HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform
Main Menu
Home
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
News
Latest News
HOBB News
Editorials
New Jersey
New Jersey & Texas
Write Letters to the Editors
TRCC in the News
Texas TRCC Scandal
Survey
Fair Use Notice
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Arbitration Impenetrable Roadblock by Business Interest
Saturday, 18 January 2014

When the little guy gets shut out of court
The trend toward mandatory arbitration clauses has been accelerating for years, but attempts to curtail it have run into an impenetrable roadblock from business interests that are understandably eager to stay out of court. Their point might be justified if the arbitration process was fair, transparent and accountable. It is not.

When the little guy gets shut out of court

A pre-dispute agreement put a crack in Italian Colors bistro's case against American Express. Photo: Ian C. Bates, The Chronicle

Those who fail to read a contract's fine print - in other words, most of us - may not realize we are routinely forfeiting our right to a fair grievance process when we get a job, seek medical treatment or buy anything from a cell phone to a car.

It's become standard practice for businesses to require that any consumer or employment disputes be settled in arbitration instead of a court of law.

On the surface, that might seem reasonable. After all, who wants to go through the time, expense and angst of a lawsuit when a grievance could be resolved more efficiently by an independent third party?

But there is plenty of anecdotal evidence that arbitration is anything but fair to the consumer or worker taking on a monied interest. Many of those mandatory-arbitration clauses actually stipulate that the business gets to choose the arbitrator. Consumer and worker advocates complain that private arbitration companies are well aware that the path to attracting cases is to be perceived as friendly to the businesses that retain them.

"It's like the 49ers agreeing that the Seattle Seahawks get to hire all the referees," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a Sacramento advocacy group. "Good luck with that."

The trend toward mandatory arbitration clauses has been accelerating for years, but attempts to curtail it have run into an impenetrable roadblock from business interests that are understandably eager to stay out of court. Their point might be justified if the arbitration process was fair, transparent and accountable. It is not.

As Sen. Al Franken, D-Minn., has observed, the Federal Arbitration Act of 1925 was designed to allow companies of "generally comparable bargaining power" to agree to resolve their disputes outside of the courtroom. But the U.S. Supreme Court has interpreted the law with increasing deference to business, said Franken, who has introduced legislation (S878) that would prohibit pre-dispute mandatory arbitration agreements on employment, consumer, civil rights or antitrust matters.

The Supreme Court ruling in the case of Italian Colors vs. American Express has further heightened concerns that the deck has become stacked against the little guy. Italian Colors, a neighborhood bistro in Oakland's Montclair district, had joined forces with other merchants over the financial giant's insistence that those businesses accept its high-fee knockoff cards as a condition of being able to take the regular American Express cards.

The justices, in a 5-3 ruling, declared that pre-dispute arbitration agreements signed by the individual merchants prevented them from collectively challenging what they regarded as abuse of monopoly leverage. The ruling portends dire consequences for individual consumers who may try to band together in a class-action case involving overcharges, deceitful practices or dangerous or defective products.

It's clear that the Roberts Court offers little hope for any individual or business bound by a mandatory arbitration agreement. Those clauses are anything but voluntary: If you want a job or a service or product, it's take it or leave it. The odds for the Franken bill are decidedly bleak in this Congress.

Perhaps the best near-term hope for workers and consumers would be passage of AB802, by state Assemblyman Bob Wieckowski, D-Fremont, which would expand the amount of data arbitration companies would be required to disclose about their cases and allow lawsuits against those that fail to do so. A recent legislative report noted that half of arbitration companies have not posted any of the data required under current law.

If the process is as fair as the arbitration industry lobby insists, then those companies have nothing to fear from transparency about their processes and outcomes. California legislators should pass AB802.

Leveling the playing field

Legislature

Proposal: AB802 by Assemblyman Bob Wieckowski, D-Fremont

What it would do: Expand the amount of information private arbitration companies must disclose to the public about the process and results of the cases they review in a sortable spreadsheet format - thus giving the public an opportunity to assess patterns in the outcomes. It also would allow lawsuits against companies that did not comply with the law.

Prospects: Iffy, considering the vigorous opposition from business groups. The bill stalled in the Assembly last year after clearing the Judiciary Committee on a 7-2 vote.

Congress

Proposal: Arbitration Fairness Act (S878) by Sen. Al Franken, D-Minn.

What it would do: Prohibit pre-dispute agreements that require arbitration for grievances over employment, consumer, antitrust or civil rights issues. However, it does preserve the right of two parties to choose arbitration after a dispute arises.

Prospects: A long shot in the Senate, a nonstarter in the Republican-controlled House.

Federal enforcement

Proposal: The Consumer Financial Protection Bureau has the authority under the Dodd-Frank financial reform bill to study and regulate the use of forced arbitration clauses in consumer financial products and services.

What it would do: The bureau's options would range from tightening the guidelines to an outright ban.

Prospects: Uncertain. The big question is how aggressive Director Richard Cordray will be in challenging the powerful financial industry.

 http://www.sfgate.com/opinion/editorials/article/When-the-little-guy-gets-shut-out-of-court-5153518.php
 
< Prev   Next >
Search HOBB.org

Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon


Amazon
Barnes & Noble

 Feature
Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
Reckless Endangerman
by
Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Texas Regulates Homebuyers
 
Texas Comptroller Condemns TRCC Builder Protection Agency
TRCC is the punishment phase of homeownership in Texas

HOBB Update Messages

Consumer Affairs Builder Complaints

IS YOUR STATE NEXT?
As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

OUTSTANDING FOX4 REPORT
TRCC from Bad to Worse
Case of the Crooked House

TRCC AN ARRESTING EXPERIENCE
The Pat and Bob Egert Building & TRCC Experience 

Builders Looking for Federal Handouts

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

Drum Major Institute
for Public Policy

Tort Deform
Report Your Arbitration Experience

Homebuilding Texas Style
And the walls came
tumblin' down

 Texas Homebuilder
Bob Perry Political Contributions

  The Agency Bob Perry Built
 TRCC Connection News
Tort Reform

NPR Interview - Perry's
Political influence movement.
Click to listen 

REWARD
MOST WANTED

ARIZONA REGISTRAR OF CONTRACTORS
Have you seen any of these individuals

 Feature: Mother Jones Magazine
Are you Next?
People Magazine - Jordan Fogal fights back
Because of construction defects Jordan’s Tremont Home is uninhabitable
http://www.tremonthomehorrors.com/
You could be the next victim
Interview with Award Winning Author Jordan Fogal

Special Money Report
Big Money and Shoddy Construction:Texas Home Buyers Left Out in the Cold
Read More
Read Report: Big Money…
Home Builder Money Source of Influence

Letters to the Editor
Write your letters to the Editor

Homeowner Websites

top of page

© 2024 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.