Extra-Judicial Arbitration

by Belle Waring on November 3, 2015

The NYT has been running a series of investigative reports on the spread of arbitration clauses that stipulate any conflict between an individual and the corporation or group be resolved outside court. Many times this means that instead of judges, plaintiffs have to plead their case to professional arbitrators who are hired to work repeatedly for the same companies. People often enter the agreements without knowing they have done so, because they may be hidden in something as banal as your purchase agreement for bamboo flooring. Many of the clauses seem to be notionally opt-in, but are in fact opt-out—it’s just that if you read through carefully and noticed you had a month to contest the terms and if it wasn’t the only job you could get to feed your family, you could, in theory, abstain from the agreement. It’s not just obvious conflicts of interest at work, though the Times does allude to how an arbitrator who awarded 1.7 million to a plaintiff was blacklisted. No, many of these clauses are religion-based, and you are forced to have civil disagreements judged in an explicitly religious “court,” in which Bible scripture can be quoted. In an extra FU move, a Christian school which lost in private arbitration decided they were Jesus-court in the streets, legal-system in the sheets, and tried to contest the ruling by filing a normal appeal. One poor sap is having his case against the Church of Scientology judged in…a Scientology-based religious court. Even though he’s on a list of “Suppressive Persons” and Scientologists are forbidden from having contact with him. Not sure how that’s going to work out. Someone must surely be willing to enter into an employment contract governed by a Muslim faith-based arbitrator, then suffer some harm, and then be forced to submit to religious arbitration of their case so that this BS can finally breathe life into the poorly-constructed scarecrow known as Sharia law? The law was enacted as a way to deter class-action lawsuits, and there are plenty of lawyers in the comments at the NYT defending the contracts that mandate arbitration on this basis. In what is a final indignity, this ruling (that such clauses in contracts) were constitutional came down under the tenure of Chief Justice Roberts, even though it seems as if he argued for the position in lower courts before joining the bench? Real labor and civil rights are being ceded to corporations, and judges have said “the first amendment made me do it” even in cases where they grant there has been serious injustice done.

ETA: I think this can best be summed up as companies thinking that if they cross their fingers behind them they can call “backsies” on all existing labor and product liability laws.

{ 86 comments }

1

Lynne 11.03.15 at 4:08 pm

I hadn’t heard of this, but it seems to fall under the umbrella of ills that spring from treating corporations as citizens. They are ascribed rights as though they are citizens, and those rights often trump those of individuals. Glad to hear it is being investigated.

2

Rakesh Bhandari 11.03.15 at 4:16 pm

The loss of rights to class action lawsuits seems to leave many plaintiffs no option but arbitration though that too can be costly enough to bankrupt them, especially if they have to pay the defendant’s costs–a likely outcome if the system is as rigged as the NYT reporters seem to have discovered.
There has been a lot of talk about the loss of privacy in the new surveillance state, not so much critical discussion of the loss of rights to class action lawsuits.

3

que_es 11.03.15 at 4:19 pm

Perhaps this is an example of Sheldon Wolin’s “inverted totalitarianism,” where the citizenry is “denied the use of state power.”

4

Brenda Johnson 11.03.15 at 4:41 pm

If I had my way, it would be illegal to put arbitration clauses in any consumer contract. If big businesses want to enter into arms-length agreements to submit their spats to arbitration, so be it. But I’ve never seen a consumer arbitration clause that wasn’t a term of adhesion specifically intended to make it hard and/or impossible for the consumer to get redress. And don’t get me started about arbitration clauses in nursing home contracts, because that’s a higher level of evil altogether.

5

MarshallPeace 11.03.15 at 4:42 pm

What Paul says is, that if you have a problem with somebody, you go and talk to them. If you can’t work it out by yourselves, get some help from other members of your local community. If you still can’t find a resolution everybody buys into, then chalk it up and move on. It’s a shame to you as an ostensibly righteous person if you take the matter to Law, where things are settled by worldly force and not according to fairness and morality.

I would say that’s an excellent way for an individual to go about doing business. In a wonderful world the social whole would still need Law backed with force to control existential threats and ensure basic standards (secular: supportive of community but foundational on none of them). But what’s going on here is the machinery of Law (w/use of force) is being hijacked by small-time trimmers who aren’t using arbitration to maintain friendship in their local community. Rather the reverse, the bamboo-floor people are made ever so angry.

Personally, I don’t understand why anybody ever thinks it’s just ok to have people mad at them, but I see that’s how the world works, for now. While it does.

6

Belle Waring 11.03.15 at 4:52 pm

John (mine) wonders if you can put “we discriminate on the basis of race” in your mission statement, require all new hires to sign a clause mandating arbitration, and then flagrantly violate labor laws. Maybe it’d just be the Feds caught up with you but each individual who had been discriminated against would have zero recourse.

7

Jim Harrison 11.03.15 at 5:03 pm

Since ending mandatory arbitration would require adequately funding the public courts, it will be extraordinarily hard to limit or even reform. Privatization of basic governmental functions reflects a deep unwillingness to finance civilization at a high level. Which is why the system of compulsory arbitration is so reminiscent of feudalism: as the center decays, the local lord maintains his private court.

8

Brett 11.03.15 at 5:23 pm

I blame the Supreme Court for this one. For whatever reason, it loves arbitration – the Amex case draws the most notoriety these days, but the root of the problem goes back to the 1980s and 1990s when the Court kept expanding the reach of what could be covered under mandatory arbitration agreements.

The only sure fix is going to come from Congress passing a law that explicitly limits when arbitration can be used, which isn’t likely any time soon*. The CFPB can do some limited protection as well – I think they’re trying to restrict its use by credit card companies and banks.

* The response from conservatives has basically been that this all Evil Trial Lawyers whining about how arbitration takes away their rain-making class action settlements, and “you can always just not do the thing”. Probably representative of congressional Republicans as well.

@Brenda Johnson

If I had my way, it would be illegal to put arbitration clauses in any consumer contract. If big businesses want to enter into arms-length agreements to submit their spats to arbitration, so be it.

At the very least, they need to be explicitly capable of being overturned in the court system on appeal. The religious arbitration article mentions a company that tried to do that, but the judge basically said, “Welp, arbitration, can’t do anything”.

If I had my way, mandatory arbitration would be outlawed – companies could offer people incentives to go to arbitration instead of civil courts, but that would be it. Arbitration companies would actually have to try to be fair, because otherwise nobody would choose to go to arbitration versus the courts.

