Wayfair Customer Forced Arbitration: A Clause for Concern

WFMY News2 | by Matthew McNamara | February 13, 2020
Forced_Arbitration
Mandatory arbitration deprives consumers of important options if a product is faulty or harmful. Here’s how to fight back.

In July 2018, Ronald Gorny woke up in his Chicago home and noticed a few small insects scurrying on his new upholstered headboard.

Gorny pulled back the sheets to find dozens of more bugs, all seemingly engorged with blood, according to a class-action lawsuit his lawyers filed against Wayfair, the online housewares company that sold him the headboard. A photo he snapped shows his finger stretching the headboard’s fabric to reveal a shiny, dark creature about the size of a pencil tip and what appears to be stains on the surrounding fabric.

Gorny was not the first Wayfair customer to say bedding products had arrived infested with bed bugs. His lawyers, pointing to comments on the website Pissed Consumer, claim a “myriad” of other customers had also complained to the company. One Brooklyn, N.Y., woman even received an apologetic email from Wayfair CEO Niraj Shah in September 2016, almost two years before Gorny’s purchase.

Did Wayfair, as Gorny’s lawyers argue, knowingly sell products infested with bed bugs? Did it investigate the complaints or try to correct the problem? Gorny’s class-action lawsuit might have shed light on those questions—but the answers may never be known: At Wayfair’s request, a judge halted the suit in June 2019 and sent Gorny’s complaint to a closed-door, virtually unappealable proceeding known as arbitration.

Gorny, it turns out, had unknowingly signed on to this process by simply using wayfair.com, each page of which contains a link to its terms of use. There, about two-thirds of the way through 4,600 words of legalese, is what the judge called the relevant provision: “Any dispute between you and Wayfair . . . will be settled by binding arbitration.”

Citing pending legal matters, both a Wayfair spokesperson and a lawyer for Gorny declined to comment.

Whether you realize it or not, chances are you, too, have agreed to arbitration on dozens of occasions, forfeiting your right to take problems—even serious ones—with a product or service to court. Arbitration clauses like the one binding Gorny have spread rapidly through the consumer landscape in recent decades, first in the financial and telecom industries and more recently—as new Consumer Reports research shows—into the realm of consumer products.

More pernicious: Because arbitration proceedings are private, and because arbitration clauses almost always forbid plaintiffs from joining together, companies can use arbitration to preemptively crush consumer challenges to their practices, no matter how predatory, discriminatory, unsafe—and even illegal—they may be.

Triggering the Avalanche

Mandatory arbitration was established on a national level in 1925 by the Federal Arbitration Act, largely as an efficient way for businesses to resolve conflicts with other businesses. Since the 1980s, however, courts have greatly expanded the ability of businesses to force arbitration in consumer and employment disputes, and a string of Supreme Court cases over the past decade have busted wide the arbitration floodgates. In the landmark 2011 decision AT&T Mobility v. Concepcion (PDF), for example, the court knocked down a California law that had tried to prevent arbitration clauses from restricting class-action lawsuits.

With that series of green lights, corporate attorneys started slipping the arbitration language into more consumer transactions, from buying an Amtrak ticket to sending a package by UPS. A 2019 study in the UC Davis Law Review Online (PDF) found that 81 of the 100 largest U.S. companies now use arbitration in their dealings with consumers.

Though arbitration clauses are common in financial and telecom services, they now also increasingly go into force when you simply buy a consumer product such as a dishwasher or TV. To get a sense of how often, CR looked at the top-selling brands in the 10 product categories receiving the most traffic on our website, plus two types of products designed for safety: bike helmets and child car seats.

The results were striking. Of the 117 brand/category combinations we examined, 71—more than half—incorporate arbitration clauses. When looking at only the most popular product categories, just over two-thirds had arbitration clauses.

Studies have shown that most consumers have no idea what they’ve agreed to arbitration. And the incursion of arbitration into the realm of products, in particular, may be under the radar. Though financial services customers expect to sign user agreements, “you don’t think of a washing machine as coming with a contract,” says Lauren Saunders, associate director of the National Consumer Law Center, a nonprofit group.

To be clear, you don’t have to sign anything—or even click “I agree” on a website—to be bound by arbitration. The clause can appear on product packaging or be buried deep in the warranties, user manuals, or—as with Gorny’s headboard—a website’s terms of use. Placing the clauses there, says Myriam Gilles, a law professor at the Benjamin N. Cardozo School of Law at Yeshiva University in New York City, is “intended to obscure the immensity of the rights being forfeited.”

