U.S Supreme Court Destroys Consumer Rights

I have yet to use this blog to post anything vaguely political or off - topic, but today I feel I need to act.

A recent Supreme Court decision  is so incredibly wrong and dangerous to consumers I believe that people need to speak out. Only a new law enacted by congress can protect you.

The ruling is in the case Buckeye Check Cashing v. Cardegna et. al. The Supreme Court ruled that the arbitration clause in a contract - even if the rest of the contract was induced by fraud and completely illegal is upholdable. AND, they ruled that this applies not only to federal courts but to state courts.

"So What?" You ask.

1. Companies are now 100% free to commit fraud or any other odious act, and then they can force a consumer into arbitration.
2. Arbitration is notoriously more difficult than litigation, more expensive and less accessible to consumers who may not have the money to fight things out.
3. Arbitration is secret, where litigation is public record. One of the things that keeps companies honest is the fact that if they are sued the proceedings come out to the light of public scrutiny. Companies are now free to act even illegally without a word being allowed out in public.
4. The Supreme court completely squashed the ability for the states to enforce their own contract laws. They said that the Federal Arbitration laws apply to state courts. This is entirely unconstitutional.

The supreme court of Montana was recently forced to uphold this ruling, which it sis with a significant amount of protest:

Justice James C. Nelson said in a concurring opinion, "To say that my concurrence is without enthusiasm, however . . . grossly overstates my exuberance for our decision. Unfortunately, our ability to come to any other conclusion is cabined by the United States Supreme Court's recent decision in Buckeye."

My frustration with our inability to reach a legally correct, fair and just result in this case stems directly from the fact that the United States Supreme Court has, from the beginning, improperly conflated the Federal Arbitration Act (FAA) into something which Congress never intended it to be," he said.

"Indeed, under the High Court's jurisprudence, the FAA and pre-dispute arbitration clauses in contracts of adhesion have now become little more than instruments of economic Darwinism by which predatory lenders-such as Beneficial and Buckeye-and other large corporations victimize main-street businesses, the unsophisticated, the elderly, the poor, and what is left of the middle class," he said.

To recap from the legal-eze:

Buckeye Check Cashing v. Cardegna et. al.

• Is legally incorrect
• Is unfair and unjust
• Oversteps the way Congress meant the Federal Arbitration Act to work
• Will lead to victimization of small businesses, the middle class, the poor, and the unsophisticated (and how many of have a degree in law?)

As a small business owner, and someone whose clients are small business owners - this SCOTUS ruling scares the living hell out of me.

If you have agreements with any large businesses, including cell phone providers, banks, lenders, vendors - you probably have an arbitration clause in your agreement. You probably didn't even read it. If you do, you are now almost totally screwed if these large businesses ever decide to screw you over or do something illegal. They can stop you cold from suing them, even if you are entitled, and even if they used fraud to get you to sign the agreement.

Notice to all potential perpetrators of fraud:  The Supreme Court has said that your victims are pretty much fair game a long as you get them to sign something with an arbitration clause in it.

What you must do right Now!

1. Read every agreement you sign and watch out for anything that mentions arbitration in them. Your best bet is to consult a lawyer before signing any agreement.
2. Educate your friends and family about the repercussions of this incredibly dangerous Supreme Court decision. Most people don't know what being forced into arbitration means, and how they are signing away their recourse should things go wrong.
3. You MUST write your Congressional representatives and get them to act. The only thing that might take the teeth out of this decision is an act of congress. To write you congressperson just click here. To contact your senators click here.

Get outraged because, unless you have about a billion dollars in the bank, the Supreme Court has just declared you an open target.

J D Moore - Marketing Comet.

Comments

[Wren Hunt]

"Arbitration is notoriously more difficult than litigation, more expensive and less accessible to consumers who may not have the money to fight things out."

I think you have this backwards - is what you said above actually your intent?

[J D Moore]

Nope, what I said stands. here are a few factoids about arbitration:

Critics say arbitration can mean high filing fees, unqualified arbitrators, lost legal rights, limited awards and no appeals. Filing a case in state Superior Court costs from $90 to $185, depending on the amount claimed. Filing fees for arbitration can cost thousands of dollars, depending on the case and the arbitration firm. Fees for hearing rooms and the arbitrator's time can run tens of thousands of dollars more and discourage individuals from pursuing a case.

In court, Judges or other judicial officers hear cases. Many arbitrators are former judges, but some are not even lawyers. Arbitrators are rarely required to follow the law and are regulated in only two states. Judges are usually assigned according to a rotation or by a presiding judge. Parties select arbitrators, usually from a list compiled by an arbitration firm. Firms offer parties various methods of striking names from the list and reducing them to one. If the parties cannot agree, the firm may designate an arbitrator. .

In courts, the right to a fair process is protected by legal safeguards such as discovery, testimony and evidence rules. Court rules do not apply to arbitration, meaning the arbitrator - sometimes guided by an arbitration agreement or the rules of an arbitration firm - controls the process.

Arbitration awards are generally lower than in court, and arbitration agreements sometimes limit the type of damages an individual can recover.

Judges' decisions are public record and subject to appeal. Most decisions by arbitrators are confidential. They cannot be appealed and are subject to judicial review only in narrow circumstances.

Arbitration is undeniably pro big business and anti consumer and small business.