9

Roger Gathman 11.03.15 at 5:39 pm

The denial of the court system to those who are poorer, much poorer, has been going on for a long time. This is one prong in a multi-pronged trap. The study of how the police operate in Ferguson to use low income people as fine slot machines is another part of the trap.
Interestingly, the issue du jour, since yesterday, is how it can be that the mortality figures for white, middle aged people with high school education or below can be rising so quickly – the NYT quoted a demographer who said that the only comparison in recent American history was the HIV epidemic. the great drivers of the increase in mortality are addiction and suicide – often coming together in one giant malergy:

http://www.nytimes.com/2015/11/03/health/death-rates-rising-for-middle-aged-white-americans-study-finds.html?rref=collection%2Fsectioncollection%2Fscience&action=click&contentCollection=science&region=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=sectionfront

“Centers for Disease Control and Prevention and from other sources, they concluded that rising annual death rates among this group are being driven not by the big killers like heart disease and diabetes but by an epidemic of suicides and afflictions stemming from substance abuse: alcoholic liver disease and overdoses of heroin and prescription opioids.”

Notice that the flood of prescription opoids tracks a rightwing Federalist society campaign of the nineties, which was to limit “insane” damages caused by “out of control” juries hypnotized by ambulance chasing lawyers. The compulsory arbitration agreements were a tactic promoted by the same group. They did a wonderful job. The case of the woman who sued McDonalds for a million dollars for spilling hot coffee on her became as iconic as the Reagan era’s welfare mother making a high income on child support. I’m sure the response to the news about the opoid addiction mess will be to – jail the victims. That is what Americans, or at least their rulers, do, now, as a sort of cure all for all social problems.

10

Salem 11.03.15 at 6:33 pm

This post would be more convincing if it looked more seriously at the other side of the argument. A major reason for the increasing use of arbitration in the USA is that going to court is now incredibly slow, expensive and unfair. It’s not like recourse to the courts is this fantastic option that’s being denied by evil corporations – rather, mandatory arbitration is put into contracts because everyone knows ahead of time that going to court is a nightmare, and does not want the other party to be able to drag them through that nightmare if things go wrong.

And yes, bad actors then also take advantage of that.

If you actually care about the problem, you need to address the gaping defects in the courts that have made arbitration so popular. In part that means, as Jim Harrison says, properly funding the public courts, but it also means abolishing the “American rule” on costs, getting rid of juries in civil cases, restraining class-action lawsuits, reforming civil procedure, etc. Unfortunately, the NYT (and the OP?) seem to be implicitly pushing the “cram more of these people through the public courts” non-option, which is certainly good for the lawyers, but no-one else.

To me, it reads like an article complaining about the scandal of some nasty people using leaky boats to ferry customers across the Mediterranean, while remaining studiously silent on who these people are, and why so many millions want to cross like that.

11

The Temporary Name 11.03.15 at 6:39 pm

It’s not like recourse to the courts is this fantastic option that’s being denied by evil corporations – rather, mandatory arbitration is put into contracts because everyone knows ahead of time that going to court is a nightmare

Who is the “everybody” who writes those contracts?

12

Bartleby the Commenter 11.03.15 at 6:53 pm

I could have told you that somebody would show up and play the devil’s advocate about these things and I could have guessed it would be someone like Salem.

But I would prefer not to.

13

The Raven 11.03.15 at 7:29 pm

The Roberts Court — achieving levels of evil not seen since the Taney Court.

14

Roger Gathman 11.03.15 at 7:39 pm

The courts have long been the weapon of the old White America. Briefly, there was a flurry of liberalism after the 1930s, but the march to the right has been particularly significant in the judicial branch, even though it has been ignored. This march to the right has certainly not been stopped by the center-right party, the Dems – on the contrary, until recently, Democratic senators were happy to vote for the likes of Scalia and company, while the GOP never had any scruples about holding up the appointments of judges they considered too liberal. De-regulation did have a down side, after all: it dumped its lethalities in the court system, where people could sue corporations for doing what the government used to forbid them from doing. That is why the court system had to be unplugged. The right has done a bang up job of this. And the left, or what we pretend is the left – the Dems – have responded by adopting nudgery as their creed. However, publicity like these stories in the Times might actually, in this case, lead to action. I’d love to see Clinton take up the cause of limiting arbitration and restoring fairness to the system. I mean, it has a low cost for her. She isn’t going to do too much, and her corporate friends won’t be too shocked.

15

Collin Street 11.03.15 at 8:10 pm

The thing is, it’s also terrible on legal/jurisprudential grounds.

A contract is a private agreement. In the general case it’s not enforced. Strictly speaking the courts don’t enforce contracts at all, it only makes orders to fix the damages the breech causes…

… which are money orders, cash payments, unless you can claim specific circumstances in which case the court has the discretion — equitable remedies — to order people to do stuff beyond paying money.

As an enforcement of the contract an arbitration clause is thus an equitable remedy and not available as-of-right in the theoretical underpinnings of english/common-law style contract law. You can change that legislatively, obviously, but that radically changes the theoretical underpinnings of contract law, and needs proper consideration, and also an admission to yourself that that’s what you’re doing. And a lot of it isn’t legislative, even: it’s jurisprudential, Judge Fuckup in an appellate court reading the law wrong like a crazyman and makes a stupid decision that isn’t appealed ’cause it’s not like the next level up are any better.

Worst case an arbitration clause derives its power from the contract, so an enforcement of an arbitration clause is thus enforcing the contract and constitutes a judicial determination that there is a valid contract: disputes about the validity and existence of a contract cannot be resolved under the terms of a contract, because that presumes that the conttact exists and is valid. And yet this happens, regularly!

US law is terrible. Many US judges, including quite senior ones, are actually incompetent, and also evidently stupid. The US really needs a formal break in legal continuity to clear up some of the terrible, terrible jurisprudence — “non-citizens can’t file cases” wtf? — from the legal system.

16

bobbyp 11.03.15 at 8:19 pm

because everyone knows ahead of time that going to court is a nightmare

Oh, BS. Businesses routinely sue each other at the drop of a hat. Yes, courts are slow, expensive, and the outcomes may not be certain. That is why most civil actions never get to court. The parties settle.

Now we get diktat by unaccountable parties.

In the context of consumer “arbitration” we have a lowering of barriers to screw people. And corporations, unlike most real people have absolutely no scruples in this regard. Arbitration by adhesion for the little people is unconscionable.

