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Binding Arbitration Archives
Tuesday, 06 December 2005

Archived Binding Arbitration Information

Aug 14 2002 The arbitration agreement in the Goodwinís homeowners insurance policy left them homeless and financially devastated. 

On April 26, 2001 an 18-wheeler ran off of I-30 and crashed into our home when its driver had a heart attack. We had lived in our new home for only one day when the accident occurred, which rendered it uninhabitable. Ý
The truck driverís insurance refused to pay for the repairs to our home claiming that the driverís heart attack was an ëact of God,í and therefore, not covered. 

Aug 12 2002 Thanks to Texas Watch at www.texaswatch.org  for providing this information. Two Texas Legislative Committees are currently studying the effects of arbitration.  Go to http://www.texaswatch.org/ to send an email to the Committee Chairmen asking them to prevent companies from limiting consumerÇs rights through arbitration agreements.

Aug 12 2002 From Texas Watch: You may have unknowingly waived your constitutional right to a trial by jury when you purchased you new home, used your credit card or made a long-distance phone call.Ý Today, mandatory arbitration agreements are found in almost all consumer contracts, and they are successfully being used by big corporations to block access to courts by consumers who have been treated unfairly.Ý Go to www.texaswatch.org to learn more about arbitration and its pitfalls for consumers.Ý 

Aug 3 2002 Consumers say arbitration means quick frustration  By Adolfo Pesquera  Express-News Business Writer. Consumers also have complaints about the high cost of an arbitration. Arbitration cases where damage claims exceed $75,000 typically cost consumers $6,000 to $20,000 more than trying the same case in court, say spokesmen for Public Citizen and the Association for American Retired Persons.

July 30 2002 There's no way to arbitrate this issue Critics, firms at odds on policy By Caroline E. Mayer The Washington Post. Arbitrators can limit an aggrieved individual's access to a company's documents, thus possibly reducing support for the complaint. Arbitrations are decided in private. Decisions are kept confidential, so consumers don't necessarily learn what the arbitrator based a decision on. And many consumer agreements call for the arbitration firm to be chosen by the company being complained about.

Jul 14 2002 No Suits Allowed  Increasingly, Arbitration Is the Only Recourse   By Caroline E. Mayer Washington Post Staff Writer. ) As an arbitrator, you're going to get work as long as parties choose to use you, and if this is your career or it makes up a good part of your practice, then if you render a decision that is unpopular" with parties that frequently use arbitration, they "may not choose to use you again."…The homeowner is convinced she won't get a fair hearing.

Jul 8 2002 "Leaky Weekleys"  Moldy 'Lemon' Homes Denied Day In Court Weekley Boys Privatize the 'Justice' System.  "A major developer of this privatized ìjusticeî is David Weekley Homes, both in its own right and through brother Richard Weekleyís Texans for Lawsuit Reform (TLR). Since 1997, TLRís huge PAC has spent $2.6 million on all three branches of Texas government (see table). "

Jul 1 2002 A NEW THREAT TO CIVIL JUSTICE The Assault on Arbitration by Texans for Lawsuit Reform (President Richard Weekley, Texas homebuilder David Weekley's brother)  "Another bill, S.B. 1706, would have prohibited the use of pre-dispute binding arbitration agreements in many contracts, such as employment contracts, and would have imposed new restrictions on other arbitrations. The bill, opposed by TLR, failed to pass."

NOTE: S.B. 1706 was specifically for contracts that mandated binding arbitration without disclosing the high cost, and possible abuse, such as the contract used by David Weekley. 

Jun 30 2002 The Seventh Amendment A 100 Years of Government Encroachment by Newt Gingrich:"Seen historically therefore, the Seventh Amendment, the right to trial by jury in civil cases involving more than $20, is a bulwark of political liberty rather than a procedural amendment. Its purpose was to provide the citizen protection against the government. The Founding Fathers included many lawyers who knew this would make the judicial system slower, more inefficient and more cumbersome. They saw this as a small price to pay for protecting freedom from corrupt or tyrannical judges or from powerful or rich persons with unfair influence."

June 4 2002 The Secrecy of Binding Arbitration. "Arbitration, Other Matters: Each party agrees to keep all Disputes and arbitration proceedings strictly confidential, except for disclosing of information required in the ordinary course of business of the parties or by applicable law or regulation." --Contract Clark Wilson Homes, Inc. Austin Texas.

