Arbitration: Is It Fair When Forced?

“Arbitration: Is It Fair When Forced?” was the subject of a Senate Judiciary Committee hearing held on Thursday, Oct. 13.

Sen. Al Franken (D-MN), sponsor of the Arbitration Fairness Act (S. 987) focused his questions and comments on the ways in which mandatory arbitration clauses put everyday Americans at a disadvantage in seeking justice against large corporations. Mandatory arbitration clauses, often embedded deep in the fine print of a contract, compel parties to give up their right to sue in court when they have a dispute. Instead of going before a judge and a jury, people who sign those contracts -- such as cell phone or employment contracts -- to appear before privately hired arbitrators... who are often hired by the corporation.

Among witnesses testifying was Dr. Deborah Pierce, a physician specializing in emergency medicine. Dr. Pierce described the forced arbitration process she underwent when she brought a claim against her employer for gender-based employment discrimination. Because an arbitration clause was a mandatory part of her employment contract, Dr. Pierce was barred from bringing her complaint in a court of law; instead, she was forced to take part in an arbitration process that was skewed in favor of her employer, who had a prior relationship with the organization appointing the arbitrator. Dr. Pierce was required to pay over $200,000 in arbitration costs, including half of the $450/hour fee charged by the arbitrator. People of lesser means simply would not have been able to afford to arbitrate their claims at all. When Dr. Pierce lost her case and argued that the arbitrator did not correctly apply the law to her case, the organization supplying the arbitrator responded that it “does not certify or attest to the abilities, competence, or performance of its arbitrators, and that it does not make any ‘warranties about the ability of the arbitrator to weigh facts and law.’”

Witnesses opposing the Arbitration Fairness Act attempted to argue that forced arbitration was beneficial to ordinary people, claiming that without it companies might not be willing to offer services like credit cards at all.

Questioning Victor Schwartz, a lawyer representing the U.S. Chamber of Commerce, Sen. Franken asked whether he thought it was fair to have people sign contracts with hidden mandatory arbitration clauses.  The Chamber lawyer simply replied “fairness is in the eyes of the beholder,” and other witnesses argued that people wishing to avoid mandatory arbitration could simply avoid opening bank accounts, buying mobile phones, or engaging in any activity that involves signing contracts. Under further questioning by Sen. Franken and Sen. Richard Blumenthal (D-CT), they were forced to concede that it was nearly impossible, in the 21st century to avoid the clauses which appear in the vast majority of credit card contracts, car financing arrangements, cell phone contracts, nursing home residency agreements, and in almost every agreement to purchase a good or service online.

Sen. Sheldon Whitehouse (D-RI), pointed out that the right to a court trial was a right held to be essential to the working of our American democracy by the Founders—so much so that a system to provide for courts of law and the right to a trial by jury in certain situations are written into the Constitution.  He described the situation posed by mandatory arbitration clauses as one in which citizens are unknowingly forced to sign away their rights to a fundamental freedom guaranteed in the Constitution, and wondered if the opinions of some of his colleagues about such clauses might be different if, within the fine print of a contract, people were forced to agree to give up their 2nd Amendment right to bear arms.

The Arbitration Fairness Act, introduced by Senator Franken and co-sponsored by Senators Blumenthal, Whitehouse, and others, would amend the Federal Arbitration Act to state that “no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment dispute, consumer dispute, or civil rights dispute.” This act would return arbitration to its original intent under the law—as a process into which parties of equal power and standing could voluntarily choose to enter when a dispute arose and they both wanted to seek an alternative to litigation. Alliance for Justice is one of many organizations that signed a letter to the Senate Judiciary Committee supporting the Arbitration Fairness Act.

To learn more about the dangers of mandatory arbitration and the ways in which recent decisions by the Supreme Court to uphold forced arbitration clauses are benefiting corporations in evading justice when they violate the rights of ordinary people, download Alliance for Justice’s new report, Arbitration Activism: How the Corporate Court Helps Business Evade Our Civil Justice System.

Franken Hopes Kagan Will Follow In Stevens Footsteps

You can watch the video here:

Franken Calls the Roberts Court an “Accomplice” of Big Business

Last night at the American Constitution Society’s annual convention, Sen. Al Franken (D-MN) launched a full-throated attack on the Roberts Court’s enactment of a conservative agenda that strongly favors big business and bars ordinary citizens from access to justice.

Franken outlined the way in which the Federalist Society and conservatives controlled the debate and have effectively reshaped how many Americans think about the court system. He criticized conservative themes such as originalism, the concept of “activist judges,” and John Roberts’ infamous use of the umpire metaphor (noting that the metaphor’s originator in the 1800s asserted that judges are NOT like umpires).

According to Franken, conservatives have succeeded in moving the justice system farther and farther to the right by changing the terms of how the Constitution, the law, and the courts are discussed and debated.

Franken then strongly made the point that serving corporate economic interests is, first and foremost, THE point for conservatives; it is their goal and end game.

Calling the Roberts Court “an accomplice” of big business, Franken said it is trying to keep the American people from being able to fight back against corporate influences. He explained that, “in case after case after case, the Roberts court has put not just a thumb, but a fist, on the scale on the side of corporations—a fist with brass knuckles.” Citizens United, he said, was the “first shot in a battle to control information,” a critical issue because whomever “controls the flow of information controls the conversation, and thus comes to control the country."

