Access to Justice

  • June 20, 2013
    Guest Post

    by Paul Bland, Senior Attorney, Public Justice. This piece is cross-posted at Public Justice’s blog.

    So, today, in American Express v. Italian Colors, the U.S. Supreme Court said that a take-it-or-leave-it arbitration clause could be used to prevent small businesses from actually pursuing their claims for abuse of monopoly power under the antitrust laws. Essentially, the Court said today that their favorite statute in the entire code is the Federal Arbitration Act, and it can be used to wipe away nearly any other statute.

    As Justice Kagan said in a bang-on, accurate and clear-sighted dissent, this is a "BETRAYAL" (strong word, eh?) of the Court's prior arbitration decisions. You see, until now, the Supreme Court has said that courts should only enforce arbitration clauses where a party could "effectively vindicate its statutory rights." Today, in a sleight of hand, the five conservative justices said that this means that arbitration clauses should be enforced even when they make it impossible for parties to actually vindicate their statutory rights, so long as they have a theoretical "right" to pursue that remedy.

    The plaintiffs in this case, restaurants and other small merchants, claim that American Express uses its monopoly power over its charge card to force them to accept American Express's credit cards and pay higher rates than they would for other credit cards. This is called a "tying arrangement" under the antitrust laws -- American Express is alleged to be using its monopoly power over one product to jack up the price of another product to higher rates than it could charge in a competitive market.

  • June 20, 2013
    Guest Post

    by John Vail, Vice President and Senior Litigation Counsel, Center for Constitutional Litigation

    In a decision one justice called a “betrayal of our precedents,” the Supreme Court today ruled that corporations can use arbitration clauses to insulate themselves from liability.  

    The decision culminates a thirty year judicial effort by the Court to turn an innocuous 1920s statute, the Federal Arbitration Act, into a weapon used to thwart enforcement of rights by consumers, employees, and small businesses. 

    In American Express v. Italian Colors Restaurant, a restaurant filed a class action complaining that American Express had used monopoly power to force merchants to accept credit cards at rates approximately 30 percent higher than the fees for competing credit cards, in violation of antitrust statutes.  American Express moved to compel arbitration based on a clause in its agreement with the restaurant that provided, in part, “[t]here shall be no right or authority for any Claims to be arbitrated on a class action basis.”

    The restaurant -- invoking a line of Supreme Court cases that held open the possibility courts could invalidate arbitration clauses that effectively precluded vindication of federal statutory rights -- opposed arbitration.  It demonstrated that costs of litigating an individual claim were “’at least several hundred thousand dol­lars, and might exceed $1 million,’ while the maximum recovery for an individual plaintiff would be $12,850, or $38,549 when trebled,” and argued that preclusion class resolution effectively precluded it from vindicating its claim. 

    The Second Circuit agreed, having held that “the only economically feasible means for . . . enforcing [respondents’] statutory rights is via a class action.” The Supreme Court reversed.

    The Court, with Justice Scalia writing for a five person majority, first found nothing specific in the antitrust laws  - no “congressional command “ - requiring the Court  to reject the waiver of class arbitration.“The antitrust laws do not ‘evinc[e] an intention to pre­clude a waiver’ of class-action procedure.”

    The Court also found no “entitlement to class proceedings for the vindication of statutory rights” flowing from congressional approval of Rule 23, noting that in AT&T Mobility v. Concepcion it already had rejected the argument that “federal law secures a nonwaivable opportunity to vindicate federal policies by satisfying the procedural strictures of Rule 23 or invoking some other informal class mechanism in arbitration.”

  • June 20, 2013

    by Jeremy Leaming

    During her featured remarks at the 2013 ACS National Convention, Sen. Elizabeth Warren (D-Mass.) ripped the federal bench, and the Supreme Court in particular, for a pro-corporate trend. Today the high court issued an opinion in American Express Company v. Italian Colors Restaurant that buttresses Warren’s sharp critique.

    In the American Express case, the Court’s right-wing justices found that the Federal Arbitration Act (FAA) blocks courts from invalidating contractual waivers of class arbitration, another blow to individuals hoping to band together to hold corporations accountable for malfeasance. A group of merchants who accept American Express cards had lodged a class action against the financial giant arguing that its rate on accepting American Express cards violated federal antitrust laws. The high court led by Justice Antonin Scalia, however, essentially held that a clause in the American Express agreement barring class action arbitration trumped antitrust laws.

    Scalia maintained that the FAA was enacted by Congress as a “response to widespread judicial hostility to arbitration” and that its text “reflects the overarching principle that arbitration is a matter of contract. There is no ‘contrary congressional command’ that “requires us to reject the waiver of class arbitration here,” Scalia wrote.

