Arbitration

  • July 12, 2011
    Video Interview

    The Supreme Court continues to limit the ability of people to seek justice in the courts, Public Citizen’s Allison Zieve tells ACSblog. Zieve cited as an example, the high court’s April opinion in AT&T Mobility v. Concepcion, which found in favor of AT&T’s effort to bar consumers from joining in a class action to challenge the wireless company’s charges.

    In an interview following ACS’s 2010 – 2011 Supreme Court Term Review, Zieve, litigation director for Public Citizen, said:

    It seems to me that the court is consistently unsympathetic to class action suits, to broader suits and has a distinct anti-litigation trend in a lot of its cases. The Court doesn’t seem to feel that state law claims, tort claims, consumer protection claims, have a lot of value, and so not only do plaintiffs frequently lose in those cases, they do so through opinions that don’t really show much respect for the civil justice system. So, I think that raises a significant concern about people’s ongoing access to the courts, access to court remedies. There’s a lot of situations in which state law provides the only remedy, and the Supreme Court has been cutting those access to the court system off through a very sympathetic view of arbitration, a broad reading of the federal arbitration act, through preemption, standing requirements that have been made more and more stringent over the years; so there’s a lot of ways the courthouse doors are being closed to just regular people.

    For more analysis and information about corporate interests before the Supreme Court and other federal courts, visit a the ACS Web Page, Corporations and the Courts, with resources that include two ACS Issue Briefs, “Why Does Business (Usually) Win in the Roberts Court?,” “Judicial Hostility to Litigation and How it Impairs Accountability for Corporations and Other Defendants,” and a recent article from the official ACS Journal, the Harvard Law & Policy Review, called “Class Action at the Crossroads: An Answer to Wal-Mart v. Dukes.”

    Watch Zieve’s interview below or download a video podcast of the interview. The interview can also be seen here.

  • June 29, 2011

    by Jeremy Leaming

    The Senate Judiciary Committee heard testimony today on how several recent Supreme Court decisions are undermining corporate accountability and limiting individuals’ abiilty to seek justice through the courts.

    The hearing focused on three cases: Wal-Mart v. Dukes, which blocked some 1.6 million women alleging discrimination by Wal-Mart from asserting their claims as a class, AT&T v. Concepcion, which upheld an arbitration clause banning consumers from disputing an AT&T charge as a class, and Janus Capital Group v. First Derivative Traders, which halted a lawsuit by investors alleging that Janus Capital knowingly made misleading statements.

    “In my view, each of these decisions gives corporations additional power to act in their own self-interest and limits the ability of Americans to have their day in court,” said Senate Judiciary Chairman Patrick Leahy at the start of the hearing.

    University of Colorado law professor Melissa Hart, who authored an ACS Issue Brief on state elimination of equal opportunity programs, echoed these concerns in her testimony about Wal-Mart and Conception, lamenting the court’s “hostility” toward the class action device.

  • May 12, 2011

    Law firms devoted to the interests of large corporations are not surprisingly taking advantage of a road being forged by the Supreme Court’s conservative wing to hobble efforts of consumers and workers to challenge corporate malfeasance.

    Reporting on the high court’s recent opinion in AT&T v. Concepcion, in which the high court’s conservative wing led by Justice Antonin Scalia shut down a consumer led-class action lawsuit against one of the nation’s largest telecommunications companies,The New York Times noted, “Though the decision concerned arbitrations, it appeared to provide businesses with a way to avoid class-action lawsuits in court. All they need do, the decision suggested, is use standard-form contracts that require two things: that disputes be raised only through the informal mechanism of arbitration and that claims be brought one by one.”

    In May 10 “newsletter” produced by Foley & Lardner LLP, John Douglas suggests that big employers should take advantage of the Concepcion opinion, and notes that the same conservative majority appears ready to continue protecting corporate interests, citing recent oral argument in Wal-Mart Stores, Inc. v. Dukes involving the nation’s largest worker class-action lawsuit alleging discrimination against the retailing giant.  