NOTE: Does this mean no media attention? No protesting? No letters to our Senators and State Reps? Or to the Texas Attorney Generals Office? (as if that would do any good.)

May 28 2002 Arbitration Should Stand on it's Own. by John R. Cobarruvias. Guest Editorial in The Citizen. "Arbitration clauses should be removed from new home contracts as a prerequisite
to purchasing the home. Only when a dispute arises should the owner be given the option of binding arbitration instead of the current court system. Only when the extra fees, rules, procedures, and backgrounds of the arbitrators are openly disclosed to the homeowner can they make a reasonable and educated decision."

"Disclosure of the facts to reach an informed choice will allow binding arbitration to stand on it's own or fall on it's farce."

May 23 2002 Just how biased can an arbitration and arbitrator be? Read Falbaum v. Houston Village Builders Inc submitted to the Texas arbitration hearing May 15. This was a case in Houston. This is well worth reading

May 23 2002 The use of Mandatory Binding Arbitration Clauses in The Woodlands Texas. Can  you buy a new home in The Woodlands without giving up your 7th Amendment Rights to a civil trial if you have a defect in the biggest investment of your life? 

May 23 2002 DR Horton's $10,000 Arbitration Clause. "If buyer does not seek arbitration prior to initiating any legal action, buyer agrees that seller shall be entitled to liquidated damages in the amount of $10,000." 

May 19 2002 Nonprofit group pans arbitration Says system stacked against consumers Associated Press Touted as a cheaper and faster alternative to lawsuits, binding arbitration is expensive for consumers and denies them access to courts, according to a report released last week by the non-profit group Public Citizen. 

May 17 2002  Consumer advocates hammer arbitration  Homeowners from across Texas Rally at the TX State Capitol prior to the Hearings on Arbitration. Hearing Audio Available

May 17 2002 Public should keep right to day in court Editorial Board AUSTIN AMERICAN-STATESMAN Within the United States, however, some in the business community are doing whatever they can to shake themselves free of the judicial system in favor of "binding arbitration" clauses in contracts that automatically send disputes to an arbitrator rather than a courtroom. 

May 16 2002 Who really backs lawsuit abuse campaigns? Citizens Against Lawsuit Abuse (CALA). Shouldnít the name be Corporations Against Lawsuits? (Enough said)

May 16 2002 Home buyers object to clause in sales contracts Texas House panel hears complaints about binding arbitration requirement By David Pasztor AMERICAN-STATESMAN STAFF Home builders are drawing most of the ire in Texas, said Jackson Williams of Public Citizen, because almost all of them are now inserting binding arbitration clauses into their contracts at the suggestion of the Texas Association of Builders. 

May 16 2002 Consumer advocates hammer arbitration  By Adolfo Pesquera  Express-News Business Writer James Evans, a Houston attorney, cited a case where a client's house slid down a hill because of an improper foundation. After his client got nothing, Evans sued the association and arbitrator Stephen Paxson, claiming Paxson, a lawyer for the Greater Houston Builders Association, had lobbied to change the law his client was relying on.

Note: Unknown to most in the audience, Stephen Paxson was the last speaker at the hearing. He helped write an Amicus to the Supreme Court in favor of removing the implied warranty of habitability and good workmanship, as well as an amicus in the Perry Homes v. Atiwiler case (02-98-00106-CV, 33 SW3d 376, 11-02-00)which the Supreme Court refused to hear.

May 15 2002 Texas' mushrooming toxic mold epidemic offers a crash course in the perils of binding arbitration. First, consumers learn that their new dream home is a moldy lemon. Then they discover that arbitration contracts strip their right to a jury trial and force their claims before costly, secretive tribunals that favor builders. The new Lobby Watch profiles a few consumers who bought moldy new houses from arbitration enthusiast David Weekley Homes.

May 14 2002 Private arbitration criticized  Report says court often cheaper; supporters say study is misleading  By MARK CURRIDEN / The Dallas Morning News Fifth U.S. Circuit Court of Appeals Judge Patrick Higginbotham warned at a conference in Dallas two weeks ago that the movement away from the public court system toward private justice is a "dangerous situation with major public policy implications." 