Multiple courts have now ruled that even contracts one party did not see or have any choice but to sign are enforceable—decisions even some conservatives see as going too far. “The law has so evolved . . . that the sky’s the limit in how many arbitration clauses corporations are going to be able to ensnare consumers in,” says Brian Fitzpatrick, a law professor at Vanderbilt University in Nashville, Tenn., who is also a former clerk to Justice Antonin Scalia, author of the Concepcion decision.

Missing Safeguards

Companies tend to justify mandatory arbitration by claiming that it actually benefits consumers. “Arbitration is a fairer, faster, and cheaper way . . . to resolve disputes without ever having to set foot in a courtroom,” says Harold Kim, the president of the U.S. Chamber Institute for Legal Reform, a nonprofit organization.

The relatively informal proceedings of arbitration can indeed be faster and cheaper than going to court—but fairness is another matter.

Many of the safeguards built into the court system—the right to conduct “discovery” to establish basic facts, for example—are missing from arbitration. (It’s unlikely that in arbitration Gorny’s lawyers could demand all of Wayfair’s records of bed bug-related consumer complaints, as they could in a lawsuit.)

In addition, arbitrators aren’t obligated to follow legal precedent, and your right to appeal their decisions is extremely limited. Moreover, companies that arbitrate frequently are good at choosing arbitrators who tend to agree with their position, research shows. Plus, says CR senior policy counsel George Slover, “arbitrators have a built-in incentive to heed the interest of the company in hopes of repeat business.”

But the debate over the fairness of arbitration goes even deeper. For one thing, because arbitration is conducted in private and its outcome is typically kept under wraps, the underlying problem may be kept hidden.

That was the case with financial giant Wells Fargo, which between 2009 and 2016 notoriously opened some 3.5 million bogus bank and credit card accounts in the names of real customers. Beginning in 2013, customers tried to sue Wells Fargo, but because of arbitration clauses buried in the bank’s fine print, they were forced into confidential settlements. As a result, the bank’s practices remained hidden until press reports surfaced, leading to a government investigation and, ultimately, a huge financial settlement for harmed consumers.

A related problem has to do with how arbitration often prevents plaintiffs from jointly litigating grievances, a development that could lead to the end of class-action lawsuits. “It is not an overstatement to say that if the Concepcion decision is not overruled by the Supreme Court or overturned by Congress, then class-action lawsuits could be all but dead in a decade or less,” wrote Vanderbilt professor Fitzpatrick in his book “The Conservative Case for Class Actions” (University of Chicago Press, 2019).

That plan seems to be paying off. An estimated 825 million consumer arbitration agreements were in force in 2018. Yet only about 7,000 arbitration cases are actually heard each year, according to a 2019 study by researchers at the University of California, Davis, School of Law (PDF).

The Case of Moldy Washers

Why do individual cases matter if they are often small? Because one function of civil lawsuits is deterrence—the idea that the risk of a sizable judgment from many small lawsuits combined into one prevents companies from doing questionable things to increase profits and pushes them to quickly fix problems when they arise. “The lion’s share of academic studies has found that . . . class-action lawsuits deter misconduct,” says Vanderbilt professor Fitzpatrick. “Deterrence is reason enough to keep class actions.”

Take the case of front-loading washing machines. They became popular in the mid-1990s because of their impressive performance and energy efficiency. But owners soon began complaining of mold buildup, foul smells, and ruined laundry. It turned out that the rubber gaskets around the doors trapped moisture, among other problems. Class actions involving millions of washers followed, and by 2017 Bosch, Electrolux, LG, and others settled. Whirlpool, for example, agreed to give owners at least $50 or a 20 percent rebate on a new machine, and up to $500 for repair or replacement.

Arguably even more important were changes to the marketplace motivated by the class actions. Though the problem hasn’t been eradicated, several problematic washers have been taken off the market or redesigned to be less susceptible to mold. Many now come with self-cleaning cycles.

But here’s the catch: Those companies now impose arbitration provisions. The clause added by Whirlpool, for example, says it “applies to any and all claims, disputes, or controversies of any nature whatsoever that You may raise against Whirlpool and/or its Affiliated Entities.”

