Consumer arbitration
Hearings, which can be held in a conference center or at an office, involve the parties presenting opening statements, evidence such as documents and tangible objects, and witnesses who testify and are cross-examined.
Co.,[12] the Supreme Court stated that by enacting §2 of the FAA, Congress made a "declaration of a liberal federal policy favoring arbitration agreements".
Dunham suggested that franchisors should add arbitration clauses to their franchise agreements to minimize exposure to class actions and large jury awards.
[24]: 1437–39 Knapp wrote that since Speidel's 1998 paper, more cases have arisen where a party successfully asserted unconscionability as a defense to the enforcement of an arbitration agreement.
[25]: 11–12 Andrew Pincus, who argued on behalf of AT&T Mobility in Concepcion, described the continued existence of the defense of unconscionability as preventing an "anything goes" approach to the enforcement of arbitration clauses.
[27]: 61 Arpan A. Sura and Robert A. DeRise wrote that, after Concepcion, an argument could be made that courts would be required to enforce egregiously unfair arbitration terms such as those found in Hooters of America, Inc. v.
[3]: 1747 Scalia discussed particular examples, such as law requiring arbitrations to allow for judicially monitored discovery, application of the Federal Rules of Evidence, or decision by a jury.
[49]: ¶96 Minnesota Attorney General Lori Swanson filed a complaint on July 14, 2009 alleging that the National Arbitration Forum engaged in several deceptive practices.
[57]: 466 [58]: ¶7 In March 2009, the Searle Civil Justice Institute published an analysis of consumer cases in AAA resulting in an award from April to December 2007.
Edward A. Dauer said that the lowered costs of arbitration as compared to litigation may be more beneficial to businesses who tend to hire counsel at an hourly rate rather than consumers whose legal representation is subject to contingent fee agreements.
[70]: 2352–53 George Padis wrote that the speed of arbitration benefits consumer claimants with small claims, who would be forced to settle for smaller amounts if the business were able to engage in delaying tactics in litigation.
These clauses, which have the effect of preventing parties from seeking relief on a classwide basis in either court or arbitration, are commonly referred to as "class action waivers".
[82]: 65 Ballard Spahr attorneys Alan Kaplinsky and Mark Levin wrote in a 2006 article that "[o]nce rare, class action waivers are today included in millions of credit card and other financial services agreements nationwide".
[44]: 175 In 2004, Linda J. Demaine and Deborah R. Hensler wrote that "[t]he vast majority of [consumer arbitration] clauses place no limits on substantive remedies.
[90]: 200–01 Peter Rutledge wrote that one advantage for consumer defendants in arbitration is that they do not have to make a personal appearance, in contrast with small claims court.
[94]: 655 Horton also suggested, though, that decisions upholding a class action waiver would cause businesses to remove consumer-friendly clauses to reduce the incentive for consumers to bring claims.
[34]: 849–50 To avoid a ruling of procedural unconscionability, some businesses began allowing consumers to reject ("opt out" of) arbitration agreements at the time of entering into a contract without penalty.
[98]: 10–11 AT&T Mobility removed those provisions[98]: 15 and ultimately developed, in consultation with Vanderbilt University Law School professor Richard A. Nagareda, a new arbitration clause similar to the one in Concepcion.
[100]: 647 Gibbs wrote that AT&T's alternative payment would not have the same deterrence effect as a class action, and that it would be highly unlikely to ever occur, given that AT&T could offer the face value of the complaint if "a beneficial result in arbitration" for the consumer was possible.
Jean Sternlight wrote in a 2012 article that, according to JAMS Executive Vice President Jay Welsh, JAMS handles a "few hundred" consumer cases each year, most of which are preemptive arbitrations by alleged credit card debtors seeking to avoid debt collection litigation, and that AAA conducted about a thousand consumer arbitrations a year.
Richard M. Alderman criticized consumer arbitration for allowing businesses to avoid unfavorable precedents rather than working within the legal system to change them.
[111] Michael L. Rustad, Richard Buckingham, Diane D'Angelo, and Katherine Durlacher stated that numerous social networking websites had arbitration agreements that violated the AAA Consumer Due Process Protocol.
[112]: 248 Subsequent legislation carved-out disputes involving high-interest loans to military members, poultry and livestock farmers, and defense contractors bringing claims about civil rights or alleged sexual assault.
[112]: 253–54 In 2014 Barack Obama issued an executive order prohibiting federal contractors from enforcing arbitration clauses against employees bringing civil rights claims or alleging sexual assault.
"[122] If enacted, the legislation "would prevent companies from imposing forced arbitration in cases covered by consumer protection laws, as well as in employment discrimination and other civil rights matters.
), Patty Murray (D-Wash.), Tammy Baldwin (D-Wis.), Kirsten Gillibrand (D-N.Y.), Heidi Heitkamp (D-N.D.), Barbara Boxer (D-Calif.), Mazie Hirono (D-Hawaii), Maria Cantwell (D-Wash.), Judy Chu (D-CA)[124] and Jeanne Shaheen (D-N.H.).
[126] They explain, "Forced arbitration has created a rigged system that blocks women from enforcing their legal rights against unaccountable and unlawful corporations for wage violations in the workplace.” [127] According to The Hill,[128] "The legislation is [Senator] Leahy’s response to a New York Times investigation that found companies are circumventing the courts by forcing consumers in fine print to settle disputes privately with an arbitrator chosen by the company.
[100]: 658 Alan Kaplinsky wrote in April 2016 that "companies who do not presently use arbitration agreements in their financial services contracts should strongly consider adding them" to take advantage of the grandfather clause.
[158] According to an American Banker article, the banking industry believes that the CFPB will issue rules restricting consumer arbitration in financial services contracts.
[166] In the remaining provinces and territories consumer arbitration clauses will block court access for all claims except some statutory “public interest” causes of action.
