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Next in an occasional series on terms of use

Many genealogists — The Legal Genealogist included — use online storage services to keep backup copies of critical files. There are a lot of these services around, and one of the biggest, with both free storage and paid storage depending on what you sign up for, is Dropbox.

dropboxWhich, this past week, announced that it is changing its terms of use as of next month.1

Terms of use, remember, are “the limits somebody who owns something you want to see or copy or use puts on whether or not he’ll let you see or copy or use it. These are limits that are different from copyright protection, since the law says what is and isn’t copyrighted and you can own a thing without owning the copyright. So this isn’t copyright law; it’s contract law — you and whoever owns the thing you want to see or copy or use reach a deal.”2 And in the context of a service like Dropbox, the whole focus is on use: the terms of use govern whether we can use the service and, if we do, what rights we’re giving Dropbox — or giving up to Dropbox.

In general, the Dropbox terms of use are just what you’d expect from an online storage service. The existing terms are pretty clear but the new terms are even better in terms of being written in plain clear English:

Your Stuff & Your Permissions
When you use our Services, you provide us with things like your files, content, email messages, contacts and so on (“Your Stuff”). Your Stuff is yours. These Terms don’t give us any rights to Your Stuff except for the limited rights that enable us to offer the Services.

We need your permission to do things like hosting Your Stuff, backing it up, and sharing it when you ask us to. Our Services also provide you with features like photo thumbnails, document previews, email organization, easy sorting, editing, sharing and searching. These and other features may require our systems to access, store and scan Your Stuff. You give us permission to do those things, and this permission extends to trusted third parties we work with.

Sharing Your Stuff
Our Services let you share Your Stuff with others, so please think carefully about what you share.3

Though the words are changing a bit, the overall meaning of those provisions aren’t changing from what they were before this 2014 amendment.

Users are still bound by an Acceptable Use Policy, which isn’t changing, and which bars the usual sorts of behaviors like monkeying around with the security systems and trying to get access to other people’s files.

So what are the key changes? There are two of them.

First, there’s a new section in the Privacy Policy which explains how Dropbox will handle requests from government agencies for access to information. It provides:

Law & Order. We may disclose your information to third parties if we determine that such disclosure is reasonably necessary to (a) comply with the law; (b) protect any person from death or serious bodily injury; (c) prevent fraud or abuse of Dropbox or our users; or (d) protect Dropbox’s property rights.

Stewardship of your data is critical to us and a responsibility that we embrace. We believe that our users’ data should receive the same legal protections regardless of whether it’s stored on our services or on their home computer’s hard drive. We’ll abide by the following Government Request Principles when receiving, scrutinizing and responding to government requests for our users’ data:

• Be transparent,
• Fight blanket requests,
• Protect all users, and
• Provide trusted services.4

Dropbox also posted has an online posting, Dropbox’s Government Data Requests Principles, explaining its views on this.

The second key change is one that has a number of Dropbox users up in arms. It’s putting in a binding arbitration section to its terms of use and a blanket bar on class action lawsuits:

Resolving Disputes

Let’s Try To Sort Things Out First. We want to address your concerns without needing a formal legal case. Before filing a claim against Dropbox, you agree to try to resolve the dispute informally by contacting We’ll try to resolve the dispute informally by contacting you via email. If a dispute is not resolved within 15 days of submission, you or Dropbox may bring a formal proceeding.

We Both Agree To Arbitrate. You and Dropbox agree to resolve any claims relating to these Terms or the Services through final and binding arbitration, except as set forth under Exceptions to Agreement to Arbitrate below.

Opt-out of Agreement to Arbitrate.
You can decline this agreement to arbitrate by clicking here and submitting the opt-out form within 30 days of first accepting these Terms.

Arbitration Procedures. The American Arbitration Association (AAA) will administer the arbitration under its Commercial Arbitration Rules and the Supplementary Procedures for Consumer Related Disputes. The arbitration will be held in the United States county where you live or work, San Francisco (CA), or any other location we agree to.

