Important legal news re Patreon
Posted: Sun Aug 02, 2020 10:18 pm
TL;DR Patreon is in deep legal trouble, so I hope @SFDebris has a SubscribeStar, LiberaPay or w/e ready in case it all goes tits up.
= = =
So, I've been closely following this legal situation for a while now, and here's the background for those interested. A while back, Patreon kicked comedian/homesteader Owen Benjamin off their platform, like they did to alt media people like Sargon of Akkad, Lauren Southern, etc. However, unlike those people, Owen Benjamin had smart friends who knew the law. In short, Patreon committed several blunders:
1) Tortious interference: meaning they interfered with the contract Owen had with all his patrons. Per Patreon's ToS (and this much IS legal), they're not a party to the contract, they're just a middle man who moves the money from A to B, minus the % they & their payment processors take. Every single patron of Owen's can claim tortious interference due to this, as can Owen.
2) Breaking its own ToS by filing a class action lawsuit against Owen's patrons, when their ToS bars class actions altogether.
3) Not knowing what their own ToS says, because they claim the right to police you on their platform & in related stuff, but kicked Owen off for other stuff.
4) Deceptive practices, up to and including flat-out illegal provisions in the ToS. Eg, if SFDebris is kicked off under the current ToS, then it's the current the ToS that applies in any legal disputes about that act, not the most recent ToS... but Patreon tried to change the rules ex post facto. Also, for example this bit of their current Dispute Resolution rules is 100% illegal under California law:
"No class arbitrations or other other grouping of parties is allowed. By agreeing to these terms you are waiving your right to trial by jury or to participate in a class action or representative proceeding; we are also waiving these rights."
You cannot waive your right to trial by jury until you're in court and all that fun stuff, for example. In contracts of adhesion (eg like Patreon's contract with you when you sign up) you also have various consumer rights under California law that Patreon's ToS cannot remove.
Anyway, enough about that stuff. Owen got a few score of his patrons to all take Patreon to arbitration: they each paid $250 (well technically, anyone can pay on their behalf too, funding other people's legal actions is 100% fair & legal etc - see how Hulk Hogan's lawsuit vs Gawker was funded by Peter Thiel), and that's the absolute limit of their costs. All other arbitration fees etc are paid for by Patreon - and we're talking four-figure sums per arbitration at a bare minimum. Even if Patreon go to arbitration and concede everything in the first 30 seconds, they STILL have to pay circa $3k per individual filing.
Patreon decided not to settle with Owen for a couple of million, legal stuff happened, and their attempts to use the California courts to stop the arbitrations from proceeding failed miserably. Others are now looking to pile on, including fans of people like Sargon of Akkad & Lauren Southern, so this could very easily bankrupt them. ATM Patreon claims to have 4 million users... every single one of which now has an arbitration claim against them due to their latest ToS (see above) for example. I kind of doubt any of the tech giants are going to swoop in & bail them out. You pay $250, Patreon pays $2,750 or w/e it is, and even if you fail in your claim on day 1, you don't pay anything else... so Patreon bleeds money and goes bust.
= = =
Why am I telling you all the legal stuff? Hey, maybe you want to see Patreon burn, or just want to know about it. But most importantly, I don't want to see Chuck caught off-guard by this and scrambling to cover his expenses if Patreon goes down, so I figure it's best to get the word out now. Even if Patreon survives all this, diversifying income streams is a sensible thing to do anyway, but frankly given the utterly retarded behaviour of Patreon's lawyers to date, I'm expecting them to crash & burn.
