Over the past several decades, a conservative-led campaign has eviscerated the ability of Americans to have their day in court. Victims of corporate malfeasance, medical malpractice, unsafe products, illegal working conditions, civil rights violations, and environmental pollution have seen their ability to hold perpetrators accountable undermined and the courtroom doors shut.

The Roberts Court has accelerated this charge, siding with the Chamber of Commerce and other pro-corporate groups in rewriting federal pleading standards to make it harder to get to trial, narrowing consumers’ and workers’ ability to band together in class actions, overturning decades of settled law to allow corporations to force consumers into mandatory arbitration, and undermining crucial federal labor, civil rights, and environmental protections. Legislative efforts backed by the same pro-corporate groups also have cut away at plaintiffs’ rights to receive full compensation for harm done to them and to hold defendants accountable. Alliance for Justice has stood with consumer, labor, environmental, and other groups in fighting back against the efforts to keep Americans from having their day in court. AFJ tracks Supreme Court and lower court decisions affecting the legal rights of everyday Americans, educates the public on efforts to narrow those rights, and works with our allies to advocate for progressive legislation and courts that will respect the access to justice that is so fundamental to American values.

Forced Arbitration

Arbitration is a process in which a private firm is hired to settle a dispute without going to court. It was designed as a voluntary alternative to litigation among corporate equals. It has been twisted today into a tool by powerful corporations to force consumers and employees to surrender their right to hold corporations accountable for wrongdoing before an impartial court.

Forced arbitration clauses routinely are inserted into the fine print of contracts that people must sign to buy a product or service or get a job. Spotify uses forced arbitration—a fact AFJ was prohibited from advertising on the service. Five of the largest banks in the country, PNC, Wells Fargo, JPMorgan Chase, Citigroup and US Bancorp, all use it. A recent petition signed by more than 100,000 consumers and activists called on them to end the practice. And many popular online services—Instagram, Snapchat, and Amazon, for example—all use it as well.

Under forced arbitration, individual consumers or employees must fight it out before a private arbitrator essentially chosen by the company that cheated or discriminated against them. Arbitrators do not need to be lawyers or follow precedent, yet their word is nearly always final and unappealable.

Facing off against a corporation in arbitration is like playing a baseball game in which the other team hires, fires – and pays – the umpires. So it’s no wonder a recent study by the Consumer Financial Protection Bureau (CFPB) found that financial corporations win 93% of the claims they bring against consumers in arbitration.

In addition, nearly all forced arbitration clauses ban class-action suits, which allow individuals to band together to bring their common claims against big corporations. Without the ability to band together, individual claims are often too small to justify the costs of litigation, allowing unscrupulous companies to do small amounts of harm to a large number of people without consequence. The CFPB’s study found that only 25 consumers file a claim in arbitration worth less than $1000 each year. On the other hand, the Bureau found that class actions over a five-year period resulted in $2 billion in awards to 160 million class members. The alternative to class actions isn’t individual arbitration. It’s no litigation at all.

As we said in our 2013 report, Arbitration Activism, the arbitration system gives corporations “a free pass to break the law.” In keeping with its ongoing deference to corporate special interests, the majority on the U.S. Supreme Court has effectively rewritten federal law, issuing decision after decision helping big business make the most of that free pass.

Lost in the Fine Print square for webYet, despite its prevalence, consumers are generally unaware that they have given up their rights in the fine print. The CFPB’s study found that less than seven percent of consumers with forced arbitration clauses in their credit card terms knew they could not sue the issuer in court.

Arbitration is spreading to employment contracts, threatening to make it nearly impossible for workers to sue over race, sex, or age discrimination. It is also appearing in contracts between small businesses and their corporate suppliers.

When it comes to how workers fare in employment disputes, one study found that “[o]utcomes in arbitration are starkly inferior to outcomes in litigation.” Even a lawyer who specializes in representing employers says “there’s no question that [arbitration] favors the company’s interest over employees.”

 

Generic Drugs

The Supreme Court also has stepped in to protect drug manufacturers.  In the case of PLIVA v. Mensing, a case AFJ profiled in Unequal Justice, the Court insulated makers of generic drugs from liability when their products do terrible harm to individuals.