May 14 2002 Arbitration could prove costly for homeowners By JANET ELLIOTT Copyright 2002 Houston Chronicle Austin Bureau According to the report, the filing fee for an $80,000 consumer claim in Cook County, Ill., Circuit Court is $221. The American Arbitration Association, one of several private companies providing arbitration services, charges a filing fee of $1,250. 

May 9 2002 THE CONSUMER PITFALLS OF BINDING ARBITRATION A Report by the Texas Watch Foundation The report raises questions about the quality of justice delivered through binding arbitration between parties of different bargaining levels and documents the uneven playing field binding arbitration offers consumers and citizens seeking justice. 

May 5 2002 TX House Hearing on Arbitration Audio Available 

May 2 2002 Washington Post: Arbitration Often Costly, Study Finds  Group Says Court System Offers Fewer Charges and Lower Fees "This growing corporate maneuver is threatening the rule of law," said Public Citizen President Joan Claybrook. The high fees uncovered by the report "makes it impossible for consumers and employees to vindicate their rights," she said.

May 1 2002 May 1 - Arbitration costs are so high, many victims are unable to pursue complaints, new Public Citizen report reveals  . Arbitration, although widely billed as a low-cost alternative to court, is actually far more expensive for consumers and employees who seek redress for discrimination, fraud and malpractice, a new Public Citizen report reveals. In fact, arbitration costs are so high that many people drop their complaints because they canít afford to pursue them, Public Citizen found.

May 2 2002 Small Claims Court vs Mandatory Binding Arbitration.

Apr 15 2002 AT&T's arbitration system ruled illegal  Reynolds Holding, Chronicle Staff Writer Mandatory arbitration lost substantial ground in the nation's courts again yesterday when a San Francisco federal judge denounced AT&T's private system of resolving disputes as an "illegal and unconscionable" attempt to deprive telephone customers of their legal rights. 

Apr 3 2002 HOBB and homeowners speak at an arbitration hearing in Austin. Audio available now.

Mar 23 2002 The Seventh Amendment: A 100 Years of Government Encroachment By Newt Gingrich Summary:  The right to trial by jury was treasured by the Revolutionary War generation that founded America. British efforts to move cases into courts without juries were seen as major steps toward tyranny. Americans viewed juries as citizen protection against corrupt or tyrannical judges. The purpose of the jury was to ensure that any act of tyranny would be unenforceable in court as the citizens on the jury would simply reject the case. 

Mar 2 2002 HUD on binding arbitration: "the Department precludes binding arbitration as the sole remedy." Page 1 Page 2

Nov 7, 2001 INTERIM STUDY CHARGES -Texas House of Representatives . Interim Studies on mold and binding arbitration.

BUSINESS AND INDUSTRY. Review trends in the use of binding arbitration requirements in consumer agreements, with special attention to transactions in which the consumer has little or no bargaining power.
INSURANCE. Review issues associated with homeowners' insurance coverage of toxic mold and mold related claims. Consider measures that would ensure appropriate coverage and remediation of damage and maintain the viability of the homeowners' insurance market. 

Aug 2, 2001 [ABOT] Insurance carriers hit with fines  Must pay medical bills  By CLAY ROBISON Houston Chronicle Austin Bureau . Perry vetoed the measure at the urging of civil justice reformers and other business groups because it would have removed arbitration as an option for settling health insurance claims. [Mandatory and binding arbitration is NOT an option. It is the ONLY option.]

Texans for Lawsuit Reform, which urged the veto, praised the fines. "Governor Perry promised Texas doctors he would help them with slow paying insurance companies, and he has," said the group's president, Dick Weekley

NOTE: Dick Weekley is the brother of David Weekley. See also July 20, 2001  Perry's veto still a bitter pill for doctors By Gary Susswein American-Statesman Staff. Binding Arbitration clauses rip hearts out of doctors. "Perry said he vetoed the bill because it would have prevented insurers from settling disputes through alternate methods or binding arbitration, would have encouraged frivolous lawsuits and would have driven up the cost of health insurance."

