U.S. Chamber Of Commerce Paying People $2,000 To Pretend Binding Arbitration Is Good

from the tilted-playing-field dept

For years, AT&T worked tirelessly to erode its customers' legal rights, using mouse print in its terms of service preventing consumers from participating in lawsuits against the company. Instead, customers were forced into binding arbitration, where arbitrators, chosen and paid by the companies under fire, unsurprisingly rule in favor of companies more often than not. Initially, the lower courts derided this anti-consumer behavior for what it was, noting that however brutally flawed the class action is, binding arbitration, at least the way we let companies design it, in many ways made things worse.

But these lower court roadblocks quickly evaporated when the Supreme Court ruled in 2011 (Mobility v. Concepcion) that what AT&T was doing was perfectly OK. While lower courts saw this as an "unconscionable" abuse of consumer rights and the law, the Supreme Court bought into the ongoing myth that binding arbitration is a hyper-efficient, modern alternative to class actions. In reality, it shifted things to a form of binding arbitration that was costly, lopsided, and cumbersome for consumers, and less transparent for those used to visiting Pacer to dig up legal histories.

Fast forward to a few years ago, when a growing number of companies and services (like Fairshake) began streamlining the arbitration process, making it easier and less expensive for consumers (and yeah, class action lawyers). This shifted the balance of power back toward consumers, and starting in 2018 or so companies like Uber, AT&T and Comcast began to complain they were being swamped with arbitration feuds.

So now we're seeing another sea change. Now, even giants like Amazon are being forced to take consumer complaints back to the courtroom, in part because a system they constructed to dodge accountability is no longer helping them do that.

At the same time, company lobbyists are firing up their opposition to the Forced Arbitration Injustice Repeal (FAIR) Act, which would (as the name implies) prohibit the practice in several sectors. The bill has already passed the House, and to prevent it from passing in the Senate companies have been busy cultivating phony "grass roots" (astroturfed) opposition to the bill. That usually involves using some proxy org (in this case the U.S. Chamber of Commerce) to throw money at people to write (or just support) op-eds in papers around the country insisting how wonderful binding arbitration is:

"The pro-arbitration op-ed was already written and included in the body of the email. The op-ed calls arbitration “a relatively cheap and fast process” in a “much more relaxed” environment than a courtroom, which “could soon be eliminated if plaintiffs’ lawyers have their way.” The last line makes its objective clear: “Arizona’s workers and consumers can’t afford for Senators Sinema and [Mark] Kelly to allow [the FAIR Act] to happen."

As with most campaigns of this kind (they're pretty common in telecom), it involves reaching out to credible people to see if they'd willing to sell their principles downstream for some cash:

"Late last week, David Chami, an Arizona attorney who specializes in consumer protection, received an email from Drew Johnson, who identified himself as working with the U.S. Chamber of Commerce. Johnson offered Chami $2,000 if he could get one of his clients to sign their name to an op-ed opposing the Forced Arbitration Injustice Repeal (FAIR) Act, a bill in Congress."

You know you have a sound argument when you have to pay people to support it. There's so much valid disdain against the class action process (which usually provides lawyers a new boat and plaintiffs a $20 gift certificate to Arby's if they're lucky), it's not hard to lean on that to nab support for binding arbitration. But that in and of itself doesn't mean binding arbitration is good.

While conceptually the idea of binding arbitration isn't terrible, the way it has been implemented in the United States is an incomprehensible mess. It reduces the chance of a fair hearing of consumer grievances and makes it as annoying as possible for consumers to challenge corporate power. That's why surveys tend to suggest broad, bipartisan support for eliminating the practice. Yeah, the traditional class action system is also a hot mess. But replacing it with something less effective and more annoying was never quite the solution many companies pretended it was. And now that awareness of this fact is growing, they're getting a bit nervous.

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Filed Under: arbitration, arizona, astroturfing, binding arbitration, class action lawsuits, opeds
Companies: us chamber of commerce


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  • icon
    Bill Silverstein (profile), 13 Aug 2021 @ 7:04am

    They are not being forced.

    The giants are not being forced to take cases back to the Courtroom.

    People figured out how to hoist them on their own petard, as the cost to bring thousands of arbitration actions turns out to be less than attorney fees .

    reply to this | link to this | view in chronology ]

  • icon
    sumgai (profile), 13 Aug 2021 @ 7:10am

    We're often told that these "arbiters" are retired judges and/or lawyers, but the few I've personally seen weren't fit to adjudicate a traffic ticket.

    reply to this | link to this | view in chronology ]

    • identicon
      David, 13 Aug 2021 @ 8:14am

      Re:

      Nobody said there wasn't good reason for them to be retired.

      reply to this | link to this | view in chronology ]

    • icon
      MightyMetricBatman (profile), 13 Aug 2021 @ 12:43pm

      Re:

      Guess how they ended up in the "arbitration" racket.

      Also, retired police officers as arbiter without formal legal education is a terrible practice. You go to an attorney for legal advice and help, not the police.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2021 @ 7:17am

    anyone like to name an organisation or procedure that is actually good, without having to bribe anyone( and i include politicians, law makers, courts and uncle Tom Cobbly in this as well)? as for Arbitration, the biggest way for companies to get out of receiving any legal punishment and for workers/the public to be refused any compensation for being ripped off and screwed into the ground by the fuckers above!!

    reply to this | link to this | view in chronology ]

  • identicon
    Pixelation, 13 Aug 2021 @ 7:38am

    US (echo) Chamber of Commerce

    They are lobbyists. Nothing good to say.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2021 @ 9:09am

    arbitration ... “could soon be eliminated if plaintiffs’ lawyers have their way. ... surveys tend to suggest broad, bipartisan support for eliminating the practice.

    Funny how this post doesn't mention that nobody's planning to eliminate arbitration. If a dispute arises and both parties are convinced that binding arbitration would be better, they're free to use it: "Nothing in this Act, or the amendments made by this Act, shall be construed to prohibit the use of arbitration on a voluntary basis after the dispute arises."

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Aug 2021 @ 9:34am

    have embraced have been cultivating

    Come on, guys. It's not like it is Monday, after all.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 13 Aug 2021 @ 10:18am

    'The companies love it so you should to.'

    Why yes, I'm sure binding arbitration is quick and easy, when the 'judges' are already predisposed to a particular side it makes coming out with rulings a lot less of a hassle.

    That binding arbitration was pushed for by companies to the point that it was part of using their services/platforms should tell you all you need to know about which side it benefits the most, the fact that a group trying to defend it has apparently sunk so low as to attempt to bribe people into showing support for the practice is really just icing on the rotten cake.

    reply to this | link to this | view in chronology ]

  • icon
    ECA (profile), 13 Aug 2021 @ 10:58am

    last 40 years

    Insted of hiring Judges to rule by the laws in the area, we let the corps do the work. Including renters.

    Why is the cost of a court room about as bad as going to the hospital?
    Just cause a group, rather then a Lawyer, debates with you, dont mean the law is on THEIR SIDE.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 14 Aug 2021 @ 6:51pm

    Oh yes. The noble class action attorneys. Bastions of freedom. Employment class actions in many states are a scourge brought by attorneys desperate to invent new technical violations to line their pockets. See CA and PAGA.

    reply to this | link to this | view in chronology ]


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