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The Couchbase Community Edition License Agreement states:

You may only resolve disputes with us on an individual basis, and you may not bring a claim as a plaintiff or a class member in a class, consolidated, or representative action.

Is this enforceable?

ohwilleke
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robertspierre
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2 Answers2

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Terms of service and licence agreements may be challenged as any other contract might be. Ordinary contract principles apply. These are also often consumer contracts of adhesion, so they may draw special scrutiny for unfair terms.

For example, in Douez v. Facebook, Inc., 2017 SCC 33, the Supreme Court of Canada found that a forum-selection clause in Facebook's terms of use was unenforceable.

In Uber Technologies Inc. v. Heller, 2020 SCC 16, the Court found that a mandatory arbitration clause (precluding class actions) was unenforceable.

Jen
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Class action waivers are generally allowed in U.S. law. The U.S. Supreme Court has ruled to that effect, for example, in the cases of AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013) and Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018).

It is commonplace to put arbitration agreements in license agreements (which can contain class action waivers pursuant to the cases cited above), as authorized by the Federal Arbitration Act (FAA), 9 U.S.C. ch. 1. And, since the FAA is a federal statute, it can't be overridden by state or local legislation) in any transaction affecting or related to interstate commerce, or using instrumentalities of interstate commerce (like telephones, the Internet, mail, or interstate courier services).

So, yes, this term is enforceable in U.S. law, to the extent that the license is enforceable at all (and even if some of its other provisions are void, under the legal doctrine, called the severability doctrine, that evaluates the validity of arbitration clauses separately from other clauses of a contract).

A class action waiver does not, however, prevent a state attorney-general, or a regulatory agency, from bringing suit against a company for violating certain consumer protection or regulatory laws in the name of the government (which is not a party to the contract), even if the suit is for the benefit of people who have agreed to the license and are bound by the class action waiver.

This license, as usual, contains both an arbitration agreement and a class action action waiver. The license language states in the pertinent parts:

  1. Dispute Resolution. If you have any concern or dispute, you must first try to resolve the dispute informally by contacting us. If your dispute is not resolved within thirty (30) days of submission, any resulting legal actions must be resolved through final and binding arbitration. If you reside in the Americas, JAMS will administer the arbitration in Santa Clara County, California pursuant to its Comprehensive Arbitration Rules and Procedures. If you reside in Australia, New Zealand, Japan, the People’s Republic of China, Hong Kong S.A.R., Macau S.A.R., Taiwan, South Korea, India, Sri Lanka, Bangladesh, Nepal, or a member state of the Association of Southeast Asian Nations, then the Singapore International Arbitration Centre will administer the arbitration in Singapore under its Rules of Arbitration, which rules are deemed to be incorporated by reference in this section. Otherwise, the London Court of International Arbitration (LCIA) will administer the arbitration in London under the LCIA Arbitration Rules. You agree to appear in the identified and applicable forum stated in this paragraph, and to be bound by the results of the arbitration. There will be one arbitrator that you and we mutually select. The arbitration will be conducted in the English language. Judgment upon the award rendered may be entered and will be enforceable in any court of competent jurisdiction having jurisdiction over you and us.

  2. No Class Actions; Injunctive Relief; Governing Law; Severability. You may only resolve disputes with us on an individual basis, and you may not bring a claim as a plaintiff or a class member in a class, consolidated, or representative action. Notwithstanding anything else in this agreement, if you use the Community Software in violation of this agreement, we are entitled to apply for injunctive remedies (or an equivalent type of urgent legal relief) in any jurisdiction. This agreement will be governed by and construed in accordance with the substantive laws of the State of California. By using the Community Software, you acknowledge that the software and any related technology or documentation is subject to, and represent that you will fully comply with, U.S. sanctions and export control laws and regulations. If any part of this agreement is held invalid, the remainder of the agreement will continue in full force and effect. If you have other rights not described in this agreement, including consumer rights, under the laws of your state or country, this agreement does not change those other rights if the laws of your state or country do not permit it to do so.

ohwilleke
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