So what would happen if the mold problem emerged today? For one thing, it would be hard to find a lawyer. Jonathan Selbin, lead counsel in the LG and Whirlpool suits, says it’s “highly unlikely” he would sign on to cases with such a broadly written clause in place. In fact, before taking new cases he now always asks whether an arbitration clause is in effect. “It’s become a threshold inquiry right up there with whether the problem is real,” he says. And without a lawyer consumers rarely prevail: Just 6 percent of people who represent themselves in arbitration win, research shows.

How to Protect Yourself

Arbitration, in some cases, can be a good option for consumers, provided they understand the trade-offs and can deliberately choose arbitration over the court system after a dispute arises, says CR’s Slover. What advocates object to is requiring consumers to agree to arbitra­tion before buying a product or service, and long before a dispute has arisen.

The federal Forced Arbitration Injustice Repeal (FAIR) Act, passed by the House in September 2019 and now in the Senate, would ban predispute forced arbitration, including provisions that prevent people from joining class actions. In the meantime, is there anything you can do? It’s not always easy, but here are some steps to try:

Check to see whether companies use arbitration. Though this information is often buried, CR has done the hard work for you for some popular products. In other cases, look for arbitration language on your own. The clauses often lurk in links at the bottom of a company’s website under headings such as “terms of use” or “legal terms and conditions.” Search for “arbitration” and “dispute” using the “find” function. Also check the user agreements that most of us agree to when we purchase a product online or otherwise interact with a company’s digital offerings.

Don’t let down your guard when shopping offline, either. Companies put arbitration clauses in owner’s manuals and warranty materials, and on the product packaging itself.

Try to choose products from companies that don’t use arbitration. If you’re choosing between two products similar in quality and price, use arbitration as a tiebreaker. For example, Evenflo and Graco both offer top-rated convertible child car seats for about $100­—but Graco’s come with a mandatory arbitration clause. (The company did not respond when asked why it has that provision while most other car-seat makers that we looked at don’t.)

Opt-out when you can. Some companies allow consumers to opt-out of arbitration, such as the mattress maker Simmons Beautyrest. But act fast and read the instructions carefully. Companies often require you to take the step within 30 days of purchase and to use specific language.

Complain. Use social media to contact the CEO, customer service, and other consumers. In a handful of cases, doing so prompted companies to reverse course on arbitration. For example, in 2014 food giant General Mills dropped arbitration requirements that the company said applied even to people who simply downloaded coupons, after a wave of consumer outrage and media coverage. “We’ve listened,” the company wrote in a blog post in April of that year. “And we’re changing our legal terms back.”

Negotiate using the legal leverage you have. If you have a dispute and find you’re bound by an arbitration clause, know that many companies try to settle disputes informally before beginning arbitration or defending small claims cases in court. In fact, some companies may make an offer before you begin legal action.

Bed bug infestations are only getting worse — here’s why they’re so hard to kill

  • Bed bugs can stow away on your clothes, bags, and mattresses, infest your home, and lay thousands of eggs in the process.
  • They feed on human blood and swell to twice their body weight.
  • Despite our best efforts, bed bugs are hard to kill and infestations are only getting worse.
  • Part of the problem is that bed bugs are developing resistance to pesticides, and experts worry we’re running out of options.

The children were right. A gruesome creature lurks under your bed. And yes, it wants to suck your blood…swelling to twice its size in the process.

Its name? Cimex lectularius — aka the common bed bug.

Turns out these creatures have tormented humans for thousands of years. Ancient Egyptians, for example, used spells to try and fight the insect hordes. But to no avail. And while our weapons have come a long way since spell casting … we’re struggling more than ever to fend off these pesky pests.

In the 20th century, humans developed a new weapon against the bed bug. Toxic chemicals. Pesticides like DDT nearly wiped out entire populations in most Western countries. But even that wasn’t enough. By the turn of the millennium, bed bug populations resurged worldwide. And this time, they had new weapons against us. Like 15% thicker skin — to better protect against harmful pesticides. And enzymes called esterases and oxidizes. Which break down common insecticides, making them useless. In fact, researchers worry we’re running out of effective insecticides!

If that’s not terrifying enough, consider this: Just a few bed bugs can quickly turn into a dangerous infestation. Let’s say a single female spots you in the local movie theater … and hitches a ride home on your clothes. Here’s the problem: She’s pregnant. And will lay hundreds of eggs. Within just a few months, that lonesome bed bug can turn into thousands.