17

Dipper 11.03.15 at 8:34 pm

In the UK things are quite different. There is a general mood that business should not rip off customers, and this has strengthened significantly since the banking crisis. There is considerable consumer protection legislation and a significant amount of government or quasi-government individuals or bodies that enforce it.

There is a small claims court specifically designed to offer low cost solutions to small money disputes, there is a Trading Standards office to enforce claims and legislation or act when goods or services do not meet the trades descriptions act, and there are a number of government appointed ombudsmen who rule on various industries, usually those where there are natural oligopolies and hence a mismatch of power between corporation and citizen.

An obvious point is that the UK is still a profitable place to do business, and that this mass of legislation and officialdom protects good business from being undercut by bad businesses.

Of course there are still cases of unhappy customers. Many of these can be found in newspaper columns or on day-time TV which are in themselves a further set of controls.

18

Manta 11.03.15 at 8:41 pm

It’s part of a wider pattern of establishing extra-judicial systems: arbitration for bussiness complaints, military courts for “terrorists”, university committees for “rapists”.

In all these cases, the excuses are the same (Salem @10 explained them very cogently) and the motivations are the same (to deprive one of the parties of its legal rights); the results are a bit varied, though: they range from the comically incompetent to the farcically corrupt.

19

Ian 11.03.15 at 8:45 pm

“The law was enacted as a way to deter class-action lawsuits, and there are plenty of lawyers in the comments at the NYT defending the contracts that mandate arbitration on this basis.”

Not exactly. The law is the Federal Arbitration Act of 1925, and the state-level Uniform Arbitration Act from around 1955; both really predate modern class-actions and both basically expected that arbitration would be a deal between commercial parties who made the choice to enter into it. It was the Supreme Court in a long series of extremely pro-arbitration rulings, particularly since the 1990s, that brought us arbitration as an effectively mandatory contract term with no ways out, and particularly arbitration as a near-complete derailing of class action suits (or even class action arbitrations.)

20

Luke 11.03.15 at 8:52 pm

Just a couple legal nitpicks:

SCOTUS’s rulings on these cases were not constitutional–they were interpretations of a particular statute, the Federal Arbitration Act (along with some attendant federalism issues). The First Amendment plays no role, as far as I know. Also there was no law on point that was enacted that was meant to deter class actions–the clauses in the contracts are meant to deter class actions. Now, I happen to believe that contract clauses are a form of law, but that’s not what people usually mean and I don’t think that’s what was implied by OP.

Arbitration clauses do represent a deeply fucked up state of affairs, and it’s great to see the NYTimes spending so much time on it. But the issue is not one of constitutional law–at least not yet.

There also seems to be some confusion about the legal state of affairs in comments: @16: there is a statute on point, these are not being enforced solely as a matter of common law contract doctrine. Again, that does not mean SCOTUS has not issued a string of hackish opinions, but it’s a different point. @8: the CFPB actually has pretty broad power over arbitration clauses, because Dodd-Frank gave it to them. Any contract that falls under their jurisdiction (basically, any major consumer financial services contract) can be regulated by them. They’ve hinted that they will ban all class action waivers and require arbitration companies to report decisions. That’s not as much as it could be, but it’s pretty darn good.

@10: your argument is unclear. Are you making the point that companies don’t like big expensive lawsuits or that small claims cannot be properly adjudicated through the cumbersome court system? If it’s the first point, that’s unsurprising and says nothing about the quality of the court system per se–indeed it might prove that class actions actually have deterrent effects. If it’s the second point, that’s a more complicated argument but one that I believe the CFPB’s study along with other evidence substantially undermines. Small claims are unlikely to ever be successfully adjudicated and it is well known in any case that contract remedies do not fully compensate. But that doesn’t mean that companies should get to devise their own corrupt and unaccountable court system.

21

Trader Joe 11.03.15 at 9:23 pm

There’s a major case involving Uber drivers that is a probable for the SCOTUS at some point….as per Belle/John’s quip @6 part of the agreement Uber drivers sign to become drivers is a willingness to arbitrate rather than use the courts.

Its obvious why this is bad for drivers. It may also be bad for Uber. Apparently such agreements are less common among supposedly arms-length independent contractors – which is what Uber wants all of its drivers treated as, and more common among employees. Its through this clause that Uber contends the drivers are ceding all of their workers comp rights – which also causes problems with state insurance laws. Its an interesting case because Uber may lose more by winning than they do by losing the case.

22

Omega Centauri 11.03.15 at 9:42 pm

I wouldn’t think arbitration per-se is bad, but rather arbitration which doesn’t make good faith efforts to find/employ arbitarters that are both competant and make good faith efforts to be fair. Perhaps a line of attack which seeks to reform the arbitrator selection process would be in order? Clearly the present system allows for the abuse of imbalances of power, but is that outcome inevitable?

23

Manta 11.03.15 at 9:53 pm

Isn’t there already a system that does what you ask, Omega? It’s called “civil court”.

You seem to think that “abuses of imbalance of power” are a bug of the arbitartion system, while they are the very reason why they are popular.

24

TM 11.03.15 at 9:54 pm

In a civilized system of laws, universal legal (or even constitutional) rights cannot be ceded by any party, period. The US in that sense can absolutely not count as a civilized polity.

The NYT reporting on the US system of injustice is extremely relevant and certainly among the most important reporting they have ever done. I find it hard to imagine anybody reading these reports and not being totally outraged by the systematic injustices revealed in meticulous detail.

25

Ian 11.03.15 at 10:00 pm

#22, Omega Centauri – It’s not exclusively a question of fairness. Your rights at an arbitration, both procedural and substantive, are quite limited. For instance (as the articles have mentioned a few times) generally there is no appeal, even if the arbiter clearly gets something completely, factually wrong. So that could be a serious problem; even a competent, fair arbiter can certainly make mistakes. Or another: your ability to obtain evidence may be very limited in arbitration. (In fact that’s one of the main attractions of arbitration for a lot of companies, since discovery is among the major reasons litigation can be expensive and slow.) In a situation with an unbalanced power relationship, that can strongly bias things towards the powerful party – for instance, if you think you were wrongly fired, there probably aren’t a lot of facts your employer needs from you to make its case, while you very much need the ability to discover non-public stuff from your employer to make yours. Or a third: arbitration can often be structured such that it’s very hard for the weaker party to afford. For instance, the rules can say there can’t be any awarding of ‘court costs’, or that the arbitration will be handled in Hungary (where the company happens to have an office.)

