Patreon has lost a lawsuit they filed against fans of Owen Benjamin, a comedian kicked off the platform due to hate speech concerns, and now will have to pay millions in arbitration fees.
Last year, Owen Benjamin was kicked off of Patreon for violating their terms on “hate speech.” Benjamin then encouraged his fans to sue the site, given they had participated in, in legal terms, “tortious interference with a business relationship.”
Patreon’s terms included language that allowed any users of the plaltform to litigate their case individually under California’s JAMS arbitration scheme.
Under California law, Patreon would have to pay the arbitration fees up front, as each user would have to be dealt with on a one to one basis. These fees range from a few thousand dollars to over ten thousand dollars per case. It is unclear how many users intended to sue the platform.
However, Patreon then changed its Terms of Service in an attempt to stop this from happening after the claims were filed:
You may not bring a claim against us for suspending or terminating another person’s account, and you agree you will not bring such a claim. If you try to bring such a claim, you are responsible for the damages caused, including attorneys fees and costs.
Patreon then sued Benjamin’s backers for attempting to receive arbitration, and filed for a preliminary injunction to stop this from happening. However, earlier this month, the judge in the case ruled against them, noting that their changes of the Terms of Service was tantamount to them changing the rules “in the middle of the game.”
The formal judgement was revealed on Wednesday, with the ruling being solidly based on previous California legal findings. Patreon will now have to go through arbitration with each of the fans, and will not be able to recoup any of the fees, even if they win the individual cases.
Patreon is also facing additional arbitrations resulting from its unilateral change in terms of service.
Their legal bills will approach $20 million this year.
All because they wrote TOS designed to screw over consumers and bar class actions. https://t.co/jwUteLWfPB
— Mike Cernovich (@Cernovich) July 30, 2020
This article aged poorly. Patreon is now on the hook to pay each of those individuals’ legal fees in their lawsuits against it.
Yes, Patreon has to pay people who are suing Patreon. pic.twitter.com/q9EZlvQNOs
— Ian Miles Cheong (@stillgray) July 30, 2020
This opens up Patreon to further suits from other creators and fans of creators who had been removed from the platform, such as Carl Benjamin, also known as Sargon of Akkad.