Rather than allowing conservatives to continue to control the debate, Franken urged people to tell “our narrative” of the value and vital role of courts and of the need for the doors of justice to stay open to everyone. He urged groups like the ACS to not just debate constitutional issues, but take an active role in teaching ordinary Americans about the role and importance of the courts. The senator said ordinary Americans need to be brought into the debate and convinced of why issues related to access to justice matter to them.

Watch the full video here:

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American Idle: Democratic Senators Call Out GOP Obstruction

Democratic Senators took to the floor of the Senate today to protest the unprecedented level of obstruction towards nominees by their Republican colleagues.

The Obama administration has 64 nominees pending in the Senate.

There are currently 6 circuit court nominees awaiting a final confirmation vote:

• Jane Stranch and Thomas Vanaskie were nominated on August 6, 2009: pending 218 days
• Denny Chin and Rogeriee Thompson were nominated on October 6, 2009: pending 157 days
• Alberto Diaz and James Wynn were nominated on November 4, 2009: pending 128 days

Over half of Bush’s nominees were confirmed by either unanimous consent or voice vote. In this Congress, Republicans have required cloture votes on uncontroversial nominees such as as Barbara Keenan for the 4^th Circuit Court of Appeals who was ultimately confirmed by a vote of 99-0.

That’s right, 99-0. The same people who requested the vote did not even voice opposition.

They are stalling not on the basis of the nominees’ records or qualifications, but simply to obstruct Obama’s nominees. In addition to Keen, there is the example of Judge Greenaway, despite the fact that he was reported out of committee unopposed and was confirmed without opposition, he had to wait 235 days—almost eight months—for a final vote where he was confirmed 84-0. Jane Stranch and Thomas Vanaskie are rapidly approaching that same timeline, both have been waiting 218 days.

There are currently 102 federal court vacancies, and according to the Senate Judiciary Committee, 31 of those vacancies are classified as “judicial emergencies” because of the size of the caseload in the court or the amount of time a seat has sat empty.

Senator Franken (D-MN) summed it up well during his speech on the Senate floor today:

Theme of Day Three of Sotomayor Hearings is "Asked and Answered"

Day three of the Judiciary Committee hearings saw more of the same from the Senate Republicans. In stark contrast to the kid gloves they used with Justices Alito and Roberts during their confirmation hearings, Republicans aggressively questioned Judge Sotomayor. Nonetheless, she handled herself with the poise and patience she has exhibited throughout the hearings. Although she was careful not to prejudge issues that might come before the Supreme Court, Judge Sotomayor continued to answer the senators’ questions with candor and insight.

The Committee finished the first round of questioning with Senators Coburn (R-OK) , Cardin (D-MD) , Klobuchar (D-MN) , Kaufman (D-DE) , Specter (D-PA) and Franken (D-MN) taking their turns to question Judge Sotomayor. Senator Coburn was particularly hostile in questioning Judge Sotomayor about gun rights and whether there is a constitutional right to self-defense. Judge Sotomayor asserted that to her knowledge, the Supreme Court had never recognized a constitutional self-defense right, but that most states do allow people to defend themselves when necessary. Late in the session, Judge Sotomayor’s love of the Perry Mason television program was a topic of questioning and we learned that Senator Franken is also a Perry Mason fan, though both Judge Sotomayor and Senator Franken were stumped on the name of the episode in which Perry lost a case. (It was "The Case of the Deadly Verdict," by the way.)

After a break for a closed door session the hearing resumed with the beginning of the second round of questioning. So far, the second round has been more of the same from the Republicans on the Committee. Senators Sessions (R-AL) and Hatch (R-UT) continued to question Judge Sotomayor on her “wise Latina” comment. Judge Sotomayor patiently reiterated that it was a remark that “fell flat” and was intended to inspire a group of students. She continued to recognize that it might be misunderstood and sought to correct the impression of those who took her comment the wrong way.

Day four will continue with the second round of questioning of Judge Sotomayor before the Committee moves on to testimony from witnesses including members of the American Bar Association's judicial rating panel and Frank Ricci, one of the litigants in this term's "New Haven firefighter" case. Perhaps we'll hear something new from Senate Republicans tomorrow.

Day 3 of the Sotomayor Confirmation Hearing

Today, day three of the hearing starts at 9:30 a.m. Senators Cornyn, Cardin, Coburn, Whitehouse, Klobuchar, Kaufman, Specter and Franken still need to question Judge Sotomayor to finish round one of the questioning. Once the first round of questions is complete, the Committee will break and hold a closed session with Judge Sotomayor. The closed session is routine procedure for Supreme Court nominees and will involve questions about her FBI background check. The hearing will reconvene following the closed session and lunch break in the afternoon to start the second round of questions when senators are permitted up to 20 minutes of questioning. At the end of the day yesterday, however, Chairman Leahy politely asked senators who do not need their full 20 minutes for questions to be brief so that the hearing does not drag on.

Welcome to Washington, Mr. Franken

The Minnesota State Supreme Court declared Al Franken the winner in the Minnesota Senate race, and opponent Norm Coleman conceded. Franken will be seated in the Senate next week and will join the Judiciary Committee in time for the Sotomayor confirmation hearings on July 13.

We welcome Franken to the committee and hope that he finds our in-depth reports on Judge Sotomayor’s record helpful reading before the hearings commence. We also hope that his arrival in the Senate will move forward the long overdue vote on Dawn Johnsen’s nomination to head the Department of Justice’s Office of Legal Counsel.