Tragically, in 2013, a few months after her ninth surgery, Camille Baruch (pictured above), who is featured in this portion of the documentary, died. The cause of death is not yet known, but her mother notes that Camille’s immune system was compromised by the drugs she had to take as a result of the illnesses described in the video. Ms. Baruch was 19. The Food and Drug Administration has proposed new rules that would go a long way toward undoing the damage done by the Supreme Court majority in Pliva v. Mensing. We’ve joined several other consumer and patients’ rights groups in support of these rules.

 

Class Actions

When millions of people are cheated out of relatively small amounts per person, each can’t go through a cumbersome legal process to get her or his money back. Similarly, when thousands of people face racial or sex discrimination by a big corporation, it’s extremely difficult to fight the company one-by-one. The only hope for justice – and the only real deterrent to fraud – is a class action, which allows individuals to band together to bring their common claims against big corporations. But corporate special interests have been waging war against class actions.

The Supreme Court has imposed new restrictions on the right of employees facing discrimination to band together. In Wal-Mart v. Dukes, a case discussed in AFJ’s documentary Unequal Justice, the Supreme Court majority prevented more than a million women from banding together to pursue their case against the discriminatory pay and promotion practices of Walmart management. Next term, in Spokeo, Inc. v. Robins, the Court is poised to raise even more barriers to class actions by restricting consumers’ ability to sue companies when they violate the law.

In Congress, federal legislation passed by a Republican majority and signed by President George W. Bush forced some class actions traditionally handled by state courts into federal court, where big business thought it would get a friendlier reception. Because of the shortage of federal judges – another result of Republican obstruction – pushing these cases into federal court also promotes delay. New legislation, the Fairness in Class Action Litigation Act, would go a step further and effectively eviscerate consumer, employment, and civil rights class actions by requiring each plaintiff to have an identical harm done to them.

 

Federal Rules of Civil Procedure

The issue may be obscure but proposed changes to the “rulebook” for civil lawsuits brought in federal court would make it even harder for Americans to stand up for their rights in court. Normally, changes to the rules are made after careful deliberation by a group of federal judges who make up the Judicial Conference of the United States, but increasingly Republican lawmakers have attempted to bypass the regular rulemaking process to impose onerous procedural rules on plaintiffs.

In an egregious example, the Republican-led Congress is considering the Lawsuit Abuse Reduction Act, which could impose penalties on attorneys who bring innovative lawsuits to protect consumers, employees, and all of our civil rights. The Judicial Conference—which opposes the bill—repealed a similar rule in 1993 after finding it to be unworkable, unfair, and unnecessary.

 

Asbestos Victims

Asbestos is a carcinogen that has killed hundreds of thousands of people, in large part because the asbestos industry ignored and lied about the risks of asbestos for decades. In the 1990s, Congress passed legislation designed to ensure at least some compensation to victims even when companies reorganized under the bankruptcy code to free themselves of their asbestos liability. It established trust funds to compensate victims while those companies reorganized. But now, Republicans in Congress are proposing to tie the process up in bureaucratic knots – what’s been aptly called a “delay till they die” strategy.

 

Investor-State Dispute Settlement

A provision in recent international trade agreements, known as Investor-State Dispute Settlement (ISDS), would allow corporations to challenge countries’ environmental, health, and safety regulations that allegedly cause a loss in profits. These challenges are heard before a private tribunal of attorneys—not a judge and jury—and there is no meaningful appeal. In recent years, corporations have filed hundreds of cases over plain packaging rules for cigarettes, toxics bans, natural resource policies, health and safety measures, and denials of permits for toxic waste dumps, among other issues.

AFJ is a leader in bringing attention to ISDS, and in urging Congress and the president to keep these provisions out of trade agreements.

 

The Sunshine in Litigation Act

Lawsuits often uncover information that is vital to others in similar situations. For example, a single automobile accident may reveal a design or manufacturing defect that exists in thousands of other vehicles. The recently-revealed tragedies involving some General Motors cars, in which defects led to at least 13 deaths, are a case in point.

If this information is locked up by a secrecy order entered to settle the single case, others may be injured in accidents caused by the same defect – injuries that might have been prevented had the information become public. The Sunshine in Litigation Act would curb the ongoing abuse of secrecy orders in federal courts by requiring judges to consider public health and safety before granting a protective order or sealing court records and settlement agreements. AFJ has joined other groups concerned with health, safety, and consumer rights in supporting this bill.

 

 

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