The opinions expressed here are those of the author, a columnist for Reuters.

By Jenna Greene

Dec 10 (Reuters) - When plaintiffs' lawyers threatened to bring thousands of cases against Discovery Communications over alleged consumer data privacy violations, all parties agreed the disputes belonged in arbitration.

That’s where the consensus ends. Nearly three years later, the litigation has stalled over which arbitration provider — JAMS or National Arbitration and Mediation (NAM) — should hear the claims.

The stalemate offers a revealing look at how some companies are navigating the growing phenomenon of mass arbitration, using the rules and procedures of competing arbitration providers to gain a litigation edge.

At the core of the dispute, according to court papers, is a move by Discovery that appears to limit the upfront fees it would have to pay if all 4,000-plus plaintiffs attempted to file simultaneous arbitration demands. In mass arbitration, the fees that companies must pay each time a claim is filed can collectively swell into millions of dollars, and it becomes cheaper to settle than fight.

The case started in early 2023, when the plaintiffs sent pre-arbitration notices to Discovery stating that they intended to bring suit, alleging that the company's discovery+ streaming service used third-party software tracking “pixels” on its website. They say this resulted in the unauthorized disclosure of their video viewing habits to other companies, in violation of the Video Privacy Protection Act.

The statute carries penalties of $2,500 per violation, and successful plaintiffs can also recover legal fees, though the hurdles are high. The Manhattan-based 2nd U.S. Circuit Court of Appeals earlier this year rejected a similar suit against another video platform.

A Discovery spokesperson said the privacy allegations have no merit. Plaintiffs’ counsel Kiran Bhat at Keller Postman declined to comment.

Discovery's "visitor agreement" at the time specified that JAMS would hear any disputes.

Per the Discovery/JAMS agreement, each case would be heard individually, plaintiffs' lawyers said. Each case would also require an upfront filing fee, paid almost entirely by Discovery.

But then Discovery changed the rules.

According to court records, the same day Discovery received the pre-arbitration notices — Jan. 9, 2023 — it updated its visitor agreement, replacing JAMS with NAM, another well-known provider of alternative dispute resolution services.

Spokespeople for JAMS and NAM declined to comment.

Crucially, Discovery also updated the terms of its visitor agreement, adding specialized procedures for arbitrating mass claims as well as a provision allowing arbitrators to impose sanctions on lawyers for bringing frivolous claims.

Under Discovery’s new rules, which apply whenever more than 25 plaintiffs represented by the same counsel file similar claims, NAM will accept the filings in batches of 50 claimants, then 100, then 200, with each stage followed by mediation. Doing so removes the specter of massive up-front fees paid by Discovery — but also means the latter batches of claimants could wait years before their cases are heard.

Plaintiffs' counsel cried foul. “Discovery is taking the position that it can revoke arbitration agreements it entered into by unilaterally posting a new agreement on its website,” Keller Postman of counsel Albert Pak wrote in a 2024 letter to JAMS, asking that it move forward immediately with 693 arbitrations.

JAMS declined to do so, but added that it would be “happy to proceed” if a court were to order the parties to litigate before it.

The plaintiffs' lawyers are trying to make that happen.

Last year, they filed a petition on behalf of two individual claimants in federal court in Manhattan, seeking to compel Discovery to arbitrate at JAMS. Discovery responded with a cross motion to bring the cases at NAM.

U.S. District Judge J. Paul Oetken split the difference. Arbitration is “ultimately a matter of contract” requiring mutual assent, he wrote in a March 2025 decision.

Here, one plaintiff continued his discovery+ subscription after the new arbitration agreement, clicking through the “conspicuous notice of the change,” the judge wrote. Therefore, that customer is bound to arbitrate at NAM, he held.

The other claimant’s discovery+ subscription expired before the new agreement was put in place. That customer is not bound by the new provisions, Oetken ruled, and can still bring his case at JAMS.

Still unresolved: what happens to the other 4,225 claimants?

Keller Postman lawyers asked Discovery to produce records showing which plaintiffs quit its streaming service before the NAM agreement took effect and (per Oetken's decision) could presumably proceed at JAMS.

When Discovery declined to do so, the plaintiffs filed a new lawsuit in August in Manhattan federal court, asking U.S. District Judge Edgardo Ramos to issue a declaration specifying the forum — JAMS or NAM — that each claimant must use.

Lawyers for Discovery from Skadden, Arps, Slate, Meagher & Flom in a motion to dismiss called the petition “self-evidently absurd.” Keller Postman could determine this simply by asking its clients whether they’d discontinued their discovery+ subscription, and if so, when, they said.

Ramos sounded nonplussed by the entire fight.

“This is a very unusual case, in my experience,” he said during a telephone conference last month — the parties' first appearance before him — according to a transcript of the proceedings. ”Usually, you have the corporate defendant looking to force the claimants to go to arbitration.” He added, “I’ve never seen a case quite like this.”

(Reporting by Jenna Greene)