Tag Archives: SCOTUS

SCOTUS and the Mandatory Arbitration Revolution: Part 4/7 (Supposed Advantages of Arbitration)

Legal Philosophy, Social and Political Philosophy August 6, 2020 Leave a comment

Advantages of Mandatory Arbitration

Mandatory arbitration has often been praised as an effective decision to help eliminate much of the bloat occurring within the U.S. state and federal legal systems. According to its advocates, mandatory arbitration has several advantages over litigation which include (1) duration of time, (2) overall costs, (3) flexibility, (4) privacy/confidentiality, and (5) finality. The proclaimed successes of arbitration that have been derived from these advantages make it ultimately worth preserving and protecting. Advocates are thus ultimately supportive of the trend of Supreme Court rulings on arbitration.1

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SCOTUS and the Mandatory Arbitration Revolution: Part 3/7 (Current Legal Precedents)

Legal Philosophy, Social and Political Philosophy August 3, 2020 Leave a comment

The Supreme Court’s Current Interpretation of the FAA

From the year 2000 until 2018, there have been over 10 Supreme Court cases involving arbitration, many of which included extended discussion about mandatory arbitration. In order to better understand the evolution of the Supreme Court’s increasingly broad interpretation of the FAA, and its expanded use of mandatory arbitration, it will help to have a brief summary of the most recently decided cases and what they mean for consumers/employees. These Supreme Court cases are AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), American Exp. Co. v. Italian Colors Restaurant, 667 F. 3d 204 (2013), and DirecTV v. Imburgia, 577 U.S. ___ (2015).

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SCOTUS and the Mandatory Arbitration Revolution: Part 2/7 (Historical Context)

Legal Philosophy, Social and Political Philosophy July 31, 2020 Leave a comment

A Brief History of (American) Arbitration

European Roots and Colonial Growth

Legal scholar Lauren G. Barnes points out that arbitration initially developed among members of the merchant class during the medieval period in Europe. Arbitration then took place almost solely among members of the merchant class. Considering that merchants were often traveling between fairs, in different towns and regions no less, in order to conduct business affairs with one another, they needed an efficient way to resolve disputes that arose from their recurring economic transactions. This dispute resolution process needed to do its job quickly and “in accordance with customary norms that merchants respected.”1 As a result, an adversarial court system in which the business relationship between the two parties could be severely, even permanently, damaged would not suffice for this purpose. Rather, a non-legal, yet still judiciously warranted system would be preferable.

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SCOTUS and the Mandatory Arbitration Revolution: Part 1/7 (Intro)

Legal Philosophy, Social and Political Philosophy July 28, 2020 Leave a comment

Though we may not be entirely aware of it, a tremendous amount of our economic and financial transactions as consumers and/or employees, especially with regard to any disputes about those goods/services/employment, cannot be litigated in a court of law if we have willingly signed their contracts and agreed to the terms/conditions.1 This legal inability has been created by the passage and continued enforcement of the Federal Arbitration Act (FAA) of 1925. Since its inception, many potential disputes involving those aforementioned transactions and relationships have been governed by mandatory arbitration.2

So just how widespread is mandatory arbitration? Legal scholar Jeremy Senderowicz remarks that mandatory arbitration clauses (MACs) and class action bans (CABs), along with their variations, are now standardly included in “banking, insurance, health care, and communication service contracts, as well as arrangements for the sale or lease of consumer goods.”3 Another scholar adds to that same list contracts involving “housing, national parks, patents, disaster relief, and telecommunications.”4 Yet MACs/CABs are not only applicable to consumers. Once we involve the number of businesses who use MACs/CABs to regulate relationships with their own employees, that nearly ubiquitous reach grows much more. For instance, one published academic study from 2008 asserts that during the year “a quarter or more of all non-union employees in the US,” more than 30 million employees, had agreed to mandatory arbitration in some form or another.5 Given that the use of mandatory arbitration has been increasing steadily over time, it is safe to say that this number of employees directly affected by MACs/CABs in 2018 is even higher.6

Yet, this ubiquity is not the only reason that the prevalence of MACs/CABs is remarkable. What’s more is that most of the fundamental changes that have occurred within the realm of arbitration and its relationship with the Federal Arbitration Act (FAA)7 have taken place only over the past 30 or so years. From about 1980 until 2015, there were 25 Supreme Court cases that involved arbitration, all of which expanded the scope and degree of the FAA’s jurisdiction and which have, collectively, enforced the use of MACs/CABs in various circumstances.

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