by Jeff Sovern
So Allison Frankel reports for Reuters in a story headlined Fitbit lawyers reveal ‘ugly truth’ about arbitration, judge threatens contempt. Here are the first three paragraphs:
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.
Fitbit’s terms of service require customers to arbitrate their claims.
Quite simply, this is a Catch-22 for Fitbit customers. Fitbit imposes mandatory arbitration because it doesn’t want people who buy its fitness trackers to band together in a class action that would make their small claims economically viable. But Fitbit knows consumers, for the most part, won’t throw good money after bad to arbitrate their relatively small claims – and the company doesn’t want to lay out its money for small-dollar arbitration either.
(HT: Gregory Gauthier)