    Douglas writes:

    Based on the behavior of the Justices during the oral argument [in Wal-Mart v. Dukes] of the case (http://tinyurl.com/3g4sxjk), it is already expected that the Supreme Court's upcoming decision involving a nationwide class action against Wal-Mart may throw some sand in the gears of a current juggernaut of class actions already attempting to raise claims of systemic discrimination based on sex and race. AT&T Mobility does the same thing. Particularly in the area of wage and hour class actions, AT&T Mobility should provide some long-awaited music for the ears of employers swamped by wave after wave of wage and hour class actions raising ever more technical, and “creative,” legal theories.

    How is this? Simply put, at least potentially, every employer big enough to face significant class action litigation risk (generally those with more than a couple dozen employees) can now have its employees sign an agreement to arbitrate as a condition of employment — and furthermore, require that any claim brought in arbitration be an individual one.

    As noted here earlier, Constitutional law scholar and professor Erwin Chemerinsky in a piece for the Los Angeles Times blasted the Concepcion majority as “favoring the interests of businesses over consumers, employees and others suffering injuries.”

     

  • May 11, 2011

    The Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion is “nothing other than a conservative majority favoring the interests of businesses over consumers, employees and others suffering injuries,” writes UC Irvine School of Law dean Erwin Chemerinsky in an op-ed in the Los Angeles Times.

    Chemerinsky explains that the court’s decision to deny individuals with claims of about $30 each their right to file a class action because the Federal Arbitration Act trumps California law does not comport with the Act itself, which provides that arbitration agreements are not to be enforced when the state court deems them unenforceable, as California law did here.

    “The Supreme Court ignored this and explicitly said that it was important to protect defendants, such as corporations, from the in terrorem ("in fear") effects of class action that pressure them into settlements,” Chemerinsky writes. “The court's conservative majority could not have been clearer that it was favoring businesses over consumers.”

    [The National Senior Citizens Law Center’s Rochelle Bobroff fleshes out this point in a guest post for ACSblog.]

    Chemerinsky notes Justice Stephen G. Breyer’s dissent, which points out that “only a lunatic or fanatic sues for $30,” and that the class action mechanism is intended for precisely these situations.

    He continues:

  • April 27, 2011

    The Supreme Court led by its conservative wing issued an opinion limiting states’ ability to nullify contracts that prohibit class action arbitration.

    In AT&T Mobility v. Concepcion, Justice Antonin Scalia writing for the 5-4 majority concluded that a provision of the Federal Arbitration Act (FAA) bars enforcement of a California law that nullifies contracts that prohibit class-action arbitration. Scalia was joined by Chief Justice John Roberts, Anthony Kennedy, Clarence Thomas and Samuel Alito. The opinion overturns a ruling by the U.S. Court of Appeals for the Ninth Circuit, which found that the FAA provision did not preempt the California law.

    Scalia wrote that the “overarching purpose of the FAA … is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings. Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.”

    Justice Stephen Breyer, joined by Justices Ginsburg, Sotomayor and Kagan, lodged a dissent, arguing that California’s law “is consistent with the federal Act’s language and primary objective.”

    Breyer added, “California is free to define unconscionability as it sees fit, and its common law is of no federal concern so long as the state does not adopt a special rule that disfavors arbitration.”

    The Associated Press says today’s opinion “could greatly restrict the use of class actions, in which a party represents a much larger group, in disputes over contracts.”

    In a guest post for ACSblog, Public Justice’s Paul Bland Jr. charged that the “corporatist idea that the FAA preempts all state law limiting class-action bans hasn’t caught on in the lower courts because there is no serious legal or intellectual basis for it. If the Supreme Court decides to completely federalize the law in this area, it will have to invent from whole cloth new federal law that is not supported by anything in the language of the FAA or in its history.”

    Bland also participated in an ACS briefing on the AT&T Mobility v. Concepcion case. Video of the briefing, which included a panel discussion, is available here.

    Update: Senate Judiciary Chairman Patrick Leahy, in a statement on the opinion, said, "The opinion of five Supreme Court Justices in AT&T v. Concepcion will further weaken protections for consumers. The divided court decided that state laws which would protect consumers' rights to band together are preempted by Federal law. This is the latest in a series of cases where five conservative justices have hampered the rights of consumers to be protected by state laws. Class actions are an effective way to ensure consumer protection, but today's opinion by the Roberts Court continued to move in a direction that undermines this access to justice for hardworking Americans."