But most victims won’t even notice until it’s too late. Since their flat, plate-like bodies let bed bugs vanish into impossibly tight nooks and crannies. So it’s no wonder infestations are out of control! From 2004 to 2009, the New York City council reported a 2,000% increase in bedbug complaints! And although they don’t transmit disease, bed bug bites are bad news.

In one case, a 60-year-old man needed to be hospitalized for blood loss. Bed bugs can also trigger itchy rashes, which can cause skin infections at best … and deadly allergic reactions at worse. The good news is you CAN rid your home of these pests. Experts recommend hiring professional exterminators to heat your home to extreme temperatures.

The bad news? You’ll have to shell out $800 to $1,200 a pop to clear your apartment.

So until we discover a safe but cheaper way to take out every last one…it won’t be so easy to sleep tight and not let the bed bugs bite.

by Gina Echevarria and Shira Polan  Dec. 28, 2018

BedBugs reported in some of NYC’s swankiest hotels. They were always there; and it’s getting worse. More important to follow as BedBugs transmit deadly Chagas disease.

February 8, 2016 | by Leonard Greene | New York Daily News
It’s not just the fleabags and flophouses.

Bedbugs have been reported in some of the city’s swankiest hotels with a list that includes the Waldorf Astoria the Millennium Hilton and the New York Marriott Marquis.

According to the Bedbug Registry, a nationwide database of bedbug reports and complaints, bedbug sightings in New York hotels have jumped more than 44 percent between 2014 and 2015.

The Millenium Hilton at 55 Church Street in New York New York.
Google Maps Street View

The Millenium Hilton at 55 Church Street in New York New York.

The data focused on establishments that are members of the Hotel Association of New York City.

Of the 272 association members, 65 percent, or 176 members, have had a guest file at least one complaint about bedbugs at the property.

NR

Michelle Bennett/Getty Images/Lonely Planet Image

Taxi cabs outside Waldorf Astoria Hotel.

Eighteen hotels had a combined 363 complaints, representing 42 percent of all bedbug complaints.

“I stayed in room 2306 for one night,” a Millennium Hilton guest wrote in a complaint to the hotel in 2014. “I found blood on my sheets and a live bug on my bed. I ended up with 60 plus bites.”

At the Times Square Doubletree guest said a stay there last year left hundreds of bite marks on the face, neck arms and hands.

“Extreme case of bed bug attacked on my entire upper body,” the guest wrote.” Went home to Florida a day early and ended up in my local emergency room.”

Research Entomologist Jeffrey White shows off some bedbugs at a informational bedbug conference at 201 Mulberry Street in Manhattan Wednesday.

Warga, Craig/New York Daily News

Last month, a California couple posted a YouTube video about their $400-a-night Central Park hotel room nightmare. The couple found dozens of bedbugs beneath their mattress at the Astor on the Park Hotel.

Lisa Linden, a spokeswoman for the hotel association, said hotels in New York are addressing the issue.

“Bedbugs are a global issue that extend beyond hotels,” Linden said.

”Every member of the Hotel Association of NYC that we are aware of has an active anti-bedbug program in place. If a problem arises, it is dealt with immediately and effectively.”

Scientists who recently studied the bloodsucking creatures in the city’s subway system discovered a genetic diversity among bedbugs depending upon the neighborhood where they were found.

They said the discovery could lead to better insecticides.

#SayNOtoPESTICIDES!

Watch this BedBug go from flat to FAT

FYI – A 2014 Penn State Study confirms that Chagas CAN be transmitted by bed bugs and that bed bugs carry 40 other pathogens and MRSA.  ~A. Steiner~

February 8, 2016 | Christopher Terrell Nield | The Conversation
The bedbug problem is getting worse. Infestation horror stories have popped up in most major cities and a pest control team was even asked recently to exterminate bedbugs on an offshore oil rig.

We tend to associate bedbugs with dirty living conditions, but this is a myth – they don’t actually choose dirty homes over clean ones.  Unusually for many blood-sucking insects, bed bugs haven’t (yet) been implicated in spreading disease to the humans they bite, so that’s one small thing in their favour, though they are suspected of carrying organisms that cause leprosy, oriental sore and the bacterial brucellosis, and may be able to transmit Chagas disease.