    Scalia notes the merchants argued that forcing them to litigate individually would prove too costly, but concluded “the antitrust laws do not guarantee an affordable path to the vindication of every claim.” Later in the opinion, Scalia writes, “But the fact that it is not worth the expense involved in proving a statutory remedy does not constitute the elimination of the right to pursue that remedy.”

    As Media Matters’ Senior Counsel & Director of its Courts Matter project Lara Schwartz noted, “In other words, Scalia essentially was saying it’s OK if the rules make it impossible to win as long as they don’t make it impossible to play.

    Justice Elena Kagan lodged a dissent, joined by Justices Ruth Bader Ginsburg and Stephen Breyer. (Justice Sonia Sotomayor recused herself in this case). Kagan wrote, that the “owner of a small restaurant (Italian Colors) thinks that American Express (Amex) has used its monopoly power to force merchants to accept a form contract violating the antitrust laws.” But that same agreement with Amex barred the restaurateur from bringing the claim.

    “And here is the nutshell version of today’s opinion, admirably flaunted rather than camouflaged: Too darn bad.”

  • June 18, 2013
    Guest Post

    by G. Ben Cohen. Mr. Cohen is OF COUNSEL at The Capital Appeals Project. Cohen was VISITING LITIGATION COUNSEL at the Charles Hamilton Houston Institute in 2011.

    On April 29, 2013, after briefing and oral argument on whether the State’s failure to fund counsel for a defendant should be weighed against the state for speedy trial purposes, five Justices of the U.S. Supreme Court turned a blind eye in Boyer v. Louisiana to the funding crisis in Louisiana’s public defender system and declined to address the seven year wait between Jonathan Boyer’s arrest and trial. On Boyer’s heels comes another case underscoring the unconscionable harms of the Bayou State’s decimated criminal justice system – which has depended on traffic tickets to fund the defense function.

    On June 20, 2013 the Supreme Court will decide whether to grant certiorari in Michael Garcia v. Louisiana.  The public defender office could not afford to adequately provide separate capital representation to Mr. Garcia and his two co-defendants.  By law, however, the Public Defender could not represent all three defendants himself.  Even the prosecutor informed the trial court at Mr. Garcia’s very first hearing that the multiple representation might pose a conflict of interest, but the judge left the Public Defender to work it out. 

    The Public Defender assigned all the capitally-certified attorneys from his office, including himself, to represent Mr. Garcia, and assigned lawyers who were not certified to represent defendants facing the death penalty to represent the two co-defendants. This refusal to hire outside counsel saved the public defender office from going bankrupt.  It also prevented the state from seeking death against the two other defendants.  But it meant that Mr. Garcia’s lawyer chose him as the only defendant against whom the State could seek the death penalty.

  • May 30, 2013
    Guest Post

    by Brandon L. Garrett and Lee Kovarsky. Garrett is a professor of law at the University of Virginia School of Law and Kovarsky is an assistant professor of law at the University of Maryland School of Law. They are co-authors of a habeas corpus casebook, Federal Habeas Corpus: Executive Detention and Post-conviction Litigation, which was just published by Foundation Press.

    This week, the Supreme Court handed down habeas decisions on two different gateways through procedural obstacles to federal habeas review. The first decision involved an “innocence” gateway. In McQuiggan v. Perkins, the Court held that, despite a constitutional claim’s untimeliness, a federal court could reach the claim’s merit if there exists a reasonable chance that the inmate was wrongfully convicted. The second gateway is a “bad lawyering” gateway. In Trevino v. Thaler, the Court held that inadequate state post-conviction representation can excuse the default of a trial-phase ineffective-assistance-of-counsel (IAC) claim if, as a practical matter, a state post-conviction proceeding was the only forum for a state inmate to raise it. In each case, the Court avoided mechanical readings of statutes or precedents in favor of interpretations that reflect the byzantine reality of modern habeas corpus review.

    In the “innocence gateway” case, Floyd Perkins was serving a life sentence in Michigan. Perkins argued that he had new evidence proving his innocence: witnesses would say that another man was the killer, that the other man had bragged he had done it, and that the other man was trying to wash blood-stained clothes the day after the killing. Perkins had been convicted largely based on testimony of the other man, as well as two others who said they overheard Perkins admit his guilt. Perkins argued that his new evidence of innocence entitled him to merits review of his IAC claim, which was untimely under the one-year federal limitations period. He could not, however, show that he had acted with “due diligence” in bringing this evidence to the attention of the judge. He argued that new evidence of innocence should excuse the untimely filing, notwithstanding the technical defects in the petition.