Class Action Arbitration

CLASS ACTION ARBITRATION….Sam Heldman points out today that while everyone was talking about the affirmative action cases handed down yesterday, there was a lot less attention paid to another Supreme Court decision that protected the right to bring a class action suit even if a case is being decided by arbitration:

….more and more, in consumer-company or employee-employer relationships, we see arbitration “agreements” being slipped in amongst the fine print, such that you “agree” that you will arbitrate rather than sue if you ever have a claim against the company.

Companies also like to claim that, in arbitration, there’s no such thing as a class action — that each consumer, or employee, must fight his or her fight alone, shouldering all the costs. Companies take this stance, naturally, because they don’t want class actions — they want most of their behavior to go unchallenged by the people whom it affects. But Bazzle is good news for consumers and employees in this regard: the Court seemingly rejected the theory that there is something ipso facto impossible or improper about having an arbitrator certify a class and grant relief to the class.

Sam also talks in passing about a growing trend in which companies “shove arbitration ‘agreements’ down consumers’ and employees’ throats that explicitly forbid class arbitration.” I confess to ambivalent feelings about enforced arbitration generally, since I think it’s bad public policy to allow companies to unilaterally opt out of the justice system simply because they think they might get a better (or cheaper) deal elsewhere. There are some good things to be said about arbitration, but it ought to be voluntary on both sides, not used as a bludgeon by a stronger party who wants to avoid the possibility of ever being held accountable for their actions in the public courts.

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