Retailer tries to hold customer’s money hostage to forced arbitration

By Trevor Boeckmann
AFJ Dorot Fellow
As we detail in our short documentary Lost in the Fine Print, forced arbitration clauses have become omnipresent in American society.  They’re used by companies to prevent consumers from having the chance to stand up for their rights in court when they’re harmed.  Yet most of these clauses are buried deep in the fine print of contracts and terms of service.

Now Walmart, already a corporate bad actor in so many ways, has taken this strategy to a whole new level.  They found a way to hold a customer’s money hostage until she agreed to forced arbitration.

KTRK-TV in Houston reports that on Black Friday, local shopper Maria Selva tried to buy a new TV at the big-box retailer. Walmart had sold out of the TV by the time Selva came to purchase it, but employees gave her a coupon, and had her pay in full.

She thought she could just pick up the TV at a later date.  But after she’d already paid, she was given a notice telling her she had to register online.  When she went online, she found that registering the coupon meant agreeing to forced arbitration.  She refused to accept the terms, and contacted Walmart to ask for a refund.

Walmart said no.

Instead, the company told her she would have to agree to forced arbitration, receive the TV, and return the TV.  Only then could she receive a refund.

It wasn’t until KTRK contacted the company that Walmart finally relented and issued a refund.

The consequences of forced arbitration can be great.  In Lost in the Fine Print we document the stories of Nicole Mitchell and Debbie Brenner, victims of discrimination and fraud who were never allowed to defend their rights in court.

Walmart isn’t the only company that has tried to find creative ways to impose forced arbitration.

Take General Mills, for example.  Last spring, we told you about their new arbitration policy, which purported to force consumers into arbitration if they entered a company contest, printed a General Mills coupon, or even “liked” Cheerios on Facebook.

But public pressure forced General Mills to back down.  Now we’re putting the pressure on other companies.  Join our campaign to end forced arbitration and protect everyday Americans.

Watch one consumer’s battle against Walmart and forced arbitration

Scalia on retirees losing their health insurance: “I can’t feel bad about it.”

By Trevor Boeckmann

AFJ Dorot Fellow

It’s no surprise to see the majority on the United States Supreme Court siding against consumers, employees, and everyday Americans. In the past, we’ve told you about the Court upholding forced arbitration clauses that keep those harmed by big businesses out of court, preventing women from banding together to stop employment discrimination, and allowing employers to impose their religious views on employees.

At some point, one would think the majority would start to feel bad about how their actions affect us. Apparently not.

This week, the Court heard oral arguments in a case involving health insurance for retirees.

 M&G Polymers USA, LLC v. Tackett involves a chemical company in West Virginia that had a series of collective bargaining agreements with its employees’ union. At issue was a clause in the agreement that said retired employees “will receive a full company contribution towards the cost of [health] benefits.” The union argued the benefits were guaranteed for life. The company argued it could take away these benefits whenever it chose—which it did in 2007.

As Professors Susan Cancelosi and Charlotte Garden wrote in a previous post: “The equitable case for retirees is compelling: they devoted their working lives to their employer with the expectation that they would then have health insurance to see them through their retirement.” Compelling, unless you’re Justice Antonin Scalia.

During oral argument, Justice Scalia mused:

 You know, the nice thing about a contract case of this sort is you can’t feel bad about it.  Whoever loses deserves to lose. I mean, this thing [the duration of the health benefits] is obviously an important feature.  Both sides knew it was left unaddressed, so, you know, whoever loses deserves to lose for casting this upon us when it could have been said very clearly in the contract.  Such an important feature.  So I hope we’ll get it right, but, you know, I can’t feel bad about it.

 Justice Stephen Breyer was quick to disagree:

Well, you know, the workers who discover they’ve been retired for five years and don’t have any health benefits might feel a little bad about it.

Listen to the comments of Justice Scalia and Justice Breyer:

This is nothing new for Justice Scalia.  Last year, he compared the LGBT community to “child abusers” and referred to the Voting Rights Acts as a “perpetuation of racial entitlement.”

And if the majority sides with the chemical company, that won’t be anything new either.

Nan Aron in The Huffington Post: Supreme Court to women: Father knows best

From AFJ President Nan Aron's latest column in The Huffington Post:

This is a very bad time for American women in the Supreme Court.

Three big cases were decided right at the end of its term that will profoundly affect women’s lives, subject them to conditions that are never applied to men, and damage their ability to control their own lives and health.

In McCullen v. Coakley, the Court in a “faux-nanimous” decision in which the four moderate-liberals clearly played defense, found that a 35-foot buffer zone around the entrance to abortion clinics in Massachusetts was a violation of the First Amendment. The Commonwealth had established the zones in reaction to the brutal murder of two people at a Boston clinic in 1994 and the endless harassment of women and their families attempting to enter reproductive health clinics.

But Chief Justice John Roberts, writing for the Court, swept aside reality, superimposed his own view of what happens outside clinics, and somehow found that so-called “sidewalk counselors” need to be protected more than the people who work at or make use of the clinics.

Read the full column here

Don't let Microsoft clip our rights

 The computer giant is trying to force us into forced arbitration

Microsoft, the company that gave us Vista, Ctrl-Alt-Delete and Clippy, has something in store for us that’s even worse.  The company has been phasing in forced arbitration clauses in its “services agreement.”

That means if you are harmed by a Microsoft product or service, you can’t stand up for your rights in court.  Instead, you have to take your case to an arbitrator hired by Microsoft.  Arbitrators do not need to be lawyers or follow precedent, yet their word is nearly always final and unappealable.  One study found that such arbitrators rule for the businesses that hire them 94 percent of the time.

