SCOTUS once again knifes the public in the back...upholds "binding arbitration"

[Muldur]

SCOTUS once again knifes the public in the back...upholds "binding arbitration"

http://finance.yahoo.com/news/supreme-courts-arbitration-ruling-puts-153819233.html

Even when the activity prompting the complaint rises to the severity of being in violation of anti-trust laws, SCOTUS has held that "binding arbitration" clauses bar victims of corporate wrongdoing from banding together to file class -action lawsuits to stop the bad behavior.

Once again SCOTUS demonstrates it's contempt for the rights of ordinary people and small businesses and "subs" itself to corporate interest "doms".

We need new justices on SCOTUS, ones who put the public good over Big Business greed and malfeasance.

 

[theprestige]

http://finance.yahoo.com/news/supreme-courts-arbitration-ruling-puts-153819233.html

Even when the activity prompting the complaint rises to the severity of being in violation of anti-trust laws, SCOTUS has held that "binding arbitration" clauses bar victims of corporate wrongdoing from banding together to file class -action lawsuits to stop the bad behavior.

Once again SCOTUS demonstrates it's contempt for the rights of ordinary people and small businesses and "subs" itself to corporate interest "doms".

We need new justices on SCOTUS, ones who put the public good over Big Business greed and malfeasance.

Wouldn't the legislature, and the people, be to blame for writing laws and constitutional amendments that permit binding arbitration? I don't really see why its the fault of SCOTUS.

 

[Muldur]

SCOTUS could actually rule based on the concept of justice, instead of just parsing legal arguments. An unjust rule/law should be DECRIED by courts, not blindly followed.

 

[theprestige]

SCOTUS could actually rule based on the concept of justice, instead of just parsing legal arguments. An unjust rule/law should be DECRIED by courts, not blindly followed.

What's your favorite example from recent history, of justice outside the rule of law?

 

[Darat]

I would have thought that they were just reaffirming a long held legal principle of "English common law"?

 

[Tsukasa Buddha]

I would have thought that they were just reaffirming a long held legal principle of "English common law"?

I think the issue is the ubiquitous and pushy practice of it to avoid lawsuits, rather than arbitration itself. But I am just judging from the article.

 

[WildCat]

I once received a check for a tiny amount (I forget the exact amount, but it was less than $1) from a class action lawsuit I never heard about. I'm sure the lawyers involved, however, made millions. And that's really the only people benefitting from class actions.

 

[varwoche]

I once received a check for a tiny amount (I forget the exact amount, but it was less than $1) from a class action lawsuit I never heard about. I'm sure the lawyers involved, however, made millions. And that's really the only people benefitting from class actions.

People benefit if the class action causes the company not to rip them off in the future.

 

[iangoeswest]

I'm more than not with theprestige on this one. It's messy business, this idea of the Court ruling based "on the concept of justice." That notion only works from afar - when you get up close to a legal problem, you need a much more refined compass than "justice."

I'm back and forth on the majority's reading of the Federal Arbitration Act. I listened to the oral argument of the case and recall thinking both that I was a little out of my depth but that neither side seemed to clearly have the better of it. Like a lot of good opinions, the majority is persuasive and so is the dissent:

http://www.supremecourt.gov/opinions/12pdf/12-133_19m1.pdf

But these things are like watching paint dry if you don't go in for parsing legislation.

At any rate, the meat on the bones of THIS discussion - or at least my own interest in it - is this issue of the "purpose" of the Court. I share the OP's sense that the Court is less concerned than in the past with the rights of, and impact of laws on, individuals (although this case did not involve "individuals.") I am also attuned to the unintended consequences of trying to remedy legal problems with too broad a "justice" brush, or trying too dramatically to circumvent political processes (not at issue in this case, but suggested by the OP).

Beyond situations involving a clear Constitutional principle, why should I be comfortable with nine unelected, basically unaccountable people imposing their vision of "justice" on the laws duly passed by elected legislatures?

This isn't a simple issue, because there ARE certain principles and "rights" which are insulated from populist forces. But the starting point in a democracy is that the majority wins. If I want to wall off some area from the will of the electorate, the burden is on ME to articulate why it deserves walling off.

American Express has a rule that says that if you want to do business with them, you have to waive your right to class litigation. A crappy rule, to be sure, but not one which is so far afield of deeply held principles of ordered liberty that I think it must be stricken in the name of "justice!"

There are plenty of recent examples of the Court ruling in favor of corporate interests. There are plenty of recent examples of their NOT doing this. Justices are driven by complicated sets of guiding principles (most of them), and it's not so simple as their having "contempt for the rights of ordinary people." There are good reasons for the Court to not set aside laws unless they really have to. I don't fully subscribe to any one view, but it requires a more nuanced analogy than their being subs to corporate doms. How, exactly, are members of the court beholden to anyone?

 

[Aulus Agerius]

Wouldn't the legislature, and the people, be to blame for writing laws and constitutional amendments that permit binding arbitration? I don't really see why its the fault of SCOTUS.

