Nov
02

“Privatization of the justice system”

By

Just yesterday I was wondering what ever happened to “frivolous lawsuits” and the runaway juries Big Bidness and Republican lawmakers used to cite as reasons to push for tort reform. It seems Republicans couldn’t deliver. Big Bidness went to Plan B: circumventing the courts entirely. The New York Times brings us up to date:

Over the last 10 years, thousands of businesses across the country — from big corporations to storefront shops — have used arbitration to create an alternate system of justice. There, rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found.

The change has been swift and virtually unnoticed, even though it has meant that tens of millions of Americans have lost a fundamental right: their day in court.

“This amounts to the whole-scale privatization of the justice system,” said Myriam Gilles, a law professor at the Benjamin N. Cardozo School of Law. “Americans are actively being deprived of their rights.”


Who needs awards caps when there are no juries and no awards? That is, at least as far as reporters can tell. Proceedings are private and secretive, the decisions “nearly impossible to appeal.” The rest of the article is a lengthy and grim dive into example upon example of arbitration, “a rigged system of expediency,” working well for the companies and not so well for victim/plaintiffs:

“Private judging is an oxymoron,” Anthony Kline, a California appeals court judge, said in an interview. “This is a business and arbitrators have an economic reason to decide in favor of the repeat players.”

They tend to favor repeat customers over plaintiffs they will never see again. Go figure.

In a related story, the Times examines how high the deck is stacked against consumers in everything from credit cards to online shopping through arbitration agreements that include bans on class action lawsuits. Supreme Court rulings in 2011 and 2013 “enshrined the use of class-action bans in contracts” and
rendered action lawsuits all but impossible:

“This is among the most profound shifts in our legal history,” William G. Young, a federal judge in Boston who was appointed by President Ronald Reagan, said in an interview. “Ominously, business has a good chance of opting out of the legal system altogether and misbehaving without reproach.”

More than a decade in the making, the move to block class actions was engineered by a Wall Street-led coalition of credit card companies and retailers, according to interviews with coalition members and court records. Strategizing from law offices on Park Avenue and in Washington, members of the group came up with a plan to insulate themselves from the costly lawsuits. Their work culminated in two Supreme Court rulings, in 2011 and 2013, that enshrined the use of class-action bans in contracts. The decisions drew little attention outside legal circles, even though they upended decades of jurisprudence put in place to protect consumers and employees.

Which is to say (as I have), the corporate beast has slipped its collar. Now you are wearing it. The beast holds the other end. One of the behind-the-scenes players in the class-action saga? John G. Roberts Jr. By the time the antitrust case of Italian Colors (a restaurant) v. American Express reached the Supreme Court, Roberts was chief justice. In ruling for American Express, Justice Antonin Scalia defended arbitration, noting, “The antitrust laws do not guarantee an affordable procedural path to the vindication of every claim.” Even if class action is the only viable method for individuals to take on a corporation. In other words, puny humans, you are SOL.

Thinking back to George W. Bush and the heyday of agitation for tort reform, it is no wonder that the phrase has all but disappeared on Capitol Hill. The justice system corporations used to complain was out of control a decade ago is working just fine now, so long as it incarcerates poor people in private, for-profit prisons (debtors’ prisons, in some cases) and large companies have found a way to bypass it and get favorable judgments behind closed doors. Trial by a jury of peers violates an essential rule of the new power dynamics: corporate persons are your betters, not your peers.

Update: Fight back at faircontracts.org [h/t RP]

(Cross-posted from Hullabaloo.)

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