July 19, 2001  Perry's veto still a bitter pill for doctors By Gary Susswein American-Statesman Staff. Binding Arbitration clauses rip hearts out of doctors. "Perry said he vetoed the bill because it would have prevented insurers from settling disputes through alternate methods or binding arbitration, would have encouraged frivolous lawsuits and would have driven up the cost of health insurance."

July 19, 2001 Doctors feel the wrath of Texans for Lawsuit Reform on binding arbitration clauses.Viewpoints Houston Chronicle. One of the most notorious take-it-or-leave-it clauses is a requirement that doctors waive their legal rights under state law (and, by extension, patients' rights) by agreeing that all disputes be sent to mandatory, binding arbitration, which is expensive, cumbersome and lengthy. 

NOTE: TLR is headed by Richard Weekley, brother of David Weekley, Texas Homebuilder.The TLR is a so called "grassroots" organizations with the consumer in mind. See: Redefining reform  Big business proponents contrive some of the worst bills of the 74th session  By Molly Ivins "Say a builder has been using some cheesy materials that fall apart after 10 years. No responsibility falls to the builder--you have to sue the manufacturer"

July 9, 2001 High court's term [Texas Supreme Court] ends amid exodus of justices  Precedents vulnerable to shifts in membership  By MARY FLOOD  Houston Chronicle "Most arbitrations cost about $2,000 to $3,000 just to get them started, and if arbitration is always compulsory, this pretty much puts consumers in a hole," said Rusty McMains, a Corpus Christi state appellate specialist. 

June 8, 2001 Texas Supreme Court Screws Homeowners Again and Upholds Binding Arbitration. This is just one in two punch knockout to the consumers. The next will be when they show their loyalty to the Texas Homebuilders and relieve them of the implied warranty of good workmanship and habitability. "The Biggest Investment of Your Life in Texas" now has the "Least Amount of Consumer Protection". Why would anyone buy a new house?

June 8, 2001 Court ruling upholds binding arbitration. Consumers can be barred from lawsuits  Associated Press AUSTIN -- Consumers who complain about defective products can be forced into binding arbitration and barred from suing the manufacturer, the Texas Supreme Court ruled on Thursday. 

"Arbitration provides consumers with an immediate and an inexpensive place to go," said Cami Boyd, a lawyer representing two Texas-based mobile-hine"

May 29, 2001 Getting It Built Copping An Attitude: War of Words By Matthew Power Builder Online. 

"Brian Binash, executive vice president of Emerald Homes in The Woodlands, Texas, tells any client who refuses to sign his company's arbitration clause to go elsewhere. He says they will continue the practice, even if (and when) the roaring economy slows down. "

Mar 3, 2000 Added to Binding Arbitration: Arbitration Rulings Called One Sided. By Caroline E. Mayer Washington Post Staff Writer   Like many banks, car dealers and retailers, First USA N.A., the nation's second-largest issuer of credit cards, no longer permits its customers to sue it in court. Instead, any disputes must be resolved through arbitration by a firm chosen by First USA.

Feb 26, 2000 Added to Builders in the News: Supreme Court 2000: Torts. Arbitration clauses need not bar suits. Patricia Seifert and her husband, Ernest, contracted with U.S. Home to build a house. The purchase and sale contract said that if any dispute arose, it would be settled by mediation ó in which a referee tries to work out a deal acceptable to both parties ó or, if that failed, binding arbitration, in which one or more arbitrators decides on a solution. After the Seiferts moved in, the air- conditioning system sucked into the home deadly carbon monoxide emissions from the coupleís car, which had been left running in the garage. Ernest Seifert died, and his wife sued in 1996, contending her husbandís death was a result of U.S. Homeís negligence.

Feb 4, 2000Added to Binding Arbitration: Consumers losing right to sue Buy an item off the popular eBay auction Web site, and you've just given away your right to sue. If you have a beef with eBay, you'll go before a private arbitrator instead of a judge in court. The Web giant has even picked the place: San Jose, eBay's home, but not exactly convenient to the vast majority of consumers. 

Feb 4, 2000 Added to Binding Arbitration: "Americans want arbitration." By Roger Haydock "Consumers and businesses agree: They want an affordable, efficient and fair way to resolve their disputes. They want arbitration." [I thought "What ....person....would write such stuff?] "Roger Haydock is executive director of the Institute for Advanced Dispute Resolution and a visiting professor at the University of San Diego Law School." There is the answer!

