Arbitration

  • November 2, 2015
    Guest Post

    by Ross Eisenbrey, Vice President, Economic Policy Institute

    *This piece originally appeared on EPI’s “Working Economics Blog.”

    The New York Times has published two parts of a three-part series about the epidemic of arbitration clauses that have cropped up in millions of transactions between corporations and their customers and employees. The clauses are routinely included in employment contracts, cell-phone contracts, consumer product purchase agreements, cable subscriptions, rental agreements, and a multitude of financial transactions, as a way to prevent injured parties from having their day in court. Giving up the constitutionally protected right to sue in state or federal court is a big deal and is often the result of ignorance and deceit: millions of people have no idea the clauses are there in the fine print of contract provisions written in legalese that few individuals ever read or comprehend. They don’t find out they’ve lost their rights until they need them.

    Individuals give up not just their right to go to court but all protections regarding the venue of any hearing their claim will receive (for example, the agreement might require arbitration in a city a thousand miles away). They might give up certain remedies and the right to appeal even if the arbitrator gets the law completely wrong, and give up the essential right to join with other victims to file a class action, especially important when each claim is small and no single individual could rationally pay to hire a lawyer and bring a lawsuit for such a small sum.

    The myth is that arbitration is preferable because it allows individuals to resolve their grievances easily, quickly, and cheaply. In fact, arbitration can be more expensive for a plaintiff than a civil suit because instead of a small filing fee in court, the plaintiff will have to pay half of the arbitrator’s fee, or sometimes all of it if the arbitration clause includes a “loser pays” provision. Legal fees can be ruinous, and the Times story relates the case of a woman who owes $200,000 in attorney fees after losing a case in which her former employer allegedly destroyed evidence.

    Perhaps the worst aspect of the forced arbitration epidemic is the loss of a neutral trier of fact. Unlike judges who have lifetime appointments to the bench and are protected from financial pressure, arbitrators rely on the companies to use them again and again, creating a financial pressure to please the corporation that will have many arbitration cases in the future rather than the individual plaintiff, who will probably never use an arbitrator again.

  • July 30, 2015

    by Nanya Springer

    Many people assume that an inevitable consequence of suing someone – or being sued – is a day in court.  After all, a trial by jury in most civil cases is a constitutional right under the Seventh Amendment.  However, fewer and fewer civil suits are resulting in jury trials—less than one percent of federal civil cases since 2005, down from 5.5 percent in 1962.  The trend continues at the state level, where courts have seen a 50 percent drop in jury and bench trials between 1992 and 2005.

    In order to study why the civil jury trial is disappearing, plaintiff’s attorney Stephen Susman, a member of the ACS Board of Advisors and former member of the ACS Board of Directors, has partnered with the New York University School of Law to found the Civil Jury Project.  Susman, who provided the initial funding for the project and will serve as its executive director, says, “The Project will examine why jury trials in civil cases are rapidly vanishing, whether trial by jury still serves a useful purpose in our complex society, and if so what – if anything – can be done to reverse the trend.”

    The first of its kind in the nation, the project was conceived because of Susman’s longstanding commitment to the jury trial right.  In light of the proliferation of binding arbitration clauses and other barriers to the courthouse, Susman has repeatedly expressed concerns about the “privatization of the justice system.”  While serving as executive director of the Civil Jury Project, Susman will continue practicing law full time and teaching law students how to try cases inexpensively—a vital skill for trial lawyers, considering todays’ skyrocketing litigation costs.

    The Project’s inaugural conference will take place on Friday, September 11 in New York. For more information, visit here.

  • July 24, 2015
    Video Interview

    by Nanya Springer

    Some talk this week centered on the issue of reforming the U.S. Supreme Court, with one irresponsible proposal gaining moderate attention, but Erwin Chemerinsky has been talking about fixing the Supreme Court for years.  In an interview with ACSblog, Chemerinsky ‒ the Distinguished Professor of Law and Raymond Pryke Professor of First Amendment Law at the University of California, Irvine School of Law ‒ describes the Supreme Court’s greatest failures and proposes responsible solutions.

    Chemerinsky recalls the Lochner Era ‒ a period during which the high court struck down more than 200 laws enacted to protect consumers and employees, using the rationale that such laws interfere with freedom of contract. While the Lochner Era ended nearly a century ago, Chemerinsky explains that today’s Roberts Court “is the most pro-business Supreme Court that we’ve had since the mid-1930s.”

    This claim, as Chemerinsky notes, is backed up by empirical studies. From restricting the availability of class action suits and favoring binding arbitration to weakening the influence of unions, the Roberts Court has consistently sided with corporations over consumers and employees—all while refusing to recognize poverty as a suspect classification and determining that education is not a fundamental right.

    Chemerinsky offers reasonable proposals, such as imposing 18-year nonrenewable term limits, allowing cameras inside the Court and insisting that the justices conform to the same ethical standards, particularly with regard to recusal, as judges on other courts.

    Watch the full interview here or below.

  • February 25, 2015

    by Caroline Cox

    Katrina vanden Heuvel writes in The Washington Post that there is reason to hope for significant criminal justice reform

    In USA Today, Richard Wolf explains the religious discrimination case against retailor Abercrombie & Fitch, which asks to the Supreme Court to consider whether job applicants must ask for religious accommodations or the employer should recognize the need for them.

    David Welna reports for NPR on how the Senate Intelligence Committee report on the CIA interrogation and detention techniques has changed arguments for terrorism suspects at Guantanamo Bay.

    Scott Dodson discusses Justice Ruth Bader Ginsburg and her impact on the Supreme Court and modern jurisprudence at Hamilton and Griffin on Rights.

    In The New York Times, Katie Zernike reports on a New Jersey judge’s ruling that Governor Chris Christie broke the law by not making full pension payments.

    Mark Joseph Stern takes a look in Slate at new plans from state legislatures to tackle the problem of rape on college campuses.

  • January 27, 2015

    by Nanya Springer

    The Constitutional Accountability Center recently released the fifth installment of its year-long series, “Roberts at 10,” in which Brianne Gorod details the ways Chief Justice John Roberts’ voting record has undermined the public’s access to the courts.  She points out that Roberts has consistently taken positions limiting the scope of the standing doctrine, heightening pleading requirements, restricting exceptions to state sovereign immunity and expanding arbitration.  In fact, as Gorod notes, the Chief Justice has sided with the majority in every significant decision bolstering mandatory arbitration agreements, while every case expanding access to the courts has received his emphatic dissent.

    This restricted access to the courts, and in particular the expansion of arbitration as a mandatory alternative dispute remedy, has had far-reaching negative consequences for consumers and workers.  Governed by the Federal Arbitration Act, written arbitration agreements have become a ubiquitous, lurking menace, surfacing to harm consumers again and again and again