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Tuesday, May 17, 2011

The Need for the Arbitration Fairness Act

Last month's Supreme Court decision in AT&T Mobility v. Concepcion was a major victory for big corporations facing class-action suits. More than that, it was a staggering blow to consumer, employment, and civil rights. Because of the Corporate Court's decision, corporations now feel free to force individuals into contracts where the individual relinquishes his or her right to pursue justice in the courts.

An editorial in the L.A. Times argues that Congress has an obligation to step in and protect consumers, employees, and anyone who hopes to hold corporations accountable for their misdeeds.
Underlying this legal debate about the interplay of state and federal law is a real-world concern: that consumers not be exploited by vastly more powerful merchants. Class actions allow injured consumers in California and other states who might not bring an action on their own to combine their claims and receive greater damages. (Opponents of class actions say the principal beneficiaries of such lawsuits are lawyers.)

With its narrow reading of the federal arbitration act, the court has put such remedies out of reach for many consumers. Fortunately, Congress can overrule the decision by amending the act to allow states to declare some arbitration agreements unconscionable.
Senators Al Franken (D-MN) and Richard Blumenthal (D-CT), along with Congressman Hank Johnson (D-GA) have introduced the Arbitration Fairness Act, which would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, restoring one of an individual's most powerful tools when squaring off against a corporation in the courtroom.

Click here for the rest of the L.A. Times editorial.

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