= = =
Nick Rekieta, a fairly sharp lawyer on YouTube, has done a couple of videos about this so far, and I imagine there will be more in the weeks to come:
[youtube]https://www.youtube.com/watch?v=4kLFsicmhMM[/youtube]
[youtube]https://www.youtube.com/watch?v=KvWng0jQBcM[/youtube]
Edit: Court docs can be found here:
https://webapps.sftc.org/ci/CaseInfo.dll?CaseNum=CGC20584586&SessionID=119BE06ED56CCC56F661831B7757274A515294E4
= = =
So, I've been closely following this legal situation for a while now, and here's the background for those interested. A while back, Patreon kicked comedian/homesteader Owen Benjamin off their platform, like they did to alt media people like Sargon of Akkad, Lauren Southern, etc. However, unlike those people, Owen Benjamin had smart friends who knew the law. In short, Patreon committed several blunders:
1) Tortious interference: meaning they interfered with the contract Owen had with all his patrons. Per Patreon's ToS (and this much IS legal), they're not a party to the contract, they're just a middle man who moves the money from A to B, minus the % they & their payment processors take. Every single patron of Owen's can claim tortious interference due to this, as can Owen.
2) Breaking its own ToS by filing a class action lawsuit against Owen's patrons, when their ToS bars class actions altogether.
3) Not knowing what their own ToS says, because they claim the right to police you on their platform & in related stuff, but kicked Owen off for other stuff.
4) Deceptive practices, up to and including flat-out illegal provisions in the ToS. Eg, if SFDebris is kicked off under the current ToS, then it's the current the ToS that applies in any legal disputes about that act, not the most recent ToS... but Patreon tried to change the rules ex post facto. Also, for example this bit of their current Dispute Resolution rules is 100% illegal under California law:
"No class arbitrations or other other grouping of parties is allowed. By agreeing to these terms you are waiving your right to trial by jury or to participate in a class action or representative proceeding; we are also waiving these rights."
You cannot waive your right to trial by jury until you're in court and all that fun stuff, for example. In contracts of adhesion (eg like Patreon's contract with you when you sign up) you also have various consumer rights under California law that Patreon's ToS cannot remove.
Anyway, enough about that stuff. Owen got a few score of his patrons to all take Patreon to arbitration: they each paid $250 (well technically, anyone can pay on their behalf too, funding other people's legal actions is 100% fair & legal etc - see how Hulk Hogan's lawsuit vs Gawker was funded by Peter Thiel), and that's the absolute limit of their costs. All other arbitration fees etc are paid for by Patreon - and we're talking four-figure sums per arbitration at a bare minimum. Even if Patreon go to arbitration and concede everything in the first 30 seconds, they STILL have to pay circa $3k per individual filing.
Patreon decided not to settle with Owen for a couple of million, legal stuff happened, and their attempts to use the California courts to stop the arbitrations from proceeding failed miserably. Others are now looking to pile on, including fans of people like Sargon of Akkad & Lauren Southern, so this could very easily bankrupt them. ATM Patreon claims to have 4 million users... every single one of which now has an arbitration claim against them due to their latest ToS (see above) for example. I kind of doubt any of the tech giants are going to swoop in & bail them out. You pay $250, Patreon pays $2,750 or w/e it is, and even if you fail in your claim on day 1, you don't pay anything else... so Patreon bleeds money and goes bust.
= = =
Why am I telling you all the legal stuff? Hey, maybe you want to see Patreon burn, or just want to know about it. But most importantly, I don't want to see Chuck caught off-guard by this and scrambling to cover his expenses if Patreon goes down, so I figure it's best to get the word out now. Even if Patreon survives all this, diversifying income streams is a sensible thing to do anyway, but frankly given the utterly retarded behaviour of Patreon's lawyers to date, I'm expecting them to crash & burn.
= = =
Nick Rekieta, a fairly sharp lawyer on YouTube, has done a couple of videos about this so far, and I imagine there will be more in the weeks to come:
[youtube]https://www.youtube.com/watch?v=4kLFsicmhMM[/youtube]
[youtube]https://www.youtube.com/watch?v=KvWng0jQBcM[/youtube]
Edit: Court docs can be found here:
https://webapps.sftc.org/ci/CaseInfo.dll?CaseNum=CGC20584586&SessionID=119BE06ED56CCC56F661831B7757274A515294E4