The Supreme Court upheld this legal tactic, in large part because companies have successfully argued that they would ensure that arbitration was fair to consumers, including agreeing to pay much of the fees associated with the process. But the result was that very few people ever used the arbitration system.
Daily business briefing
In the Amazon Alexa cases, attorneys representing the customers have used this consumer-friendly feature of the arbitration system to their advantage. With massive claims filing, the strategy left Amazon with a huge legal bill before all cases were resolved. Just hiring the arbitrator and initiating the process for a single lawsuit cost Amazon approximately $ 2,900.
“For most companies, arbitration has always been part of an effort to evade liability, not just to avoid class actions,” said Travis Lenkner, attorney at Keller Lenkner, which represents consumers in Alexa-related lawsuits. “This is the first company to break up. Others can do this well. “
Keller Lenkner has used a similar approach in the challenge of how DoorDash, the food delivery company, classified and compensated its workers. When the company filed thousands of arbitration suits on behalf of DoorDash employees, the company unsuccessfully argued in court that it shouldn’t pay many of the initial fees on the cases. DoorDash was scolded by a federal judge for, he said, trying to circumvent the arbitration proceedings.
Customers claim that Amazon’s devices, including the Echoes, broke rules in states that require people to give their consent to be recorded.
“When we looked into the issue, we believed most people didn’t know smart speakers were recording them,” said Warren Postman, senior attorney at Keller Lenkner, on the Alexa-related lawsuits and other arbitrations.