That’s by no means an exhaustive list. What it comes down to is that you have the rights and the admittedly cumbersome procedures you have in court mainly to ensure that the weaker party has a fair shot; that’s kind of the point of courts. Where you do away with them and parties are significantly unequal, the weaker guy is gonna suffer.

26

Brett 11.03.15 at 10:58 pm

Just to give you an idea of how biased these arbitration firms can be, just look at what National Arbitration Forum – the favorite for credit card companies before 2009. They were favoring the credit card companies in 95% of cases, and unsurprisingly said companies returned the favor with business.

27

rea 11.03.15 at 11:03 pm

#22, Omega Centauri–Another point in addition to those made by Ian: arbitrators are drawn from a relatively small pool of professionals who are compensated by the parties for their services. They are generally selected by mutual agreement of the parties. That set-up naturally produces pro-business arbitrators, because businesses are their repeat customers. Consumers or employees are not repeat customers for the arbitrators.

This isn’t overt corruption, mind you–it is more a matter of natural selection.

28

TM 11.03.15 at 11:09 pm

It reminds me of the libertarian fantasy of a private, supposedly just and cost effective court system in “The Star Fraction”. CT had a book forum about the book series but strangely (given CT’s general obsession with libertarian delusions), there was little comment on that vision.

29

Rakesh Bhandari 11.04.15 at 1:53 am

Ian @19 refers to “arbitration as a near-complete derailing of class action suits (or even class action arbitrations.)”
That seems consistent with this
http://articles.latimes.com/2011/may/10/opinion/la-oe-chemerinsky-class-action-20110510

30

BBA 11.04.15 at 2:00 am

My grandfather was an arbitrator, specializing in labor relations. Now that’s what arbitration was perfect for – the union and the employer are both repeat customers and both have a strong interest in rapidly resolving the case. Well, that world is gone now, what with labor unions going the way of the dodo.

Today the Supreme Court has basically ruled that the 1925 Arbitration Act is a super-statute that overrides every other law passed at any level before or since. They haven’t yet held arbitration clauses to apply to contracts that don’t contain them, but just give them time.

31

LFC 11.04.15 at 3:45 am

Collin Street @15
some of the terrible, terrible jurisprudence — “non-citizens can’t file cases” wtf?

I’m curious: what U.S. court has held that non-citizens can’t file cases (and on what grounds)?

32

LFC 11.04.15 at 4:44 am

R. Gathman @9
Thks for the link to that NYT piece (though I’m not sure I see any particular connection to arbitration or related issues, despite your effort to draw one).

the NYT quoted a demographer who said that the only comparison in recent American history was the HIV epidemic
Not a demographer, an economist: the person quoted as saying that is Angus Deaton, co-author of the study being reported on, who just won the 2015 Nobel prize in economics.

Re your conclusion: Would note that sentencing reform, w the goal of reducing incarceration levels, seems to be one of the very few things there is a bipartisan congressional consensus about at the moment.

33

montag47 11.04.15 at 5:04 am

I keep wondering how the “strict constructionists” on the Supreme Court felt it unnecessary to acknowledge the Seventh Amendment, the language of which is more than plain on the subject of the people’s right to civil suit. It would seem to me that any contract which denied that right as a contractual condition would be unenforceable.

34

Collin Street 11.04.15 at 5:17 am

I’m curious: what U.S. court has held that non-citizens can’t file cases (and on what grounds)?

https://en.wikipedia.org/wiki/Dred_Scott#Dred_Scott_case

“Since they were not citizens, they did not possess the legal standing to bring suit in a federal court.” The grounds I cannot guess at: I haven’t read the judgement, and doubt that I’ll find it elucidating.

Somewhat of an extreme case, but I don’t think this holding’s ever formally been overruled. Which is odd, because the US constitution directly mentions suits by non-citizens, but there you have it.

US jurisprudence is terrible.

35

Ben 11.04.15 at 6:04 am

Reminds me of Charlie Stross’ Accelerando, where the Queen of Saturn significantly extends her domain by utilizing arbitration agreements enforced by feudal Scottish law: trial by combat

No-one seeks arbitration, and she’s able to operate outside the law while ostensibly remaining within it

36

christian_h 11.04.15 at 6:33 am

Thanks to Belle for taking this issue up (I have read that NYT series with mounting outrage and I broadly knew what was going on already before) and for various legal experts among the commenters for diving into the detail.

37

heckblazer 11.04.15 at 8:13 am

The problem with Dredd Scott wasn’t that he wasn’t a citizen, it was they they ruled that as a black man he could not be a citizen because he was property. Furthermore, the court declared that blacks were “beings of an inferior order, and altogether unfit to associate with the white race, either in social or political relations, and so far inferior that they had no rights which the white man was bound to respect”. It’s not really an example that can be generalized to non-citizens in general.

AFAIK equal protection under the law is held to apply to non-citizens. I would also note that the Alien Tort Statute states
“The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.” This currently allows non-citizens to sue Americans in American courts over actions taken overseas if they violated international law.

38

Ebenezer Scrooge 11.04.15 at 11:22 am

Consumer and employee pre-dispute arbitration clauses are surely the spawn of Satan, but let’s get our facts straight.
Most arbitrators aren’t particularly unfair (apart from the NAF scandal mentioned by Brett@26.) Consumer arbitration clauses are there for a reason, but the reason isn’t a biased adjudicator. The current arbitration associations are reasonably respectable, and I don’t think are controlled by anybody other than themselves.
Consumer arbitration is mostly there to eliminate class-action litigation, and secondarily to eliminate juries. (IMO, civil defense lawyers are more afraid of juries than they should be, but that’s another post.) Most modern consumer arbitration clauses allow access to a small claims court as an alternative–it sounds better, and still precludes class actions and juries.
It’s true that arbitration affords less due process than litigation, but I’m not sure if this is a bug or feature. A lot of “due process” is much more about legitimacy than result: it makes the seamy seem seemly. Criminal defendants, for example, have a huge array of due process rights–almost none of which mean anything. On the civil side of the ledger, due process has demonstrably increased lawyers’ bills, but might not have much to do with the quality of justice. The rest of the world, for example, gets by with far less civil discovery than the US, although I admit the worldwide trend is toward somewhat more discovery.
And a final, unrelated note. I find it curious that the Times only discussed Christian arbitration, despite Christian commercial law (AFAIK) consisting of nothing but a prohibition of usury. Jews and Muslims, in contrast, have sophisticated commercial laws.