It's SCOTUS' fault because there is no constitutional amendment (as a foreigner this seems very strange: Americans are so reluctant to relinquish or compromise their constitutional rights, yet the right to have an article 3 judge has been practically read out of existence in fairly common situations, under the arbitration jurisprudence) and no statute that clearly contemplates the use of mandatory, binding, pre-dispute arbitration clauses to prevent class actions against businesses.

The decision is premised on the court's rather strange reading of the Federal Arbitration Act 1925. FAA was intended to overcome contemporary hostility in the courts to use of arbitration. At the time, the people who wanted to use arbitration were businessmen: they wanted to be able to have disputes within their trade decided by arbitrators who understood the trade, rather than by the courts. Since 1925, the Supreme Court has gradually developed a reading of the FAA that prevents the states from limiting the use of arbitration, regardless of the reason. Arbitration clauses can cover not just disputes about the substance of the contract that contains the clause, but practically every dispute between the contracting parties: you can be forced to arbitrate employment discrimination claims, statutory wage and hour claims, anti-trust claims and so on.

It gets even better: it is virtually impossible to appeal from the arbitrator's decision, even on points of law. Unless you can prove that the arbitrator was corrupt, biased or knew the law and chose to ignore it, you are stuck with his decision.

The Italian Colors decision is not mandated by any statute. What the decision actually says is this: If you have a statutory claim, that is covered by an arbitration clause, then the clause is binding, even if it prevents any practical possibility of vindicating your right under the statute.

Of course, most of the court's recent arbitration cases have been about class actions. That, I think, is why the courts have taken the path favored by large businesses in these cases. The elephant in the room is that the court lacks confidence in the procedural rules that govern class actions. The arbitration cases have the effect of limiting class actions, albeit in a very haphazard way. (So, in practice, you can't bring a class action alleging employment discrimination because every potential class member will be stuck with an arb. clause, but you can bring a class action for a mass tort - product liability for example)

It's unlikely that Congress will enact legislation to limit FAA to its original purpose - allowing business arbitration over the objections of early 20th century courts: the business lobby loves arbitration because it not only prevents individuals from bringing class actions against them, it also keeps any individual suits they bring quiet: arbitration occurs in secret.

In fact, the best chance for an improvement of the arbitration situation is the CFPB, who are studying the question of arbitration and are empowered to prohibit arb. clauses in consumer financial services contracts.

 

[The Central Scrutinizer]

SCOTUS could actually rule based on the concept of justice, instead of just parsing legal arguments. An unjust rule/law should be DECRIED by courts, not blindly followed.

Define "justice". I bet you can't.

 

[Meadmaker]

People benefit if the class action causes the company not to rip them off in the future.

I have been the "plaintiff" in several class action lawsuits like the ones wildcat described.

In every case, I was perfectly happy with the company that I successfully sued.

Some examples: I successfully sued Gateway computers because they sold me a fifteen inch monitor whose viewing area was about 14 inches. Gateway had a money back, no questions asked, free shipping return policy, but those lawyers were absolutely certain that wasn't good enough for me. I got a gift certificate for ten dollars from Gateway. The lawyers got a new house.

Imax theaters. As a shareholder of Imax, I bought 500 shares and $4 per share. I sold 400 of those shares at $17 per share. I successfully sued them because they ripped me off by making misleading statements during the time I held my shares. I got a check for a few dollars. The lawyers got new cars. And of course, I was still a shareholder, so who exactly paid for my few dollar check, and their new BMWs? Me, of course. Thank goodness those lawyers were looking out for me.

 

[BStrong]

SCOTUS could actually rule based on the concept of justice, instead of just parsing legal arguments. An unjust rule/law should be DECRIED by courts, not blindly followed.

I think you may be unclear of the actual function of the court.

Their role isn't to dispense "justice," it's to insure that lower courts have acted in accordance to the law.

In this instance, individuals had entered into a contract requiring arbitration as a resolution to disputes between the parties.

They are required to observe the terms of the contract.

I see no problem here.

 

[Cain]

I have been the "plaintiff" in several class action lawsuits like the ones wildcat described.

In every case, I was perfectly happy with the company that I successfully sued.

But you're only restating Wildcat's point rather than improving upon it to address the argument at hand: part of the purpose of the payout is to deter that company, as well as other companies, from engaging in a particular practice. Beneficiaries include people who have never bought Gateway monitors or IMAX stock.

 

[JoeTheJuggler]

I once received a check for a tiny amount (I forget the exact amount, but it was less than $1) from a class action lawsuit I never heard about. I'm sure the lawyers involved, however, made millions. And that's really the only people benefitting from class actions.

While I don't have an opinion on the decision that is the topic here, I disagree with you on this point.

When each individual plaintiff's damages would be too small to bother with, these class actions suits are about the only way to address wrongdoing that adds up over a large classes. In some of these cases, the only way to hold a large institution accountable is for profiteering lawyers to pursue class action suits.

