Law Commons^™

The Cfpb Proposed Arbitration Ban, The Rule, The Data, And Some Considerations For Change, Ramona L. Lampley

Faculty Articles

Predispute consumer arbitration has sparked energetic debate and sharply divides the utility of the class action versus the utility of individual arbitration. Thus far, the U.S. Supreme Court’s jurisprudence has given a “thumbs up” approach to predispute consumer arbitration waivers, which almost always include a class waiver agreement. Congress showed little interest in amending the Federal Arbitration Act (“FAA”), even for consumer cases. It seems that consumer arbitration was the “wild west” of the law, in that it was largely unregulated and could direct claims to the black hole of private dispute resolution. In May 2016, the Consumer Financial Protection …

Disrupting Work Law: Arbitration In The Gig Economy, Charlotte Garden

Faculty Articles

No abstract provided.

The Cfpb Anti-Arbitration Proposal: Let’S Just Give Arbitration A Chance, Ramona L. Lampley

Faculty Articles

In October 2015, the Consumer Financial Protection Bureau (“CFPB”) announced that it would propose a rule banning class action waivers in arbitration agreements for consumer financial services products. This proclamation came to fruition in May 2016 when the CFPB proposed 12 C.F.R. part 1040 and sought public comment on the proposed rule. The CFPB claims that the class-waiver, often imbedded in consumer arbitration agreements, gives companies a “free pass from being held accountable by their customers[,]” comparing it to the relief a consumer can obtain as being part of a class action. At the same time, the CFPB proposed reporting …

Unconscionable Judicial Disdain For Unsophisticated Consumers And Employees' Contractual Rights? Legal And Empirical Analyses Of Courts' Mandatory Arbitration Rulings And The Systematic Erosion Of Procedural And Substantive Unconscionability Defenses Under The Federal Arbitration Act 1800-2015, Willy E. Rice

Faculty Articles

Although the Consumer Financial Protection Bureau (“CFPB”) has taken steps to educate consumers about the perils of hidden and complicated arbitration provisions in contracts, these activities are not enough. Exceedingly large populations of unsophisticated employees need assistance because they are increasingly forced to arbitrate state and federal claims. Consequently, the Court's extremely harsh “federal policies” have gradually, systematically, and significantly eroded consumers and employees' ability to defend themselves in compulsive-arbitration trials.

While arbitration may be within the reasonable expectations of consumers, a process that builds prohibitively expensive fees into the arbitration process is not. It is substantively unconscionable to require …

Courts Gone “Irrationally Biased” In Favor Of The Federal Arbitrations Act?—Enforcing Arbitration Provisions In Standardized Applications And Marginalizing Consumer-Protection, Antidiscrimination, And States’ Contract Laws: A 1925–2014 Legal And Empirical Analysis, Willy E. Rice

Faculty Articles

Spanning nearly forty years, the Supreme Court has issued multiple decisions and stated categorically that “judicial hostility to arbitration” was the sole impetus behind Congress’s decision to enact the Federal Arbitration Act of 1925. In fact, before the FAA, systemic trade-specific problems and practices generated heated disputes and widespread litigation among merchants and trade organizations. Thus, to arrest those constituents’ concerns, Congress enacted the FAA. Briefly, under the FAA section 2, arbitration is mandatory if a contractual arbitration provision is valid and a controversy “arises out of the contract.” However, common-law rules of contract formation are equally clear: Standing alone, …

The Fine Print, Ramona L. Lampley

Faculty Articles

A recent study by the Consumer Financial Protection Bureau (“CFPB”), the federal agency tasked with “empowering consumers to take control over their economic lives,” found that more than 50 percent of the market for consumer credit cards had arbitration agreements, and almost 100 percent of storefront payday lending contracts require its customers to take their disputes to binding arbitration. The same study found that most consumers do not know their credit cards have a binding arbitration agreement and that it is not a primary concern for consumers in deciding which credit cards to obtain.