39

SamChevre 11.04.15 at 11:53 am

It might be worth noting (for the non-Americans) that American law, with the “American rule” that each party pays its own costs, makes being sued very expensive–even if the case is fairly trivial. For example, in the fairly famous “pants case” (Pearson v Chung), the defendants’ legal costs in an argument over a dry cleaner (defendant) losing a pair of pants were more than the typical household’s annual income.

One reason I’m inclined to think arbitration may be the best of (fairly bad) alternatives is that it’s the typical dispute resolution mechanism in disputes over contractual interpretation between sophisticated parties–for example, in the world of reinsurance (where I once worked) contracts routinely provide for arbitration as the mechanism for settling disputes.

40

magari 11.04.15 at 1:14 pm

I hadn’t heard of this, but it seems to fall under the umbrella of ills that spring from treating corporations as citizens.

Not really. I couldn’t get you to forgo the legal system in favor of an arbitration procedure I happen to have my fingers in. It’s more a problem of the structural inequality between corporations and those who do business (consumers and sellers of labor, i.e. workers) with corporations. And, of course, the political-legal system that assists and maintains this inequality.

41

que_es 11.04.15 at 1:34 pm

Mark Weidemaier points out that arbitration clauses might be only the tip of the iceberg:

“The attention on arbitration also seems a bit disproportionate, given the nearly-infinite ways that businesses use contracts to extract hidden value from employees and customers: incomprehensible warranty disclaimers, clauses limiting liability for damages, clauses requiring claimants to bring claims in remote and therefore expensive places, etc. Even if competition results in somewhat lower prices, that’s cold comfort for those on whom the costs fall most heavily. For all its high-mindedness, the NY Times is no different. Have a legal claim arising out of Times digital products? The Times graciously lets you file a lawsuit, but you’ll have to go to New York to do it, wherever you happen to live.”

http://www.creditslips.org/creditslips/2015/11/dear-ny-times-thank-you-for-letting-me-sue-500-miles-away.html

42

Ian 11.04.15 at 3:13 pm

#41 / que_es: I don’t think I’d agree. Arbitration is a bit unique (and uniquely important) because, at least as the Supreme Court currently understands it, it puts all those other clauses out of the reach of the law.

For instance – to use your first and second examples – there’s a large body of law that limits the ability to make warranty disclaimers, or limit liability for damages, regardless of what may be in a contract. Generally speaking you cannot, for instance, successfully say “there’s no warranty on this consumer product, if it explodes and kills you that’s your problem.” The court will simply override that. And if that law isn’t good enough (which it often isn’t, sure) we have the potential ability to improve it legislatively or judicially.

But if a contract dispute is to be resolved by arbitration, all those terms are potentially in full force and nobody can do a thing about it. It’s a structural shift.

43

Map Maker 11.04.15 at 3:26 pm

Class action lawsuits is something I can do without. $7.23 off my next amazon kindle purchase, while the lawyers who “risked” a lot earn millions of dollars. My understanding of class action is it is taking place in lieu of government prosecution. If we need to better fund prosecutors, I’m all for it, because as far as I am concerned with the last 4-5 class action settlements I received, I get coupons to purchase more products from the companies that screwed me while attorneys who worked for me, but who I have no control over reap real rewards. it is a system of abuse.

44

Anderson 11.04.15 at 3:57 pm

My main problem with arbitration is that consumers scarcely ever are really consenting to it, in any meaningful sense of the word. As correctly noted upthread, the Fed. Arb. Act wasn’t enacted with consumers in mind.

If we can ever get a Congress that cares (and don’t assume Dem legislators are all on board with the good guys here), I’d reform it to (1) arbitration must be “opt-in” with a separate document and (2) consumer transactions in interstate commerce can’t make arbitration a condition of the sale or impose any penalties (higher prices/interest, say) on a consumer who declines to opt in.

45

efcdons 11.04.15 at 3:57 pm

@43 opt out and sue them yourself if you are so disappointed with the result. I’m kind of guessing you’re not going to sue Amazon for $50. And the GOP is well known for their love of expanding and empowering regulatory agencies so you’re idea to destroy private class actions in exchange for more government enforcement of consumer and employment laws is sure to work.

46

que_es 11.04.15 at 4:36 pm

Ian re: structural shift. Good point.

47

Sebastian H 11.04.15 at 5:13 pm

Anderson has the proper reform in mind. The problem here is an intersection of judicial resource worries, standard step at a time judicial interpretation creep, and the fact that the arbitration act hasn’t been reformed to counter the judicial interpretation creep. As it stands now, the act is well beyond its intended meaning.

We need to get the discovery process more under control, but mandatory arbitration on everything isn’t the answer (especially with the arbitration system so unaccountable). Quite a bit of the problem is judges though. They are rarely willing to actually limit discovery to something manageable in any case. They only restrict it when it is WAY out of control, and often not even then. The tools are there, but the culture isn’t. (Again part of this is a resources issue. Judges don’t want to spend time on discovery fights when they have actual trials going on).

48

Roger Gathman 11.04.15 at 7:12 pm

32, Lfc, maybe I should make my argument clearer. There was a double movement at the beginning of the neo-liberal era in America. One was the move to de-regulate and privatize and one was the move to strip the consumer of the traditional recourse to the courts that would de facto regulate the actions of the corporations.

This has ended up by severely reducing upward social mobility for workers, putting them in jobs where injury or chronic pain are more prevalent, and making it much harder to find any route to make job routines safer. Arbitration is one of the threads in this tapestry.

Of course, I am speculating here, but Case, the co-author of the study, showcases certain self-reported polling results:

“Dr. Case, investigating indicators of poor health, discovered that middle-aged people, unlike the young and unlike the elderly, were reporting more pain in recent years than in the past. A third in this group reported they had chronic joint pain over the years 2011 to 2013, and one in seven said they had sciatica. Those with the least education reported the most pain and the worst general health.”

A conservative might say that the incentive to exaggerate pain in order to get disability explains these stats. I could imagine, say, Casy Mulligan making this argument. Myself, from a Marxist perspective, I would argue that this increase in pain bears all the hallmarks of speeded up production, or an increase in exploitation, which is allowed by the collapse of organized labor power both on the work site and in the government.

Mandating private arbitration is, as other commenters have noted, part of the fact that the judicial system has not expanded to meet the demands of the population. In fact, the judicial system has long been concerned more with weeding out the “unfit” than meting out justice. This squeeze on the judiciary bears fruit, from a conservative point of view, in making arbitration seem superior to one’s civil right to a trial. It is easy to make that the case if you make the judicial system hostile and overcrowded.