Arbitration Fees and Incentives. The AAA rules will govern payment of all arbitration fees. Dropbox will pay all arbitration fees for claims less than $75,000. If you receive an arbitration award that is more favorable than any offer we make to resolve the claim, we will pay you $1,000 in addition to the award. Dropbox will not seek its attorneys’ fees and costs in arbitration unless the arbitrator determines that your claim is frivolous.

Exceptions to Agreement to Arbitrate. Either you or Dropbox may assert claims, if they qualify, in small claims court in San Francisco (CA) or any United States county where you live or work. Either party may bring a lawsuit solely for injunctive relief to stop unauthorized use or abuse of the Services, or intellectual property infringement (for example, trademark, trade secret, copyright, or patent rights) without first engaging in arbitration or the informal dispute-resolution process described above.

No Class Actions. You may only resolve disputes with us on an individual basis, and may not bring a claim as a plaintiff or a class member in a class, consolidated, or representative action. Class arbitrations, class actions, private attorney general actions, and consolidation with other arbitrations aren’t allowed.

Judicial forum for disputes. In the event that the agreement to arbitrate is found not to apply to you or your claim, you and Dropbox agree that any judicial proceeding (other than small claims actions) will be brought in the federal or state courts of San Francisco County (CA). Both you and Dropbox consent to venue and personal jurisdiction there.5

So what does that mean?

• Unless you take specific action to opt out, the only way you’ll be able to sue Dropbox for damages for anything it does wrong is in your (or its) local small claims court. Most small claims courts can’t award more than a set amount of damages — in Kentucky or Rhode Island, that’s $2,500. In Dropbox’s home state of California, the limit is $10,000.6

• If you don’t opt out, any disagreement between you and Dropbox will be submitted to an arbitrator from the American Arbitration Association who generally isn’t bound by the rules of evidence that courts have to follow; the arbitrator’s decision will be final, and you won’t be able to get a court to review it except under very unusual circumstances. Opting out is a simple process; you click through to a form and fill out your account information.

• Even if you do opt out of the arbitration clause, you won’t be able to join forces with other users to sue as a group in what’s called a class action lawsuit. And you’d have to file any suit you do bring as an individual in California.

So… what do I think about these?

On one hand, I’m not a fan of compulsory arbitration. Experience shows that, in general, arbitration is skewed towards the big guys and not towards individual consumers. And I don’t like the idea of saying individuals with small individual claims can’t band together in a class to save on their own costs and hassles in trying to collect when a company fouls up.

On the other hand, for most of us, Dropbox’s services are free, and suing somebody for making a mistake when I’m not paying for the service at all strikes me as being a bit unreasonable too. And there are terms written into this arbitration agreement that are better than most, such as Dropbox paying all the arbitration fees, not trying to collect its own attorneys fees except in frivolous cases, and paying a premium any time a consumer wins an award higher than Dropbox offers in settlement.

Bottom line: if you’re paying for online backup by Dropbox, have your company lawyer take a careful look at the new terms. For the rest of us, if the arbitration concept bothers you, go ahead and opt out. And if the class action ban bothers you more, choose another online backup service.


  1. Ramsey Homsany, “Updating our Terms of Service, Privacy Policy and Dropbox for Business Agreement,” Dropbox Blog, posted 20 Feb 2014 ( : accessed 23 Feb 2014).
  2. Judy G. Russell, “A terms of use intro,” The Legal Genealogist, posted 27 Apr 2012 ( : accessed 23 Feb 2014).
  3. Planned Amended 2014 “Dropbox Terms of Service, Posted: February 20, 2014, Effective: March 24, 2014,” ( : accessed 23 Feb 2014).
  4. Planned Amended 2014 “Dropbox Privacy Policy, Posted: February 20, 2014, Effective: March 24, 2014,” ( : accessed 23 Feb 2014).
  5. Planned Amended 2014 “Dropbox Terms of Service, Posted: February 20, 2014, Effective: March 24, 2014,” ( : accessed 23 Feb 2014).
  6. See “Small Claims Court Limits for the 50 States,” ( : accessed 23 Feb 2014).
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