Corporations Becoming Unreachable

Over the weekend the New York Times published a large, alarming report by Jessica Silver-Greenberg and Michael Corkery about the increasingly successful use of arbitration requirements by corporations to avoid litigation and force those they have allegedly injured into an arena that wildly favors their own point of view. These requirements amount to a privatization of justice in which the mechanisms are (in some cases, at least) largely created and controlled by one of the parties.

In conjunction with the threats to class action lawsuits Gilad Edelman wrote about here on Friday, we are rapidly approaching the situation that Lina Khan warned of in the June/July/August 2014 issue of the Washington Monthly:

By enabling companies to keep their wrongdoing secret, arbitration chokes off information vital to the public. Consider the long course of anti-tobacco company litigation and how it ultimately affected policy. Individual plaintiffs filed over 800 suits against tobacco companies between 1954 and 1994, bringing reams of internal documents into the public domain. Although the companies overwhelmingly prevailed in the private actions, the information the suits unsealed eventually emboldened forty-six states to file their own cases, culminating in a $206 billion settlement that also imposed sweeping changes across the industry.

If people harmed by tobacco companies had been forced to arbitrate their cases, there’s a good chance the public today wouldn’t know how tobacco companies maneuvered to make cigarettes more addictive and to hide their lethal health effects. More recently, details on how Bank of America, JP Morgan, and other financial institutions wrongfully seized people’s homes in the wake of the subprime mortgage bust also emerged out of a case brought by a private lawyer.

Legislation has been introduced to deal with arbitration abuses, but so long as Republicans control Congress, it’s not going anywhere. It’s another example of how conservative majorities on the Supreme Court and in the legislative branch have worked together to built bullet-proof protections for privilege.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.