Microsoft also won’t let you band together with others the company has wronged and bring a class-action suit – often the only way to stop a corporation from cheating millions of consumers.  The latest version of the services agreement makes this ban even more strict.

One can see why Microsoft might be fond of forced arbitration.  In a 2003 e-mail, company founder Bill Gates used the following terms to describe what it was like to use one of his own products:

 disappointed, backwards, unusable, totally confusing, strange, pathetic, completely odd, weird, scary, crazy, slow, garbage, not usable, crapped up, crap, absolute mess, craziness, terrible.

Microsoft joins a lengthening list of big businesses that are taking away our rights when we’re harmed by their products and services.  Public outrage forced General Mills to back down.  But odds are you’ve clicked through at least one contract with a forced arbitration clause in the fine print. They are showing up everywhere, from credit card contracts to the Instagram terms of use.  And in the case of Microsoft, using one of the affected products means you’ve consented to surrendering your rights.

Perhaps the best indicator of just how bad a deal forced arbitration is for consumers is the sneaky way big businesses force it on us.

Take Microsoft’s latest email announcing the changes.  “Our users' needs are at the center of everything we do,” says the happy little email. “That's why we are updating the Microsoft Services Agreement.”  But there’s no mention of forced arbitration in the email itself.  And there’s no mention of it in the FAQ that supposedly offers the “highlights.”

No, you have to click on the link to the fine print and scroll down to Section 10 before you find out what Microsoft is taking away.  If forced arbitration is so great, why does it have to be forced?  Why not offer it on a voluntary basis?  And why aren’t companies bragging about it instead of tucking it away in those long, long “agreements” that few of us have the time to read?

There is a solution.  The Arbitration Fairness Act would put an end to these outrages.  If you don’t want your rights “clipped” by the company that gave us Clippy – or by all the other corporations on the forced arbitration bandwagon – tell your Members of Congress to pass the Arbitration Fairness Act.

 Read more about forced arbitration

AFJ releases “Unequal Justice: The Relentless Rise of the 1% Court"

In a series of 5 to 4 rulings, a majority on the United States Supreme Court effectively has rewritten the law to favor big business at the expense of the American people, according to a new documentary.  Unequal Justice: The Relentless Rise of the 1% Court, produced by Alliance for Justice (AFJ), was released online Monday.

“Today, as the Supreme Court begins a new term, the court will be ‘open for business,” said AFJ President Nan Aron.  “The term is already packed with cases with the potential to restrict corporate accountability and limit everyday Americans’ civil rights and access to justice  The Court’s decisions this term could have harmful consequences for the ability of consumers, victims of discrimination, and others to get a fair day in court. 

“But no one should be surprised,” Aron said.  “What we are likely to see in the term that begins today was decades in the making.”

Unequal Justice chronicles a 40-year campaign by corporate special interests to put the thumb of big business on the scales of justice.  The campaign has its origins in a profoundly-influential memo written in 1971 by corporate lawyer Lewis Powell, just months before he himself was named to the court by President Richard Nixon.  The memo urged the business community to fight what was then a burgeoning consumer and environmental movement.

“There has been much attention in recent months to the way the executive and the legislative branches stacked   the deck in favor of ‘the one percent’ and against the rest of us,” Aron said.  “But there’s been far too little attention paid to the success of big business in influencing the Supreme Court.  With a presidential election just weeks away, it’s time to pay attention to the decisions a president makes that often have the most lasting consequences – his nominees who will be appointed to the nation’s highest court.”

Said Aron: “We produced this video because we want to highlight the importance of the Supreme Court in the lives of everyday Americans and to spur a renewed sense of activism to hold the Court accountable for its actions.”
 

To learn more about the issues discussed in Unequal Justice and to find out about hosting  a screening, go to www.unequaljustice.org  And read AFJ President Nan Aron’s call to action in The Nation.

AFJ President Nan Aron on The 1 Percent Court - and what we can do about it

We all know how big business has eroded the American dream by getting Congress and the executive branch to change the rules to favor corporations and the wealthy at the expense of the rest of us.  But it hasn’t stopped with two branches of government.  Corporate special interests have spent decades working to put their thumb on the scales of justice.  The campaign finance decision in Citizens United is only the most prominent example.

But it doesn’t have to be this way.  In a special issue of The Nation, produced in cooperation with the Alliance for Justice, AFJ President Nan Aron writes about what big business has done to the cherished American value of equal justice under law and, most important, what we can do about it:

"Liberals who came of age in the 1960s and ’70s perceived the Supreme Court largely as a constructive force, devoted to protecting civil, environmental and consumer rights and liberties, and interpreting the Constitution as a living document relevant to a rapidly changing twentieth-century world. It was a Court worthy of respect, if not reverence.

That was then. The 1 Percent Court is now in session."

Nan's full article is available here.

More from this special issue of The Nation is available here.

Media coverage for "The 1 Percent Court"

AFJ’s forthcoming video about corporate influence on the U.S. Supreme Court already is getting intensive media attention. 

AFJ worked with The Nation on a special issue devoted to “The 1 Percent Court” – available online starting Sept. 19 and on newsstands starting Sept. 20.  The issue includes an article by AFJ President Nan Aron outlining specific action steps  the legal community and the public at large can take to pry the thumb of big business off the scales of justice.  This weekend, Nation editor Katrina vanden Heuvel previews the issue on the public television series Moyers & Company.  Check their website for the date and time in your area.