Published by LawTechie - April 13, 2012 - LawTechie

Internet LawAccording to the MediaPost, an Illinois federal judge has ruled that the bulk of privacy causes of action against Wide Open West will go to arbitration because the site’s terms of use featured an arbitration clause. Valentine v. WideOpen West (N.D. Ill., No. 1:09-cv-07653).

U.S. District Court Judge Edmond Chang in the Northern District of Illinois late last month agreed with the ISP, noting that the U.S. Supreme Court ruled recently that such arbitration clauses are enforceable. Chang didn’t send the wiretap law claim to arbitration; instead, he put that claim on hold pending resolution of the other allegations.

Most consumers prefer proceeding in federal court, where juries can award large amounts of damages, rather than in arbitration.

The Supreme Court decision cited here was of course AT&T Mobility LLC v. Concepcion et ux., No. 09-893, 563 U.S. ___ (2011):

Arbitration is a matter of contract, and the FAA requires courts to honor parties’ expectations.

[T]he FAA’s preemptive effect might extend even to grounds traditionally thought to exist “at law or in equity for the revocation of any contract…” [A] court may not “rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable…

As I mentioned when I wrote about this case exactly one year ago:

It should also be noted that AT&T’s arbitration clause was EXTREMELY consumer friendly: It provided that AT&T could never recover attorneys’ fees from the consumer, even if AT&T won the arbitration. It also provided a minimum of $7500 recovery to the consumer if they ended up winning more than AT&T’s final settlement offer. Finally, it provided that the consumer could recover twice its attorneys’ fees if it won the arbitration.

In other words, those terms of use arbitration clauses should ideally be very consumer friendly if they are to be enforced. (I do not know how friendly Wide Open West’s clause was, but will update as soon as I find out.)

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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