49

Ian 11.04.15 at 7:23 pm

49, Roger Gathman, I just wanted to thank you for saying (eloquently) something I’d considered adding – the problem that our courts have insufficient resources to handle cases isn’t some neutral fact of life that makes arbitration tempting; it’s a thing caused by deliberately starving them of resources, by more or less the same people embracing arbitration.

50

Marshall Peace 11.04.15 at 7:25 pm

@ Belle #6

“The Feds” should be a community individuals are active in, although that’s not so much the case these dark days. If “they” (not me) are violating the labor law then I (should) have the ability to appeal regardless: “basic standards”. A reasonable in-company arbitration process, such as “customer service” or “HR intervention” is reasonable and desireable. Maybe “shame” isn’t the right word but it’s not good for your mental well-being to get mixed up in court cases, and if you can’t find people willing to take your part you’re going to end up S.O.L., basically. Lots of shame, disgust, and impotent rage going around.

What Paul is saying hinges on his target audience being an ekklesia, a “moral assembly” within a powerful and corrupt Roman Empire. There isn’t any reason why businessy organizations couldn’t be run as such, but The Spirit of Capitalism promotes profit-taking, not moral community. All we’re left with is the Law, and here we see how the Law inevitably gets gamed. It’s a problem. If I had a hammer …

… On the other hand, are you willing to allow the Pueblo Peoples to maintain their separate culture as long as individuals are free to move to LA? Should people be allowed to waive their right not to be assaulted, as for kinky sex, or for cage fights under the direction of a referee? You think the Feds ought to be allowed to stick their noses in just anywhere??

51

LFC 11.04.15 at 8:37 pm

R.Gathman: I see what you’re arguing now. (No time at the moment to comment further.)

52

John Quiggin 11.04.15 at 10:59 pm

I’m surprised no one else, anywhere, seems to have picked up the sharia law point that Belle makes in the OP.

53

magari 11.05.15 at 2:27 am

@52 does the key to winning anti-arbitration legislation lie in activating the Islamophobe right? Perhaps we need to set up an “Islamic” business selling sprockets carrying purchasing agreements tying the purchaser to arbitration by Sharia. Imagine the howls. THE MUZLUHMS ARE USIN A SECRET LEGAL SYSTEM TO IMPOSE THEIR TERRORIST VALUES!

54

Anderson 11.05.15 at 2:38 am

47: the federal discovery rules have just been amended to make the cost of compliance part of the test as to discoverable matters. That will slowly shake out for the better, I hope.

55

CharleyCarp 11.05.15 at 3:39 am

Good judges will use the new rules to advance the goals in Rule 1. Bad judges will let parties continue to run wild. I predict that the courts of appeals will be pretty much useless in advancing the new rules.

I can’t say that I understand the complaints above about bad judges. I’ve seen a whole lot of judges in 25 years, and while some haven’t been worth much, the average is nonetheless pretty high.

56

t. gracchus 11.05.15 at 9:04 am

Ian @ 8:45 makes the most important point. The Supreme Court decisions are based on the Federal Arbitration Act, which is quite broad. So is the Uniform Act adopted by many states. The correction will have to come from Congress.

57

Anderson 11.05.15 at 1:02 pm

” I predict that the courts of appeals will be pretty much useless in advancing the new rules.”

Agreed. A mix of “not how it was done in my day” & “we cannot say that the district court abused its discretion.”

58

engels 11.05.15 at 1:19 pm

Agree with this post and I also found the NYT series outrageous.

(I do think some people may be getting just a bit carried away in defence of the American legal system, eg. What it comes down to is that you have the rights and the admittedly cumbersome procedures you have in court mainly to ensure that the weaker party has a fair shot; that’s kind of the point of courts…?)

59

Ian 11.05.15 at 3:31 pm

engels – Hey, I’m not saying it’s successful; I’m just saying it’s the reason that’s aspired to.

60

chris9059 11.06.15 at 12:30 am

#39, Sam
“One reason I’m inclined to think arbitration may be the best of (fairly bad) alternatives is that it’s the typical dispute resolution mechanism in disputes over contractual interpretation between sophisticated parties…”

I can’t imagine why you would think a dispute resolution mechanism suitable for contract disputes between sophisticated parties would “be the best alternative” for employment or consumer disputes between large employers/consumer companies and unsophisticated consumers/employees.

61

CharleyCarp 11.06.15 at 3:18 am

Folks might enjoy reading up on how Montana courts have been dealing with arbitration clauses. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1960675 takes us up to the beginning of the Roberts court. And here’s something a little more recent: http://caselaw.findlaw.com/mt-supreme-court/1500462.html

62

CharleyCarp 11.06.15 at 3:39 am

Here’s another: Montana says you can’t make a Montanan leave the state for arbitration — https://cases.justia.com/montana/supreme-court/2009-10-27-BA346779-FB24-4F42-9B59-1E68A0D43AA6.pdf?ts=1370900983

63

Collin Street 11.06.15 at 7:11 am

The correction will have to come from Congress.

The problem with terrible jurisprudence is that it can’t be fixed legislatively: the laws are interpreted in light of the jurisprudential framework, and if the jurisprudential framework enables the filleting of laws then, fairly obviously, changes to the laws won’t be able to fix that.

You can override a decision legislatively, but that only removes the surface manifestation of the questionable logic: you can’t direct a court to use particular analytical approaches and legal frameworks because that’s circumventing the autonomy of the courts. Change has to come either from the bench or extra-constitutionally: the first would obviously be preferable.

64

dax 11.06.15 at 9:39 am

“AFAIK equal protection under the law is held to apply to non-citizens.”

This isn’t much of a help when the law and the justice system suck, as it does in the U.S.

And it doesn’t actually help anywhere, because e.g. in democracies citizens (or rather voters) ultimately have the power of choosing the people who decide disputes, and so there is a natural bias built-in to any judicial system against non-citizens.

A little while ago the European Court of Justice ruled that the current way European data is transferred to the U.S. goes against European law. One of the problems is that Europeans cannot sue in U.S. court for redress. So one of the solutions bandied about is to allow Europeans to sue in U.S. court. But that’s not a solution. I as a European don’t want to have to sue in the U.S. to get my redress. The system in the U.S. is complicated and expensive, not something that an ordinary rational individual wants to deal with. Also the abuse of my privacy is occurring in Europe; I live in Europe; the laws I know are European; and I expect to be able to seek redress in European court. Not to mention that in the privacy vs. free speech divide, Americans and Europeans have different values, so there is just a fundamental divide and expectation of bias. If the Americans can’t agree to having the cases brought in European courts, then the Europeans should have enough backbone to tell the Americans to take a flying leap.