After feasting on human blood the same bedbug goes from flat (00:25) to fat (3:25).

#SayNOtoPESTICIDES

Announcement: Bedbug Genome Assembled

Bed_Bugs_CommentarayScientists have assembled the first complete genome of bedbugs, which existed in some form even before humans were around to invent beds.

February 2, 2016 | by Elizabeth Kolbert | The New Yorker

In the great contest that is life, the common bedbug, Cimex lectularius, qualifies as a winner. This is true not just in the Donald Trumpian sense of being extremely difficult to get rid of but in the long-term evolutionary sense of surviving multiple geological epochs. A creature that looked very much like a bedbug was scuttling around during the time of the dinosaurs; a sort of proto-bedbug has been found in amber that’s almost a hundred million years old. It’s not clear what that bug fed on, but it’s believed that long before modern humans—and therefore beds—existed, Cimex lectularius sucked on bats’ blood. When humans took to living in caves, bedbugs descended from the bats and began feeding on people. (There are still bedbugs that prefer bats, and scientists have proposed that the lineage that prefers humans is in the process of becoming a separate species.)

Today, researchers from the American Museum of Natural History and Weill Cornell Medicine announced that they had assembled the complete genome of Cimex lectularius. The same team is working on the cockroach genome; both projects are part of an effort to better understand so-called “living fossils.” A paper on the bedbug genome is appearing today in the journal Nature Communications.

“Bedbugs are one of New York City’s most iconic living fossils,” George Amato, one of the paper’s authors and the director of the museum’s Sackler Institute for Comparative Genomics, noted. The bedbug genome turns out to consist of almost seven hundred million base pairs. This is significantly larger than the fruit-fly genome (a hundred and twenty million base pairs), but not nearly as large as the locust genome (six billion base pairs). In addition to sequencing the bedbug’s genome, the researchers also looked at gene expression over the bug’s life cycle, which spans five instar stages. From this, they concluded that the “first blood meal of the bedbug is the most dynamic period of the bedbug’s transcriptional activity.”

Bedbugs are so-called true bugs. Members of this group also include cicadas, aphids, and leafhoppers, and all share a common arrangement of mouthparts. As anyone who has suffered an infestation knows, bedbugs use their mouthparts, or proboscises, to seek out blood vessels. Then they inject anticoagulants into their victims, to prevent themselves from, in effect, choking. The researchers found that bedbugs possess several classes of genes that code for anticoagulant proteins, including for proteins usually associated with snake venom. This doesn’t mean that bedbugs are any more closely related to snakes than other insects, just that they’ve come up with some of the same strategies.

“What we’re really finding is a structural motif—something about the sequence of amino acids that is probably involved in preventing blood from clotting in the same way a snake venom protein is, but doesn’t share an evolutionary history,” Mark Siddall, another author of the paper and a curator at the Museum of Natural History, explained.

The ancient Greeks were already complaining about bedbugs in the fifth century B.C.; references to bedbugs appear in Aristophanes and then in Aristotle. The bugs seem to have travelled with humans along ancient trade routes; by the seventh century A.D., they were in China, and by the eleventh century in Germany. From Europe, bedbugs migrated to North America and Australia with the colonists.

Bedbugs suffered a population crash in the mid-twentieth century, with the introduction of pesticides like D.D.T. But they have since evolved resistance to many of the chemicals used against them, and their numbers have roared—or, if you prefer, snuck—back up. A recent study by researchers at Virginia Tech and New Mexico State University found that bedbugs have already evolved resistance to neonicotinoids, a class of pesticides that has been in use for only twenty years or so. (The study shows that it takes something like five hundred times the amount of neonicotinoids to kill bedbugs from populations that have been exposed to the chemicals as it takes to kill bugs from populations that have never been exposed.) The researchers who put together the bedbug genome identified several genes that may be involved in pesticide resistance; this information could potentially be used to create more effective bug killers.

“It turns a light on for people to begin in a logical way to explore these areas that we’ve identified,” Amato said.

By combining the information from the genome with information from DNA swabs taken from New York City subway stations, the researchers were also able to map relationships among the city’s bedbug populations. This effort suggests that even bedbugs have a hard time getting across Manhattan.

“We found more north-south connectivity for the bedbugs than we found east-west,” Siddall observed. “And that’s reflecting what we already know to be true.”

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