Are arbitration clauses unconstitutional?

This may be of interest to you. http://www.ca-employment-lawyers.com/Arbitration.htm

When I worked for The Union of Physicians and Dentists, I took a three month class on arbitration in the Hastings College of the Law, San Francisco, to become an arbitrator. I arbitrated union disputes at that time.

Later, I became an certified arbitrator for the San Francisco American Arbitration Association (AAA). I was one in a group of arbitrators who created the AAA's Conflict Arbitration, which became the Community Boards organization. http://communityboards.org/

Once that was done, seven of us young people (except for me as I was 54,) three women and four men, formed a company to create a service to arbitrate community and California State disputes. We trained employees of California State, it's Counties, and Cities to become dispute arbitrators. This also included arbitrators for prison disputes, even school disputes. My friends and I were very good at this and we handled many disputes. Our outcomes became the standards to achieve dispute settlement success. Our design led to community dispute organizations all over the country.

I'm telling you all of this so you can identify the difference between categories of arbitration.

The different arbitration that you posted about illustrated the abuse you described and I was a victim of it. In 1980, my right knee failed and I had knee replacement surgery. That surgery at that time was very primitive. Kaiser Hospital is a student hospital. The physician who was supposed to perform the operation gave the job to a student doctor and she made a big mistake. This was hidden to me. It's too long a story, but the surgery was a disaster and left me permanently disabled. The hospital said they could not correct the damage so I sued them. Doctor's at Stanford University said it was the worst knee surgery they had ever seen and I was so damaged, they didn't want to risk trying to correct it. So I was stuck with it until I found, thirty years later, a wonderful Albuquerque surgeon in 2011 who was willing to replace my bad knee device and fixed it. It took 16 inches of rods attached to the new knee to correct the damage. He saved my leg!

I didn't know that Kaiser Hospital only allowed arbitration and it took 10 years before my arbitration was held. Three arbitrators were appointed. One chosen by my attorney, two chosen by the hospital. We could tell by the looks on their faces that they were astonished by how bad the surgery treatment I was given. The arbitration lasted two days and I loss and had to pay for the $3,000 cost of the two Kaiser Hospital arbitrators. This is when I learned how companies can win nearly all of their arbitrations. The companies choose arbitrators who depend on them for their appointment and decision income and they favor an outcome for the company. Two out of three opinions win the arbitration for the company. Always agree with the one that pays you!

The irony is that Kaiser Hospital offered $50,000 to me at the end of the first day of my arbitration. I tried to see if that amount would cover correction costs. I knew that the Stanford University doctors didn't want to do any surgery (except to amputate) and so I was stuck for life. Would I be able to work? What would I live on if I couldn't? So I didn't accept Kaiser Hospital's $50,000 offer, half of which would go to pay my attorney, leaving me $30,000 to cover any medical expenses. and the arbitration continued the next day. So I safely got my new knee when I was 82. Was I impatient?

My story to you is that arbitration controlled by companies is basically corrupt. The only way to correct such abuse is to get the congress to change the law to create the right to choose arbitration or legal suits. Trouble is that the congress people get a lot of money from the companies that have arbitration. The deck is loaded in their favor. Sad, but true.

I suggest that you never get sick, never get injured, and never be poor enough that you can't hire the best physician in the world.

BBB

Wow, BBB, what a story.

That is exactly the kind of outcome that the new documentary is trying to warn people about.

Thanks for making that distinction about the different kinds of arbitration. The first kind that you talked about was really all I thought arbitration was so I'd never paid much attention to it, I'm sorry to say.

If it's true that arbitration clauses are in every kind of contract these days -- that's kind of scary. I understand that people need to read and understand the contracts they are signing but if these clauses are everywhere what choice does anyone have?

The best way to change the law would be to get a case to the Supreme Court. Problem is that five of the justices biased in favor of the people who appointed them. The current court has five corrupt justices. But you can hope that one of the five will do the right thing. Don't hold your breath! Just hope when the Republicans kick the bucket that a honest Democrat is president.

BBB

SCOTUS ruled on it in January. Google Compucredit Corp. v. Greenwood.

Ruling was 8-1, with only Justice Ginsberg dissenting.

Source

Well, no, not exactly. You waive your right to a jury trial, that's true enough, but the seventh amendment's guarantee of a trial by jury only applies to federal cases, whereas most commercial disputes are heard in state courts.

Arbitration was traditionally disfavored under the common law. After the passage of the Federal Arbitration Act in 1925 and analogous state arbitration acts, however, arbitration became favored, and courts are very reluctant to interfere in the arbitration process.


Both very true, but I'm not sure how the one is related to the other.


No.

This was for credit cards: http://www.scotusblog.com/case-files/cases/compucredit-corp-v-greenwood/

CompuCredit v. Greenwood
Docket No. Op. Below Argument Opinion Vote Author Term
10-948 9th Cir. Oct 11, 2011
Tr.Aud. Jan 10, 2012 8-1 Scalia OT 2011

Holding: Because the Credit Repair Organizations Act is silent on whether claims can proceed in an arbitrable forum, the Federal Arbitration Act requires the arbitration agreement to be enforced according to its terms.

