purely informational matter, however, it is worth noting that there are bills pending in both the House and the Sen- ate that would ban pre-dispute binding mandatory arbitration of consumer, employment, medical, securities, and franchise cases. S. 1782, introduced by Sen. Russell Feingold (D-Wis.), and H.R. 3010, introduced by Rep. Hank Johnson (D-Ga), are strongly supported by a va- riety of consumer, civil rights and trial lawyer organizations, and are strongly opposed by business groups such as the Chamber of Commerce and the American Bankers Association. At the time of this writing, the only member of the Maryland Congressional or Sen- ate delegations to co-sponsor either bill is Rep. Elijah Cummings. While it is hard to predict how any
piece of legislation may fare, it is worth noting that in the last several years the Congress has twice carved out categories of claims from the scope of the Federal Arbitration Act. Last fall, Congress made it a misdemeanor for a lender to put an arbitration clause into many loan agree- ments with members of the military or their dependent family members.16 Advocates for consumers have asked how mandatory arbitration could be so unfair as to constitute a crime when it is imposed upon a member of the military, yet can be fair and proper when imposed on other consumers. Also, in 2002, auto- mobile dealerships lobbied strenuously for and won a federal statute that bars car manufacturers from insisting that car dealers arbitrate disputes. 15 U.S.C. § 122 6 (a)(2). The Congress has only protected car dealers, however, and not car-buying consumers. Also, it should be noted that while
the Federal Arbitration Act has been held to preempt a variety of state laws that are aimed at limiting the abuse of mandatory arbitration clauses, some
16 10 U.S.C. § 987 (e)(2)-(4); (f)(1). 17
While states may not ban the use of man- datory arbitration clauses in other areas of the law, courts have repeatedly recognized an exception to the rule of federal preemp- tion for insurance contracts
Fall 2007 Trial Reporter 43
DJG-Trial Reporter Ad 4/1/05 3:45 PM Page 1
states have pursued narrow legislative fixes to address these issues in areas where federal law does not preclude state law. Currently, the District of Columbia Council (which is D.C.’s equivalent of a state legislature) is considering legisla- tion that would (among other things) prohibit the use of mandatory arbitra- tion clauses in insurance contracts,17 would make it an unfair and deceptive trade practice for corporations to em- ploy certain types of particularly abusive arbitration clauses, and would require the private arbitration companies to disclose certain information about the
consumer arbitrations they handle (such as how many times particular arbitrators have handled cases involving particular
18
The disclosure provisions in the D.C. legislation are modeled in large part upon a similar requirement in California. Cali- fornia Code of Civil Procedure § 1281.96 requires private arbitration companies to disclose important basic information about “consumer arbitrations” that the compa- nies handle. This information includes the number of cases that the company and each of its individual arbitrators has handled for various corporations, the disposition of those cases, and the total costs imposed on consumers in those cases.
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60