the extent either party is asserting the same Claim as other persons and are represented by common or coordinated counsel, that party waives any objection that the joinder of all such persons is impracticable.

Mass Arbitrations may only be filed in arbitration as permitted by the process set forth below. Applicable statutes of limitations will be tolled for Claims asserted in a Mass Arbitration from the time a compliant Claimant Notice has been received by a party until these Dispute Resolution Terms permit such Mass Arbitration to be filed in arbitration or court.

Initial BellwetherThe bellwether process set forth in this section will not proceed until counsel representing the Mass Arbitrations has advised the other party in writing that all or substantially all the Claimant Notices for the Mass Arbitrations have been submitted.

After that point, counsel for the parties will select 20 Mass Arbitrations to proceed in arbitration as a bellwether to allow each side to test the merits of its arguments. Each side will select 10 claimants who have provided compliant Claimant Notices for this purpose, and only those chosen cases may be filed with the arbitration provider. You and Roku acknowledge that resolution of some Mass Arbitrations will be delayed by this bellwether process. Any remaining Mass Arbitrations shall not be filed or deemed filed in arbitration, nor shall any arbitration fees be assessed in connection with those Claims, unless and until they are selected to be filed in individual arbitration proceedings as set out in this Section 1(K).

A single arbitrator will preside over each Mass Arbitration chosen for a bellwether proceeding, and only one Mass Arbitration may be assigned to each arbitrator as part of a bellwether process unless the parties agree otherwise.

Mediation: Once the arbitrations that are part of the bellwether process have concluded (or sooner if the claimants and the other party agree), counsel for the parties must engage in a single mediation of all remaining Mass Arbitrations, with the mediator’s fee paid by Roku. Counsel for the claimants and the other party must agree on a mediator within 30 days after the conclusion of the last bellwether arbitration. If counsel for the claimants and the other party cannot agree on a mediator within 30 days, the arbitration provider will appoint a mediator as an administrative matter. All parties will cooperate for the purpose of ensuring that the mediation is scheduled as quickly as practicable after the mediator is appointed.

Remaining Claims: If the mediation does not yield a resolution of all remaining Mass Arbitrations, the requirement to arbitrate in these Dispute Resolution Terms will no longer apply to Mass Arbitrations for which a compliant Claimant Notice was received by the other party but that were not resolved in the bellwether proceedings. Such Mass Arbitrations released from the requirement to arbitrate must be resolved by bench trial in court in accordance with Section 4.

If Mass Arbitrations released from the requirement to arbitrate are brought in court, they are subject to a waiver to jury trial by both parties. Claimants may seek class treatment, but to the fullest extent allowed by applicable law, the class sought may comprise only the claimants in Mass Arbitrations for which a compliant Claimant Notice was received by the other party. Any party may contest class certification at any stage of the litigation and on any available basis.

Courts will have authority to enforce the bellwether and mediation processes defined in this section and may enjoin the filing of lawsuits or arbitration demands not made in compliance with these processes.

Welcome to the future, Roku Users.  Enjoy your viewing.

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I don’t understand how the average person can do anything about any of this. We just need to find alternatives? How is it legal that people put up an agreement that is so wordy and confusing to just simply say that you agree to not be able to do anything about whatever we decide? I guess just look for alternatives to Roku? They were being bullied and strong, armed by Google two years ago, and now they’re turning around and doing it to their consumers.

Posted by: Heather Hill | Mar 6, 2024 4:06:12 PM