65

Anderson 11.06.15 at 5:26 pm

“The problem with terrible jurisprudence is that it can’t be fixed legislatively”

This is just wrong. Of course it can.

66

Sebastian H 11.06.15 at 5:51 pm

“You can override a decision legislatively, but that only removes the surface manifestation of the questionable logic: you can’t direct a court to use particular analytical approaches and legal frameworks because that’s circumventing the autonomy of the courts. “

This analysis has some value in very broad instances, but in the case of arbitration it is totally wrong. It would be easy to legislatively clarify that the arbitration act only applies between companies, or that it never applies to consumers, or any of a number of other clarifications.

67

Stephen 11.06.15 at 6:38 pm

JQ@52: “I’m surprised no one else, anywhere, seems to have picked up the sharia law point that Belle makes in the OP”.

Possibly, from a UK viewpoint, because it is extremely difficult to object to Sharia-based Islamic arbitration without also objecting to Beth Din-based Jewish arbitration. Personally, I can see the advantages of both, as long as the respondents genuinely have the choice of opting out of arbitration if they so wish. Whether that is so in either case, I don’t know.

68

engels 11.06.15 at 9:34 pm

I’m surprised no one else, anywhere, seems to have picked up the sharia law point that Belle makes in the OP

There was an–ahem–aporetic discussion about this issue here:
http://crookedtimber.org/2008/02/11/will-no-one-rid-me/

69

Bruce Wilder 11.06.15 at 11:10 pm

Collin Street @ 63: You can override a decision legislatively, but that only removes the surface manifestation of the questionable logic: you can’t direct a court to use particular analytical approaches and legal frameworks because that’s circumventing the autonomy of the courts.

Echoing other commenters, this is wrong. Separation of powers, and related constitutional provisions, prevents the legislature or the executive from directing the judiciary toward specific performance. The legislature cannot pass a bill of attainder, and so-called private bills are subject to fairly strict procedures. The legislature has to enact rules of a general, almost conceptual nature. There is, of course, a whole and elaborate structure of regulatory agency, by which the legislature effectively delegates the working out of administrative procedures to Executive departments and agencies and the judiciary supervise this elaboration of rules from laws — all of this has become part of the small-c constitution while not actually being written into the big-C Constitution.

As other commenters have noted, there is something fundamentally wrong with the common law of contracts, which is used to rationalize disempowering people vis a vis business by enacting a myth of consent by mere click or gesture. This is an elaborate logical superstructure, infecting our common understanding of law and economics. How to get people to think thru an alternative and enact it, culturally and politically, is not something I could prescribe: it would be an enormous project, and might take a generation or more to evolve. Like most major reforms, it would have to be done over and over and over again, in a long, repetitive series of changed legislative, judicial and executive practice and enactment. But, first, someone would have to propose some principle of architecture that made sense and could be elaborated to fit many, many cases, and a political coalition and movement would have to press the reform against the conservatism of interest and habit.

As it is, the active political movement alive in our politics is one that wishes to enact a neofeudalism of corporate business power. It is not effectively opposed by any idea, let alone movement, even if even the slight exposure of a NY Times series provokes revulsion.

70

Gareth Rees 11.07.15 at 11:16 am

In the UK we have the Unfair Terms in Consumer Contracts Regulations 1999. This piece of legislation clearly identifies a set of problematic cases, where there exists a contract between a consumer and a seller, but where there was such a disparity of bargaining power that the contract can be understood to have been effectively imposed by the seller on the consumer. The most important clauses are these:

“5.—(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

8.—(1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.”

Schedule 2 has some examples of unfair clauses, including:

“(q) excluding or hindering the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.”

Why not take a copy of this legislation, modify it as necessary for the differences in the legal system, and pass it in the U.S.?

71

Matt Austern 11.08.15 at 3:45 pm

In practice, the reason a copy of that legislation won’t pass in the US is that legislation must obtain a majority of the House, a supermajority of the Senate, and the president’s approval, and I’m pretty sure that a law that establishes consumers’ rights against corporations would be violently opposed by a majority of both houses of the current Congress.

72

F. Foundling 11.08.15 at 6:35 pm

@OP
>so that this BS can finally breathe life into the poorly-constructed scarecrow known as Sharia law?

Hmm. I think it’s important to keep in mind that technically, it’s not a scarecrow, but rather an (actually existing) system of law, hence the designation ‘Sharia law’. (Presumably, if it were a scarecrow, it would have been called ‘Sharia scarecrow’.) And from what I gather, it’s relatively *well*-constructed, at least for a system designed to maintain some semblance of order in an authoritarian, patriarchal Early Iron Age society – if that’s what one is looking for.

@engels 11.06.15 at 9:34 pm
>There was an–ahem–aporetic discussion about this issue here:
http://crookedtimber.org/2008/02/11/will-no-one-rid-me/

Yes, the thread linked to is very edifying. The advance of tolerance and open-mindedness is impressive. I suppose that since some leftists think Nietzsche is compatible with leftism, it should come as no surprise that some leftists think Sharia law (and state recognition of it) is compatible with leftism, too.

73

Collin Street 11.08.15 at 7:29 pm

Why not take a copy of this legislation, modify it as necessary for the differences in the legal system, and pass it in the U.S.?>/i>

Because this isn’t a problem with the statutory language, it’s a problem with the framework the statutory language is analysed in. Any text will produce broadly the same problems.

http://dl.acm.org/citation.cfm?id=358210
[reflections on trusting trust, the compiler-hack paper]

@Bruce Wilder: you say “this is wrong”, but in the actual text you write I can’t see a single point of disagreement: the import of statutory text is hugely affected by the jurisprudential framework it’s analysed in, and the legislature has essentially no control over jurisprudence.

74

BBA 11.08.15 at 8:06 pm

@Collin: I’d agree except that pre-1925 jurisprudence was that arbitration undermined the courts and was to be invalidated whenever possible. The statutory reversal of longstanding public policy forced the courts to reverse themselves as well.

The jurisprudence here draws from a purely statutory basis, not from the Constitution or the murky depths of common law, making it less likely that the courts will insist on their own rules in the face of widespread opposition.

But then this is all moot because Congress is nearly incapable of passing any legislation at all, let alone making a substantive change to what’s been settled law for 90 years.