Jan 10, 2000 MCI Settles Challenge to Arbitration Rule By Caroline E. Mayer Washington Post Staff Writer Friday, December 24, 1999; Page E02 MCI WorldCom Inc. has settled a challenge to its practice that bars small businesses from taking billing disputes to court. However, officials at the Federal Communications Commission indicated yesterday that the agency may still review MCI's controversial arbitration requirements because they may hurt consumers.

Jan 8, 2000 Letter from Senator Hollings of South Carolina to Jim Blackstone in support of HR 2258 The Consumer Fairness Act.

Dec 14, 1999MCI's fine art of fine print. By Caroline e. Meyer, The Washinton Post. Another example of hiding arbitration clauses in contracts. 

August 11, 1999Contract's Fine Print Could Take Away Your Right to Sue
RALEIGH (WRAL) -- We have heard it over and over again; "Before you sign a contract, read the fine print." Now, there is a serious, new reason to do that. 

Sept 30, 1999: Stripped of legal rights  by Richard Coe  10-19-1998  Criminals get a right to trial by jury. But if you buy a car, sign a mortgage, buy health insurance or get an exterminator contract, you probably donít get that same right.

Sept 28, 1999: Consummate Consumer On the Hill, Going Nowhere By Don Oldenburg Washington Post Staff Writer Wednesday, September 29, 1999. But some consumer advocates want to rally around this proposal to prohibit "waive your right to sue" clauses that increasingly are inserted, stealth-like, into everyday marketplace transactions, from purchase agreements to service contracts.

Sept 28, 1999: Arbitration is replacing lawsuits Clauses protect many businesses from court fights By Joel Campbell Deseret News associate business editor. Consumers with disputes with everyone from their employer to their auto insurer may find it increasingly difficult to settle their differences in court.

Sept 20, 1999: Card customers being pressed to give up their right to sue  By Pat Curry  Is using plastic money worth giving up your right to sue your credit card issuer if you have a dispute with them? "Linda Sherry, editorial director for Consumer Action, a national consumer advocacy group, says that while her organization supports alternative dispute resolution as helpful and less costly than litigation, they are "totally opposed" to binding arbitration."

Sept 17, 1999: No suits for you  Mad at a firm? Arbitration could be your only recourse  BY MARGARET MANNIX , US News 6/7/99 "As an enforcer of consumer protection laws, I am tremendously alarmed about the  frequency of [mandatory arbitration clauses] and the often disguised or inconspicuous way they are presented," says Connecticut  Attorney General Richard Blumenthal, adding that the consumer is in a Catch  22. "He is blocked from going to court by the arbitration clause and prevented from arbitrating by high upfront expenses." 

Sept 17, 1999: Binding Arbitration And Its Impact On Current Litigation by Stevann S. Wilson  and Maynard Green. A very DETAILED article on binding arbitration in Texas. (Stevann Wilson is a full-time mediator and arbitrator. She has practiced as a trial  attorney for more than 20 years and as an attorney-mediator and arbitrator for the past 7 years.)

Sept 17, 1999: FORCED INTO ARBITRATION? NOT  ANY MORE More employees are saying it's unfair--and many judges agree 

Sept 16, 1999: Posted the Council of Better Business Bureaus Policy for Voluntary Consumer/Business Arbitration  in Contractual Commitments

Sept 10, 1999: House Bill 2258 "The consumer protection bill of 1999" sponsored by Representative Guitteriez. This will will make the use of binding arbitration clauses in consumer contracts illegal. HOBB supports this bill.

Sept 10, 1999: Home Owners For Better Building Testifies Before The Texas State Interim Committee On State Affairs. "ARBITRATION DEADLY FOR THE CONSUMER"

Aug 29, 1999: Featured in: Read the fine print posted 08/29/99  By Michael Pollick  The Herald Tribune: Read about how many of the homebuilders in the US are using binding arbitration clauses in new home contracts."Janet Ahmad, president of a San Antonio, Texas, group called Home Owners for Better Building, said arbitration might not be as inexpensive for the homeowner as the builders like to make it sound. The going rate for attorney representation prior to and at an arbitration is $2,000, Ahmad said. By agreeing to arbitration, homeowners give up the

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