Big Business Wants You Out of the Courtroom

One of Cranky Greg's favorite reads is the editorial page of the Wall Street Journal. But today, Cranky Greg damn near fell out his chair laughing at the bullshit that was written by an attorney, Christine Varney, a partner at Hogan and Hartson LLP.  (Hogan and Hartson is a big-ass law firm that represents Big Business.)

Ms. Varney wrote a piece entitled:  Arbitration Works Better Than Lawsuits.

In her article, Ms. Varney complains about The Arbitration Fairness Act of 2007, which is currently being studied by Congress.  According to the Congressional Research Service, the proposed law does the following:

Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of: (1) an employment, consumer, or franchise dispute, or (2) a dispute arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.

Declares, further, that the validity or enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.

Ms Varney makes many ridiculous claims in her attack on this bill, which is merely designed to forbid most mandatory arbitration "agreements" and give consumers access to the courts.

The first thing she does is invoke the progeny of Satan himself:  Plaintiffs' Lawyers!  Horrors!

She says that access to the courts is "a bad deal for consumers."  She says that the bill is based on the wrong assumption that litigation benefits consumers while arbitration does not.  She argues that arbitration is long-established, successful method for resolving disputes without having to go to court.  She says it can help consumers resolve disputes with Big Business without the high costs and legal fees of a full-blown lawsuit.

That is simply ridiculous.  First of all, arbitration may be a long-established method of resolving cases, but so are courts.  Most cases filed in court do not go to trial.  Most are settled at mediation or are dismissed.  Furthermore, courts have been around a lot longer than arbitration procedures.  Concerning the delay and expense of fighting Big Business, that is usually the fault of Big Business itself!  Most of them stonewall discovery, file motions after motions after motions, and employ other delaying tactics designed to wear-out the plaintiff, both emotionally and financially.  The guy who gets screwed by the credit card company is not the one creating all the expense and delays in court.

Ms. Varney then makes the preposterous claim that arbitration actually helps level the playing field between consumers and big businesses!!  Why does Big Business support arbitration, if it levels the playing field between it and consumers?  Because Big Business knows arbitration takes the fact-finding out of the purview of citizens and places it into the hands of arbitrators bought and paid for by Big Business.  It is just silly to think that Big Business wants to level the playing field for the consumer.  If that's the case, why all the fine print in all of the ridiculously long agreements with credit cards, cell phones and damn near everything else?  That language is not there to protect you, Mr. and Ms. Consumer!  Big Business doesn't pay its attorneys to help the consumer.  Trust old Cranky Greg on that one!

Ms. Varney says that without arbitration, consumers will have no redress because lawyers won't take their cases because there is not enough money.  Then why does Ms. Varney make such a production at the start of her article about those mean old plaintiffs' attorneys who don't like mandatory arbitration because it keeps their "big dollar disputes" out of the courtroom?

She then goes on to say that arbitration is good for consumers, and she admits that Big Business often pays for all of the costs associated with arbitration.  Duh!  Of course they do!  They pay for the arbitrators!  What are the arbitrators going to do?  Rule in favor of consumers?

Don't be naive.  Most arbitrators are bought and paid for by Big Business.  Don't kid yourself.

Ms. Varney then cites studies that she says prove that consumers are the winners with mandatory arbitration.  The first study she cites is from....guess who?.....The American Arbitration Association!!!

Cranky Greg is not kidding!  She actually refers to that "study" conducted by an association that depends on mandatory arbitration for its very own survival!!!

Does anyone really think the alleged "study" is accurate?  And impartial?

She then refers to another study by the National Workrights Instutute which, she says, showed that consumers prevailed in 63% of cases brought in arbitration, as opposed to only 43% of cases filed in court.  Cranky Greg looked to see if this is accurate, and found that the National Workrights Institute says arbitration agreements should be OPTIONAL and not mandatory.  Varney argues for mandatory arbitration.  Ms. Varney, obviously, doesn't let the facts get in the way of her analysis.

Remember, all this bill is designed to do is to prohibit most mandatory arbitration clauses: it does not say that parties cannot agree on their own to submit their disputes to arbitration.

Cranky Greg actually likes arbitration, but detests mandatory arbitration.  If arbitration is such a good deal for the consumer, then there needn't be any mandatory arbitration clauses since consumers would be flocking to arbitrate.  But that is simply not the case.

Ms. Varney hopes to confuse the reader and to distract the reader from the real purpose of the bill - which is to prevent Big Business from locking consumers out of the courthouse and resolving their disputes in a system that is controlled by Big Business.

Ms. Varney should be ashamed of herself for presuming that her readers are stupid and for twisting the facts.  That is despicable behavior from an attorney who should know better.

Comments

[Mr Joe]

I agree!! I wonder how long it will take for you to get a mean letter from that big-ass law firm.