75

engels 11.08.15 at 9:02 pm

“I suppose that since some leftists think Nietzsche is compatible with leftism, it should come as no surprise that some leftists think Sharia law (and state recognition of it) is compatible with leftism, too.”

Nietzsche isn’t a leftist and sharia law (and religion generally) isn’t a left-wing institution or goal but leftists can read Nietzsche with profit and religious believers including adherents of sharia law can belong to the left. So yes – compatible.

76

Anderson 11.08.15 at 9:30 pm

73: “Any text will produce broadly the same problems”

Dude, quit commenting about law. It isn’t your thing.

Here’s 9 USC 2:

“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

Modify the scope of that language, you’ve modified the scope of what the courts can compel people to arbitrate. Period. Do not pass Go; do not collect $200.

Case law is full of statements to the effect that “we did say such and such in case X, but that was applying the old version of the statute, which Congress has now amended, so case X is no longer on point.”

77

engels 11.08.15 at 9:36 pm

“Any text will produce broadly the same problems”

Dude, quit commenting about law. It isn’t your thing

+1

78

Eimear Ní Mhéalóid 11.09.15 at 11:32 am

Gareth @ 70:

This is apparently part of the UK implementation of the EU Unfair Terms in Consumer Contracts Directive. Ireland has a similar implementing regulation, as I presume other EU countries have also. Thus the European consumer is protected against compulsory arbitration as well as a whole host of other unfair terms. (During the Celtic Tiger boom, the regulation was very useful in whittling away the most egregious clauses in house building contracts.)

79

Collin Street 11.09.15 at 11:43 am

This has gone on reasonably long. My position.

A claim that a contract is void — or is voidable and should be voided — is a claim that the contract is without legal effect, for whatever reason. Obviously [to me], the arbitration provisions of a contract gain force through the legal effect of said contract, and if a contract is void then so are its arbitration provisions.

I understand that US law disagrees, permitting — mandating — that disputes regarding the validity of contracts be determined through arbitration processes under said contract [of disputed validity].

Which doesn’t seem to me to be logically sustainable, to put it mildly.

If, if. I may be wrong, I may have misunderstood something. I’m going on media reports, not judgements. If I’m wrong, and in the event of a dispute about a contract’s validity US courts do have a full hearing to resolve that issue before they make any order for arbitration or what-have-you then that’s sensible and OK… but if they don’t, and US courts direct this-contract-is-void type pleadings off to the arbitration process set up under the contract, then that’s a pretty major problem.

[a dispute about whether a purported contract legally exists is not, technically, by any reasonable definition, a dispute under that contract; arbitration is fine and OK if all parties accept that a contract exists. But otherwise? No.]

If someone wants to inform me that I’m wrong and US courts don’t mandate arbitration of contracts of disputed validity, I will apologise.

80

engels 11.09.15 at 2:50 pm

Colin IANAL but to my knowledge if a contract’s legally void then every clause in it is, including any arbitration clause. What makes you think otherwise?

81

Collin Street 11.09.15 at 7:41 pm

Because I’m seeing references to what to me look like pretty clear claims of voidability — unconscionable conduct, lack of subject-matter agreement on account of items being misrepresented, etc — being bundled off to arbitration. It doesn’t seem to me based on reportage that it’s standard practice in US courts to examine whether a contract is valid before its arbitration provisions are enforced.

Like I say, this is a jurisprudential problem, because — if I’m right — that’s plainly not what the text of the legislation [above] provides, nor is it compliant with the US constitution’s judicial powers provisions [judicial powers apply to all cases, and “shall be exercised” so non-delegable.]

82

engels 11.09.15 at 8:24 pm

Because I’m seeing references

Such as?

83

engels 11.09.15 at 10:16 pm

Collin, to be clear, your opinion is that you could go to a court with a contract which I (plausibly) deny I ever signed and have the case dealt with by your arbitrator because the contract has an arbitration clause? I have a low opinion of US court system but not _that_ low.

84

Collin Street 11.10.15 at 8:05 pm

Sorry for delay in responding: been busy.

Purported contracts can be void [actually “voidable”, here; the difference doesn’t matter for current purposes] for many reasons. For example, mistakes about the subject matter. I’m simplifying things, because this is actually a subtle and complex area of laws, but if two parties believe different things about what they’re contracting over it can mean — can mean — that there never was an agreement as to what the parties had to do and thus never was a contract [acceptance didn’t match offer], which obviously has to be resolved by the courts before the matter can be sent off to arbitration.

But there’s no sign of this in the reportage about the urine-soaked motor-home: you can, and presumably the parties did, make an argument that its urine-soaked nature renders it [again, oversimplifying] fundamentally different to what the purchasor thought they were buying so as to render the agreement not actually an agreement and thus meaning there’s no contract. “Making an argument” isn’t “convincing the court”; you could make the argument and the court could dismiss it, but the court has to examine it, look at the evidence you provide, and decide.

But there’s no sign of this in the reportage. It’s possible that it was missed; summary-judgement procedures don’t take very long and might not have been noticed by the people the journalist spoke to, but you’d still expect some mention. So it looks to me very much as if the courts enforced a contract of uncertain validity without examining the arguments against its validity.

85

engels 11.11.15 at 8:59 am

if two parties believe different things about what they’re contracting over it can mean — can mean — that there never was an agreement as to what the parties had to do and thus never was a contract

This is a very misleading way of describing the law of misrepresentation. I understand what you’re trying to claim – when there’s an arbitration clause, courts will ignore statute and refuse to hear arguments for a contract’s voidability – I just think it’s very implausible and you’ve not provided any evidence for it. (Making guesses about what a court did in cases you’ve heard about second-hand and which weren’t obviously voidable contracts anyway isn’t what I would call evidence.)

86

Collin Street 11.11.15 at 12:21 pm

Engels:

You don’t agree with my provisional conclusion based on the reportage that US courts appear to not properly examine claims of voidability before ordering arbitration.

It turns out you’re allowed to disagree with me on that point! It also turns out that I’m allowed to disagree with you on that point, and that my failure to satisfy you does not make my conclusion ipso-facto wrong. People given the same evidence can come to different conclusions; this is normal.

But. What you did, asking me the question “is it your position …” caused me to go to some significant effort to distinguish the various ways that contracts could become legally void without the existence of a signed “agreement” etc etc etc. This was information you already had: information you gave me no inkling you already had. Information I would not have had to provide you if only you’d been up-front about what you already knew. You even went so far as to critique my carefully-simplified presentation for being too simplified!

You were rude, you wasted my time, and I am not very happy about this.

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