For example, I once got a few cents on a class-action settlement with my bank. The few pennies meant nothing to me, but the fact that they had to stop doing what they had been doing (intentionally paying checks out of the order they received them based on check amounts just so they could collect overdraft fees) was very important to me.

 

[JoeTheJuggler]

But you're only restating Wildcat's point rather than improving upon it to address the argument at hand: part of the purpose of the payout is to deter that company, as well as other companies, from engaging in a particular practice. Beneficiaries include people who have never bought Gateway monitors or IMAX stock.

Exactly.

 

[varwoche]

I have been the "plaintiff" in several class action lawsuits like the ones wildcat described.

In every case, I was perfectly happy with the company that I successfully sued.

Some examples: I successfully sued Gateway computers because they sold me a fifteen inch monitor whose viewing area was about 14 inches. Gateway had a money back, no questions asked, free shipping return policy, but those lawyers were absolutely certain that wasn't good enough for me. I got a gift certificate for ten dollars from Gateway. The lawyers got a new house. <snip>

In this instance, you didn't mind being the victim of false advertising. Fine, but certainly there are customers who do mind.

Maybe there should be a provision in the law so that people who don't mind being ripped off can opt-out.

 

[Meadmaker]

In this instance, you didn't mind being the victim of false advertising. Fine, but certainly there are customers who do mind.

Maybe there should be a provision in the law so that people who don't mind being ripped off can opt-out.

The issue is that there was no false advertising. Remember CRT monitors? They have a black border around the edge. The size of the image is smaller than the size of the monitor. No reasonable consumer, on seeing an advertisement for a 14 inch monitor, would assume that he would get a 14 inch image from it. However, if that consumer did expect it, he could return the monitor for a full refund, including all shipping costs.

Somehow, some lawyer convinced some jury that this was false advertising. How he did that, I don't know, but he did. That's the system, I suppose.

Now here is where the problem with class actions comes in. There was a lawyer who convinced a jury that the ignorance of a particular consumer was somehow the company's fault. Via class action, he also asserted that I, too, must have been just as ignorant as that other consumer. That other consumer apparently didn't understand how monitors worked, and was "ripped off"as a result of his ignorance. The class action suit asserts that I, too, must have been "ripped off" because I bought a monitor under the same conditions.

Well that's just not correct. I understood what I was getting. I ordered something, and I got exactly what was advertised. I was happy with my purchase and with the price. I chose not to exercise my option to return the monitor at company expense, because the monitor was exactly what I expected.

To put it a different way, the premise of class action lawsuit supporters seems to be that class action lawsuits take a small wrong suffered by many people, and force the company to bear the cost of that wrong, cumulatively, instead of being able to ignore the small, individual, wrong. That premise is flawed. While that may happen in some cases, I am not aware of any case in which that has happened to me. In the lawsuits where I have been part of the plaintiff class, I have never suffered any wrong. What has happened is that a group of lawyers, allegedly acting on my behalf, have asserted that I have suffered wrong, demanded compensation for me, and, of course, took a part of that compensation for themselves.

The lawsuit, on the other hand, did hurt me, and similar lawsuits continue to hurt me. I know that this sort of litigation drives up costs for companies whose products and services I use. That cost is passed on to me. Someone has to pay for those lawyers' BMWs, and that someone is me.

The OP article doesn't go into great depth about what the case was really about, and at the moment I'm not sufficiently interested to look up what went on at the Supreme Court. On the surface, though, it's hard for me to get outraged. Binding arbitration offers a way to address real problems that come up, without letting people profit from inventing fictitious problems.

 

[JoeTheJuggler]

The issue is that there was no false advertising.

Then that's an issue completely independent of class action lawsuits. That has to do with frivolous lawsuits filed for the purpose of getting a settlement (when it would likely cost the respondent more to defend the case than to settle).

ETA:

Somehow, some lawyer convinced some jury that this was false advertising. How he did that, I don't know, but he did. That's the system, I suppose.

Oh wait--so it this isn't a case of a frivolous lawsuit filed for the purpose of getting a settlement. It was false advertising. You just disagree with the jury's decision.

Again, the issue you have is not with it being a class action suit.

So who do you think should make such decisions in cases in controversy brought to the civil courts if not juries?

 

[JoeTheJuggler]

To put it a different way, the premise of class action lawsuit supporters seems to be that class action lawsuits take a small wrong suffered by many people, and force the company to bear the cost of that wrong, cumulatively, instead of being able to ignore the small, individual, wrong.

I wouldn't say a "small wrong". I would say a wrong that only causes small damages to each individual plaintiff. If these didn't cause big dollars worth of damages, no lawyer would be interested in taking them, and we wouldn't be having this conversation.

Is stealing 1 dollar from a million people somehow less wrong than stealing $1 million from one person?

Wrong is wrong, isn't it? The fact that there are wrongs that cause greater damages to individuals doesn't make one someone into a right.