People For the American Way Foundation

Eliminating Courts, Eliminating Justice

If you ever think that courts don’t matter, ask yourself this: Why are major corporations and arch-conservative judges going to such lengths to prevent you from having your day in court when someone has violated your legal rights?

The New York Times has an in-depth three-part series of reports on arbitration, the system by which ordinary people are increasingly being coerced into surrendering their right to the protections provided by the American judicial system. Agreements to resolve disputes by arbitration are increasingly becoming a standard part of the all-or-nothing contracts that enormous corporations force individuals to sign as a condition of doing business with them. With private arbitration, you surrender your right to a courtroom with a neutral judge and a wide variety of substantive and procedural protections for all parties. Instead, the company picks a private arbitrator whose living depends on getting cases from corporate interests. The protections of the court system are cast aside. And you can’t have class action lawsuits, which are often the only way to hold wrongdoers accountable when they harm large numbers of individuals relatively small amounts, so it is often not worthwhile for a wronged party to pursue arbitration.

Contracts have existed for centuries. In theory, they are negotiated by two people or businesses in a process of give-and-take, where both parties fully understand what they are agreeing to. But as anyone who has cable TV or a cell phone can tell you, most contracts we sign are handed to us “as is,” take it or leave it. If you don’t agree to the terms imposed by some enormous corporation with millions of customers, the cost to you (life without a phone) is a lot more than the cost to the company (the loss of one of millions of customers). With vastly unequal bargaining power, the consumer has little choice but to agree. And, in fact, most people sign consumer contracts or click the “I agree” box online with little to no knowledge or understanding of the agreement.

As the Times reports:

By inserting individual arbitration clauses into a soaring number of consumer and employment contracts, companies like American Express devised a way to circumvent the courts and bar people from joining together in class-action lawsuits, realistically the only tool citizens have to fight illegal or deceitful business practices.

Over the last few years, it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or shop online without agreeing to private arbitration. The same applies to getting a job, renting a car or placing a relative in a nursing home.

By banning class actions, companies have essentially disabled consumer challenges to practices like predatory lending, wage theft and discrimination, court records show.

“This is among the most profound shifts in our legal history,” William G. Young, a federal judge in Boston who was appointed by President Ronald Reagan, said in an interview. “Ominously, business has a good chance of opting out of the legal system altogether and misbehaving without reproach.”

How did we reach a point where individuals can be routinely victimized by large corporations and denied access to the courts to vindicate their legal rights?

To a great extent, the blame can be laid at the feet of five people: The conservative majority of the Supreme Court. Their devastating 5-4 rulings like those eviscerating the Voting Rights Act or allowing billionaires and special interests to spend unlimited money in politics are well known. Less well known are 5-4 decisions in arbitration cases. Particularly notorious are AT&T v. Concepcion, where the conservatives ruled that giant corporations can use arbitration agreements to undermine state consumer protection laws across the country, and American Express v. Italian Colors Restaurant, where the conservatives empowered monopolists to use arbitration agreements to bypass federal antitrust laws.

As if this weren’t bad enough, arbitration is hardly the only weapon corporate interests are using to block their victims from vindicating their rights in court.

In fact, just today, the Supreme Court is hearing oral arguments in Spokeo v. Robins, where corporate interests claim that their victims can’t sue in federal court if their “only” injury is that a right created by Congress was violated. Last month, the Court heard oral arguments in Campbell-Ewald Company v. Gomez, where a large company argued for the power to terminate a class action suit against it early on by quickly offering a settlement to the lead plaintiff representing the class.

Fair and just courts are vitally important in providing equal justice under the law to those who would otherwise be powerless against the enormous entities who have so much more power and resources. So it is no surprise that those powerful interests are so dedicated to blocking ordinary people from having their day in court.

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