Judgment: Reversed and remanded, 8-1, in an opinion by Justice Scalia on January 10, 2012. Justice Sotomayor filed an opinion concurring in the judgment, which Justice Kagan joined. Justice Ginsburg filed a dissenting opinion.
SCOTUSblog Coverage

Opinion analysis: Court rebukes Ninth Circuit (again) in reaffirming arbitration agreements
Court gives short shrift to arbitration foes in predatory credit card dispute
Court to consider arbitration agreements under Credit Repair Organizations Act
Rights of the second-chance cardholder
Court takes on foreign policy dispute (UPDATED)
Petition of the day

Briefs and Documents
Merits Briefs for the Petitioners

Brief for CompuCredit and Synvous Bank
Reply brief for Compucredit Corporation and Synovous Bank

Amicus Briefs in Support of the Petitioners

Brief for Consumer Data Industry Association for Reversal of the Ninth Circuit's Judgment

Merits Briefs for the Respondents

Brief for Wanda Greenwood et al.

Amicus Briefs in Support of the Respondents

Brief for AARP and National Senior Citizens Law Center
Brief for the American Association for Justice

Certiorari-stage documents

Opinion below (9th Circuit)
Petition for certiorari
Brief in opposition
Petitioners' reply
Amicus brief of Consumer Data Industry Association
Amicus brief for Voice of the Defense Bar

Thanks Joe F.C.

This might be a stupid question but I'm going to go ahead and ask it: Why does the 7th Amendment only apply to federal cases?

As to the thing with judges..... How I understood what they were saying is that the company (but not the person bringing the suit) can decided not to go to arbitration but can demand to be heard by a jury and that the judge change change the damages that the jury awards. That's why there was so much concern over money pouring in for judicial elections.

I haven't had a chance to see the movie yet and I don't know when or if I'll ever get the chance so I'm just trying to get a better feel for the issue.

Because that portion of the seventh amendment hasn't been incorporated into the fourteenth amendment's due process clause. Or, to put it in simpler terms, it doesn't apply to the states because it just doesn't.


I think it would be impossible for an enforceable arbitration clause to permit one party to opt for a judicial resolution of the dispute but not the other. And, as you pointed out, companies typically stack the deck in their favor in the arbitration process, so I doubt they'd be interested in bypassing arbitration to go straight to trial.

I might have misunderstood the case they were talking about.

The main case "Hot Coffee" deals with is the woman who burned herself when she spilled McDonald's coffee on herself. McDonald's wanted a jury trial and so they had one.

I guess there isn't an arbitration clause when you buy fast food but it seems like the case was supposed to go to arbitration until McDonald's decided on a jury trial.

I think I need to do my homework!

I guess if there were such a clause, they'd have to put up a Caveat McEmptor sign.

Anyhow, I didn't know McD turned down a chance to go to arbitration on that one. Maybe it's only credit card companies and securities brokers that can routinely stick in a mandatory arbitration clause.

Interesting topic, by the way.

Thanks, roger.

Now that I think about listening to one interview the case actually did go to arbitration first.

The injured woman spent several days in the hospital with third degree burns that required skin grafts. Medicaid didn't pick up all the costs and she didn't feel like she should have to pay (I think she wanted $50,000 to pay the bills). McDonald's offered her $800. They wouldn't accept that so McDonald's wanted a jury trial.

is paying for something the same as signing a contract in the U.S.?

Good question.

It seems that if you pay for it with a credit card you have since the credit cards all have arbitration clauses.

Its just that no one shud sign a contract
whose terms r unacceptable to him or her.

I have stricken out the arbitration clauses
and made the other party initial the striking out,
if thay wanted to get my patronage.





David

In all seriousness, how does that work out?

I don't do a lot of online shopping and I rarely use a credit card but as I understand it the arbitration clauses are written in there and I agree simply by ordering and/or using the card.

When I update my Adobe reader I have to click that I've read the terms of service. When I set up my Amazon account I clicked that I have read the terms of service. When I visit some websites I agree to abide by the terms of service. There is no way to opt out.

Even with actual signed in person contracts I've never tried to opt out. I'd assume that they'd simply refuse me whatever I was trying to buy/use/whatever if I refused to sign the contract.

Maybe they wouldn't screw around with an attorney but they kind of have us regular people up against a wall.

I'm really curious about the opting out. How is it done. What happens when you do it?

On the third hand, the company that issued my credit card is incorporated in Delaware. Therefore, any legal dispute between this New-Jersey resident and it would seem to fall under federal jurisdiction as interstate commerce. No?

And on the fourth hand, it appears that the right to trial by jury is commonly guaranteed under state constitutions as well. To be sure, I didn't check all 50 of them. But the constitutions of my state, your state, and Boomerang's state all do guarantee it. So the substance of Boomerang's point remains unaffected: How can arbitration clauses pass muster under any constitutions, state or federal, that guarantee trial by jury as a fundamental right?

In face-to-face negotiation of contracts,
it depends on how much thay wanna get your money.
Sometimes, thay r very motivated.
This is usually in a merchant 's place of business.



I doubt that it can be done
when an on-line computer responds to u. Thay don 't negotiate.
In the examples that u mentioned, because of the difference
in size, its not likely that u can get a different deal.
As u know, with them its take it or leave it.





David

I suspect the truth lies somewhere between the documentary's position and this review found at Forbes.

http://www.forbes.com/sites/docket/2011/06/30/cup-half-full-hot-coffee-serves-up-slanted-view-of-liability-system/