However, almost all arbitration agreements in …

“Underdog” Arbitration: A Plan For Transparency, Ramona L. Lampley

Faculty Articles

The use of mandatory, pre-dispute arbitration clauses in consumer, employment, health-care, and even nursing home agreements is ever-increasing, even though the general public has distrust and a lack of understanding of the nature of arbitration. The Supreme Court in AT&T Mobility LLC v. Concepcion, and then in American Express Co. v. Italian Colors Restaurant, has signaled firmly that mandatory pre-dispute arbitration is here to stay. This is true even for individual low-value claims in which one party, say the consumer or employee, has little or no bargaining power. I call these claims “underdog claims.” There have been numerous proposals to …

Contracting Away Your Right To Sue: What You Need To Know About Arbitration, Ramona L. Lampley

Faculty Articles

Arbitration agreements that typically accompany credit card agreements and other services can work well—or work disastrously. What many consumers do not realize is that in numerous everyday interactions with banks, employers and retailers, they are waiving their right to sue in court if a dispute does arise. Given the lack of consumer familiarity with arbitration, there is an inherent fear and distrust of the system often referred to either as alternative dispute resolution or private dispute resolution. Some of that public fear and distrust is well-founded. We know that private dispute resolution poses the opportunity for businesses to potentially take …

Jewish Law Courts In America: Lessons Offered To Sharia Courts By The Beth Din Of America Precedent, Michael J. Broyde

Faculty Articles

Although the BDA is now a fifty-year-old organization, its true metamorphosis as an arbitration panel began only in 1996 when it gained autonomy from the Rabbinical Council of America. In the fifteen years since, an independent board of directors has worked with the BDA’s rabbinic leaders to craft an arbitration process that secular courts would feel comfortable upholding. While the BDA’s transformation required some level of compromise within Jewish law itself, the adaptations necessary for judicial acceptance proved to be procedural. Broadly, this meant conforming to the tenets of the Federal Arbitration Act (FAA). More specifically, the BDA’s viability came …

Not What, But When Is An Offer — Rehabilitating The Rolling Contract, Colin P. Marks

Faculty Articles

To what degree are rolling, or layered, contracts binding? A number of courts, starting with the now infamous case of ProCD, Inc. v. Zeidenberg, have held that, rather than a contract for the sale of a good, such as a computer, being completed in-store, the contract is formed when deferred terms found inside the package are reviewed by the buyer and accepted by some act -- usually use of the good (or declining to return it). This approach, which has been called the rolling contract, has been widely criticized by commentators as an abomination of contract law that ignores a …

The Irony Of At&T V. Concepcion, Colin P. Marks

Faculty Articles

Irony is defined as, “the use of words to express something other than and especially the opposite of the literal meaning.” Though many other definitions of the word exist, in light of the Supreme Court’s majority opinion in AT&T v. Concepcion, this definition comes to mind. Read broadly, the decision strikes a blow to the ability of consumers to bring suits against companies, both inside and outside of arbitration. But that was not the intent behind the federal act which the Court relied upon to justify its decision.

In 1925, when Congress passed the Federal Arbitration Act (FAA), its intended …

Is Arbitration Under Attack?: Exploring The Recent Judicial Skepticism Of The Class Arbitration Waiver And Innovative Solutions To The Unsettled Legal Landscape, Ramona L. Lampley

Faculty Articles

Courts have become increasingly likely in recent years to find class arbitration waivers in consumer product sales unenforceable due to the lack of incentives for consumers and their attorneys to recover for "low value" claims. This article explores the history of the unconscionability and vindication-of-statutory rights doctrines invoked by those courts. It then analyzes the progression of the class arbitration waiver in the consumer products industry, with emphasis on the third-generation "incentivizing" agreement. This "incentivizing" agreement, if viewed at the time of the purchase agreement, can be mutually beneficial to seller and consumer. Some consumers may wish to forego the …

Americans Abroad: International Educational Programs And Tort Liability, Vincent R. Johnson

Faculty Articles

In recent decades, the number of foreign programs operated by American colleges and universities has greatly expanded. Until recently, there were few reported cases involving claims arising from foreign educational ventures. However, the increase in international study abroad programs has been paralleled by an increase in tort claims. Additionally, because of the tendency of tort cases to be settled, the number of unreported cases, based on harm to students participating in study abroad programs, may be considerably larger than what appears in legal research databases.

Given the high cost of potential litigation, a program provider has no choice but to …

Federal Courts And The Regulation Of The Insurance Industry: An Empirical And Historical Analysis Of Courts' Ineffectual Attempts To Harmonize Federal Antitrust, Arbitration, And Insolvency Statutes With The Mccarran-Ferguson Act--1941-1993, Willy E. Rice

Faculty Articles

The movement to reform the McCarran-Ferguson Act is misplaced. The Supreme Court and the lower federal courts are inferior forums for resolving insurance-related controversies. The language of the McCarran-Ferguson Act is unclear, and this lack of clarity created division among the federal courts.

Courts are divided over the definition of “business of insurance” and this causes problems for both consumers and the insurance industry. In addition, the Act also states that the Sherman Act shall apply to any insurance-related agreement or activity involving boycott, coercion, or intimidation; yet again, courts are divided over the applicability of the Sherman Act. Also, …