[Cindy]

When consumers are educated on what private, industry-run arbitration is really about--ensuring corporate victory--they will find articles like Varney's an insult to their intelligence. The effort that the arbitration and business community is putting forth to try and defeat the Arbitration Fairness Act indicates they have real fear that consumers ARE getting educated. Crooked businesses LOVE ignorant consumers.

[Jordan Fogal]

The Eyes of Texas Have Been Blind,
but now they see....

Here in Texas lies one of the biggest ( everything is bigger here you know),the culprit of the economic crisis. Texas is where this housing debacle began. Mr. Bob Perry of Perry Homes, so powerful he can sway presidential elections and buy state agencies and "donate" to the Governor who then appoints Mr. Perry's in house council to the TRCC.( Texas Residential Construction Commission). Then this infectious disease he created called " right to cure" spread across the nation and 39 other states followed. Right to cure, Which simply means you have to go though a maze and jump though hoops before you can sue or go to arbitration. (Neither avenue leads to justice especially in Texas).
The builder can do anything he wants with you. He can sue you. He can force you into arbitration. He does not have to abide by the TRCC or the law These laws only apply to the consumer. Builders circumvent state laws on a whim and are arrogant about it because they are in the "Perry Zone". Most multi million dollar homebuilders' build to the lowest standards, with the cheapest materials. Then the good builders do too. If they don't they cannot compete and are forced out of business.The builders incerted arbitration clauses that take away the homeowners seventh amendment rights. And in arbitration the repeat customer with the money wins.
.If roofs start to leak, and foundations shift, and mold grows, the homeowner is forced into foreclosure. Major defects, not leaky faucets. Defects the homeowners' insurance denies. Defects so outrageous the homes; sometimes are uninhabitable. So foreclosure becomes the only alternative.
Then those in power hide us under the sub primes.
We are not sub primes, we are sub standard construction. There are millions of us.
.It is said Texas leads the way. This time Texas has led this county into an economic disaster. The people in the great state of Texas need to wake up or it is back to the Alamo for us all.
Jordan Fogal
Houston, Texas
jfogal281@aol.com
281-734-4143
For more on these topics google my name or go to HADD.org or HOBB.com

[Renee]

Cranky Greg is SPOT ON regarding arbitration. I'm with ya... if it is so great for consumers, why would business make it BINDING? I'm so sick of plaintiff's attorneys being demonized. If it wasn't for mine, I'd be sleeping under a bridge, thanks to mandatory binding arbitration. nuf said

[Steve]

We are lawyers with 45 years of collective experience representing clients who are victims of corporate lies, deceit, and fraud.

For many years, mandatory arbitration clauses in employment and consumer agreements have been used to screw the victims of dishonest dealing by denying them the single greatest source of justice under our system - the jury trial. The corporate thieves and cheats want to stack the deck in every case and get the victim in front of a biased arbitrator with no right of appeal.

If we lose the right to a jury trial, there will be no obstacle to the people being "nickle and dimed" to death by corporate cheats. Understand, folks, that these "giants of industry," represented by big-business lawyers like Ms. Varney, sit in board meetings thinking up new and totally dishonest ways to take your last dollar.

E-mail your Congressman today to support the
Arbitration Fairness Act!

[Steve]

We are lawyers with 45 years of collective experience representing clients who are victims of corporate lies, deceit, and fraud.

For many years, mandatory arbitration clauses in employment and consumer agreements have been used to screw the victims of dishonest dealing by denying them the single greatest source of justice under our system - the jury trial. The corporate thieves and cheats want to stack the deck in every case and get the victim in front of a biased arbitrator with no right of appeal.

If we lose the right to a jury trial, there will be no obstacle to the people being "nickle and dimed" to death by corporate cheats. Understand, folks, that these "giants of industry," represented by big-business lawyers like Ms. Varney, sit in board meetings thinking up new and totally dishonest ways to take your last dollar.

E-mail your Congressman today to support the
Arbitration Fairness Act!

[Charlie R]

I agree completely with Cranky Greg's comments. The Wall Street Journal should be more responsible. Why don't they run Cranky Greg's retort?

[michael walsh]

"Ms. Varney then makes the preposterous claim that arbitration actually helps level the playing field between consumers and big businesses!! Why does Big Business support arbitration, if it levels the playing field between it and consumers?"

Pure gold. Tell it like it is, Greg.

[Sweet Home Alabama]

Excellent!!!!

[Ricky]

She then refers to another study by the National Workrights Instutute which, she says, showed that consumers prevailed in 63% of cases brought in arbitration, as opposed to only 43% of cases filed in court. Cranky Greg looked to see if this is accurate, and found that the National Workrights Institute says arbitration agreements should be OPTIONAL and not mandatory. Varney argues for mandatory arbitration. Ms. Varney, obviously, doesnt let the facts get in the way of her analysis.

That doesnt change the fact that the study she pointed to is valid, and the numbers are correct. I am against binding arbitration as much as the next guy, but you are completely trying to side step that point.